The decline in the value of our home, together with the ridiculous rise in the price of a gallon of gas, is stretching our family’s budget past the breaking point. How can we bend without breaking?

Unfortunately, many Americans were following bad financial habits even before the latest economic squeeze. It was common to see folks using credit-card debt and equity in their family home to finance day-to-day living. As a result, a lot of people are now financially “upside down” — they owe more on their homes than the homes are worth.

It’s time to bring your financial life back into balance and follow time-honored and commonsense principles that will keep you on solid financial footing.

Good financial management is a function of a few basics: setting Godly priorities, having a generous spirit, avoiding unproductive debt and saving appropriately for the future. Let’s focus on savings today.

According to the Federal Reserve Bank of St. Louis, the current generation of Americans is saving less than any generation since the late 1950s, when the bank began tracking personal savings rates. That’s not a healthy sign. Scripture reminds us: “Precious treasure remains in a wise man’s dwelling, but a foolish man devours it” (Proverbs 21:20).

What are the keys to saving for the future? It starts with understanding the resources available to you and creating a spending plan that builds savings into it. In essence, your savings becomes just another “planned expense.”

If you have unproductive credit-card debt, I recommend your savings plan start with a $2,000 initial emergency fund. Then, before saving further, you should move forward with an accelerated debt-repayment strategy.

Once you’ve eliminated your unproductive debt, continue to build your emergency and rainy-day fund. You should end up with between three and six months of living expenses saved in an account you have ready access to — an interest-bearing money market account works well.

Once you’ve set aside your rainy-day fund, it’s time to save for future needs — which typically include retirement, and at least a portion of your children’s anticipated college expenses. You can use the free calculators available at to develop your customized plan.

Once you understand how much you need to save, you can put your plan on auto-pilot. Here I’m a big fan of the direct-deposit feature that most employers offer. If your employer provides a healthy offering of investment selections through its 401K plan, participate to the level your retirement calculations show you need.

But don’t stop there with your direct deposit. Have funds deposited directly into longer term savings and investment accounts for college education, replacement of a car, and even improvements to your home.

Of course, making the savings plan stick means that the rest of your spending has to be kept in check. By developing a plan and putting it on auto-pilot, you’ll go a long way toward fulfilling your financial responsibilities. God love you.

Phil Lenahan is president

of Veritas Financial

Ministries, online at