Thursday, January 15, 2015
Annual Budget - Savings
Proverbs 21:20 says: "The wise man saves for the future, but the foolish man spends whatever he gets."
So, we try to save a bit of money each year. Traditionally, we've been saving between 10-15% of our total income each year toward things like:
1) Retirement or, as I prefer to put it, the day when I no longer collect a paycheque or work for money.
2) Education for our children. We won't be giving our children a 'free ride' but we have felt it prudent to ensure we give ourselves some options financially when our children attand post secondary school.
3) Medium Term expenses like vehicle purchases and home renovations.
This past year, we spent a good chunk of change on home improvements so we saved a little less but that's fine as over the long term we'll enjoy what we done to improve our living space and it isn't like we are falling behind or cashing in investments to pay for things.
The main strategy with our savings has largely been to maximize the amount we receive in matching amounts from my employer. They have 2 programs to invest in at work that match my contributions with dollars from the company (50% match on both programs right now) and I fully take advantage of both of those. In addition to that we set aside a bit of money each year to deposit into a Registered Education Savings Plan which offers a 20% matching grant from the federal government.
All told, I have invested, out of my pocket, about 10% of my income and government grants and matching contributions have added up to another 4% this past year. This seems like an excellent use of our resources. Havings some money saved will give us options in the future and the resources to pursue different kinds of opportunities.
Certainly, we do not want to be found hoarding our wealth like the rich man of Luke 12 nor do we want to squander it and become dependent on others for our day to day needs. This is a fine balance and generous and cheerful giving is an important aspect of saving for the future.
Here is another thoughtful treatment of the topic of savings: http://moneyhelpforchristians.com/is-it-biblical-to-save-for-retirement-part-i/