In the second episode of this ‘Good with Money’ season, Simon and Bex talk about the advantages of including ‘Saving’ as a core element of the way that we manage and use our personal finances.
Some key points of interest covered in this episode include the following:
- Simon introduces this episode by explaining that saving allows us to control our money by moving it through time so that it is available when we need it. [01:44] He goes on to explain that saving is a means of putting money aside while the aim of investing is to generate a financial return from money that has been placed into some kind of venture with that purpose in mind. [02:37]
- In response to a question from Bex, Simon comments that, generally, saving should be our second priority (after giving) when organising and deploying our money. [03:55]
- When it comes to deciding on a desirable size for an emergency fund being created by saving, Simon suggests that the key consideration is to go for a proportionate amount or ratio that suits our particular circumstances. [06:03]
- When asked to pinpoint a key benefit of saving, Simon talks about the resilience that it gives to our financial journey, for example by cushioning the shock of a sudden spike in expenditure that happens annually for most people at Christmas and which otherwise could push us into debt. [08:13]
- However, a saving strategy can only protect us against known future expenses [12:09] if we are able and willing to use our emergency fund when the need arises. [13:59]
- Being flexible in how we respond to financial pressure points or competing demands on our resources can be assisted significantly by maintaining a God-focused perspective of, ‘It’s His money; what would He have me do with it? [15:24]
- Simon remarks that the need to save is likely to be less of a priority for those who are approaching retirement or who are already retired. [17:57]
- When wrapping up the episode, Simon comments that the next stage after saving is to consider investing. He also addresses the issue of whether or not we should attempt to save if we are in debt. Regarding that latter point, he mentions that a number of previous episodes of the podcast have focused on the issue of debt; for example, , Season 8 Episode 6 looks at ten top tips for dealing with debt. [19:46]
- Simon’s final, final, final observation is that John Wesley, in his ‘Use of Money’ sermon, encourages his congregation to earn, give and save as much as they can – notably, omitting any mention of ‘spending’ as a significant priority. [22:30]
- Next week’s episode will focus on the topic of ‘Investing’. [23:23]
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