Building Savings v. Eliminating Debt: Which is More Important?

After taking Dave Ramsey’s Financial Peace University course through my church, my view on money and debt was completely anew.

While money is not the greatest gift God blesses us with, it certainly is nice to have. As Christians, my husband and I treat everything we have as a gift from the Lord. Even our income. Every week we choose to honor and thank God for that by giving to his church. The Bible talks about giving God your “firsts” and not saving Him for last. About 6 months ago we really became committed to that, not skimping like we would sometimes when things were tight.

Since then, he has blessed us financially in ways we couldn’t imagine. He did this in two big ways. The first, we owed $800 on a rental house for carpet fees. That was $800 we definitely didn’t have in our budget. After a few conversations, I decided to see if our rental insurance would help cover it (I wouldn’t have even thought about this had it not been for a friend suggesting it). They ended up paying the whole thing!

The other blessing was in the way of a tradition with his work, when someone promotes they throw a party for the unit, spending the difference in paycheck (Thanks, Marine Corps!). That was going to cost us about $650, again, $650 we would have had to take from savings (Yes, he got the raise, but we had just moved and gone to visit family, the money just wasn’t there). After some prayer (thanks friends!), we ended up only having to pay $130!

Now, as we know from my last post, the Bible tells us that in regards to debt, we are slave to the lender. They literally have our hands tied behind our backs. The money we owe them is not our money at all, it’s theirs. And the Bible also tells us not to store up treasures here on earth. Some may interpret that as a free pass to spend the money we get. I do not believe those passages are referring to savings at all, but instead they’re about not putting your faith and trust into things you cannot take to Heaven.

In Proverbs 21:20, we see that the wise keep oil, while the foolish spend it all. In Biblical times, fine oils were a way of receiving payment or bartering for things your family needed. Oils were highly desired by others. It was a way of working and providing for one’s family.

Scripture on Savings: Proverbs 6:6-8, Proverbs 21:5

So if having debt is bad and our goal should be to get out of it as quickly as possible, how do we do that, while also making and maintaining a savings?

What FPU Taught Us vs. What We Actually Do

While I do believe that God gives us only what we need, no more and no less, there is something about not having a savings that’s unnerving. We do not follow the FPU protocol completely, and here’s why: You are supposed to eliminate debt before you start building your “living expense” savings.

I am not suggesting that you do the same. Dave Ramsey’s system has worked for millions of people and his suggestions should be taken seriously and prayed over by each individual and/or family.

My husband is in the military, so for the next year and a half we have a guaranteed income (which doesn’t seem to be as “guaranteed” anymore). That alone is something God has blessed us with. Most civilian workers do not have that luxury; trust me, we know how blessed we are. Even so, the idea of strictly focusing on debt and not giving any attention to savings (for possibly 3 years) just didn’t sit right with my husband or I. We do not save out of fear, we do so to plan ahead.

We have a Living Expense Savings account, and while DR (Dave Ramsey) recommends building that up to 3-6 months of your family’s living expenses, ours is much lower currently. We are comfortable with where we are at on that, but when money allows, we are adding to it.

Step 1: Build Your Emergency Fund

To ease your nerves a bit, let me share with you his recommended first step: Build a $1,000 Emergency Fund. Here’s the idea, emergencies happen to everyone. Cars break down. Water heaters quit working. Kids break their arms. Roofs leak. It happens, that’s part of life. Most of the financial emergencies we encounter cost less than $1000 though.

A flat screen TV that quits working (or one that goes on sale) is not an emergency. Christmas is not an emergency (it never surprises us, it happens on December 25 every year!). A cruise to Alaska is not an emergency. Plane tickets are not an emergency (unfortunately for us).

It may be wise, if you’re married, to discuss beforehand was constitutes as an “emergency” in your house. If your dog needs emergency surgery and it costs $800, can you take from the Emerg. Fund? If your brother is in need of some help, can you give to him? There will be things that come up that may not be so easy to decide on, having a plan is important. Obviously, we cannot play out every scenario, but if you can discuss finances with your spouse, you can talk about anything! At least, that’s what we’ve found in our home.

So, before we tackle debt head-on, open a new savings account, one that you can get into at any time if needed, call it your Emergency Fund (not your Emergency Fun!), and as quickly as you can, get $1,000 in there. You may already have it, that’s great. Or it could take you 6 months to get there, just get there.

Once that has been accomplished, refer to my post on Snowballing Debt, and start your journey toward financial freedom! We are not there yet, but we so look forward to the day in which our shackles are removed. The day that we no longer feel the burden of debt. We look forward to a time when all of the money coming in we decide its place. We are mostly looking forward to the day in which we can travel and revel in God’s beautiful creation because of our decision to get out of debt early.

Think this sounds great, but wondering when you’re supposed to live a little, have some fun? Stay tuned for my next post, “Attacking Debt Now: But when do I get to “Live a Little”?”

Are you on the road to being debt-free? What are some of the struggles you’ve faced in doing so?

3 responses to “Building Savings v. Eliminating Debt: Which is More Important?

  1. Really loving these posts! We committed in the winter to get rid of our debt and it's really made things tight, esp. recently. It's comforting that others are doing the same and hearing what worked for you!


  2. Thanks, Andy. I have wanted to share these for awhile, but it's a pretty personal matter. Thanks for sharing your encouragement here!

    Did you guys take a class or read any books? Wondering what general approach you're taking.

    Things are going well for us, as far as debt goes, but recently we too (after moving) had to scale back on our payments. I just got a temp. job at our church though. đŸ™‚


  3. We haven't taken any classes or read any books, though we are thinking about taking the Dave Ramsey class at a local church. Our approach appears to be much like your own. Though my husbands job is always somewhat unstable so we keep a good amount in savings in the event we may need it for living.

    Congrats on your new job! Hope you are liking it!


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