emergency savings – Crown Financial Ministries New Zealand

Maintaining your savings accounts

Peter Crawford — Tue, 19 Aug 2025 03:57:57 +0000

Maintaining your savings accounts

Looking ahead to the future is an important, especially when it comes to your finances. The best way to prepare for the future and give yourself financial margin is to establish healthy savings accounts.

That helps ensure you have cash to cover expenses, stay out of debt, reach your goals, and live without stress. Saving doesn’t come naturally to everyone, but that doesn’t mean you can’t do it.

Take a look at your finances

Sit down and take some time to uncover what your exact financial situation is. Look at your monthly income and spending and what margin you need to stay within to cover your primary spending. You can then allocate an amount each month to put into your savings. Cut out the unnecessary things that are preventing you from saving. You need to form a lifestyle that equips you with more ways to save.

It is important to make a distinction between money that you want to save for short-term needs and money that you want to invest for the longer-term. Your short-term savings should be accessible at any time in case of an emergency.

Make a plan

The saying “he who fails to plan is planning to fail” rings true for your finances! Make short- and long-term savings goals and come up with a plan (starting with a budget) on how you’re going to reach them.

Distinguish between emergency savings and big purchase savings. Maintain at least $1,000 in an emergency fund at all times as you work your way up to saving 9-12 months’ of living expenses. If you want to buy a car, go on holiday, or pay for major dental work for one of your children, save for those specific goals. Assign a dollar amount and a time frame to your goal and get to work!

Expect the unexpected

While becoming future-oriented is very important when saving, our plans rarely go exactly how we imagined. Proverbs 16:9 tells us that, The heart of man plans his way, but the Lord establishes his steps. Whether it’s God’s plan or the broken hot water cylinder that surprises us, be ready to be flexible. If things do not go exactly how you had imagined when it comes to your finances (or any other aspect of your life), just remember that His divine plan is a part of your journey.

Create savings goals

Having goals for your savings can help you to be more intentional with your money and help you to see a present purpose in it rather than only seeing its future potential.

How to get started

It is important to save $1,000 and to keep that money on hand in an Emergency Savings Account. This is an account that you do not spend unless absolutely necessary. Once this is achieved, try to keep saving until you have 3 to 6 months of your living expenses in this account. The Money Map can help walk you through each of these savings goals, as well as other financial goals.

Working on your savings account now will bring you closer to your financial goals and reduces financial stress in the future. Take a hold of your savings and maintain a consistent plan that works for you. Though it might seem difficult at first, taking this initiative will help you navigate through your finances and better equip you for whatever the future may hold.

Looking after your savings accounts

These are some ideas people use for maintaining their savings accounts:

Many people find it easier to set up automatic payments to transfer money from their spending account as soon as their pay comes in. That removes the temptation to spend it.
Some people choose to have a savings account in another bank. If they have to go to the bank to withdraw money it makes it harder to withdraw funds when they are tempted to spend it. Some choose to have no card or online banking access to their savings account.
If you have unexpected money come in, or your spending is below what you budgeted, transfer some of your surplus into your savings accounts.
Some people use the annual donations tax credit as a tool for saving. It is easy to estimate how big your refund will be each year.

A point to remember

Saving some of your money doesn’t mean you don’t get to spend it. If you manage your savings well you will avoid short-term debt for unexpected expenses. Over the longer-term you will have more money to spend on the things that are important to you, or you can be more generous to others. If you don’t have savings, you will struggle to avoid going into debt when unexpected bills occur. In addition to the financial benefits of savings, life is also less stressful when the unexpected happens and you have savings that you can draw on.

Setting up an emergency savings account

Peter Crawford — Sat, 26 Jul 2025 05:40:55 +0000

An emergency savings account is a primary element of a financial plan. Having money set aside and always available for the unexpected expenses eliminates a lot of financial stress and the need to rely on credit cards or other forms of short-term debt.

How Much Do You Need?

An emergency savings account is a source of money to draw on during unexpected circumstances. It is basically an insurance fund for sudden setbacks. This might include a job loss, having to stop work due to major health issues, major car or home repairs, a natural disaster, an unforeseen tax bill, a death in the family, or emergency travel expenses.

The alternative of income replacement insurance is expensive, and you are not always guaranteed a payout. If you don’t make any claims on your insurance, you don’t receive any money back, but if you consistently save for emergencies, you will eventually have more than you need and be earning money on your savings.

Most experts recommend saving three to six months of your current living expenses, but these are some scenarios where you might want to save more:

Those with children who are still dependent on you.
If you have a mortgage.
If layoffs are common in your industry
If you are retired and don’t have other sources of income.
If you are self-employed or your income is unstable.
Single parents without a second source of income.

If you spend less than you earn, have no dependents, and no debt you can keep fewer months of living expenses in emergency savings.

A portion of the emergency savings should be easily accessible, in accounts that won’t be penalized for withdrawals.

You need to be able to cover rent or mortgage, utilities, insurance (car, home, life), routine maintenance (car and home), groceries, child-care, and other debt payments. Find the total monthly cost of these items and multiply that by three to calculate a three-month saving goal; multiply by six to determine what is needed to cover six months. This total is for basic survival—discretionary items are not included (the things that are nice, but you can survive without them). This is money needed to survive if the unexpected hits.

How to Start

Open an account that you absolutely will not touch unless a true emergency arises. Aim to save $1,000 as quickly as possible. Set up automatic payments so you will not spend the money. Deposit gifts, pay raises, bonuses, or tax refunds when possible. Go through your bank and credit card statements to see where you can cut expenses and divert that money toward an emergency savings account until you establish a three-to-six-month cushion. When you need to withdraw money, aim to replenish it.

Lessons from Ants

Go to the ant, O sluggard; consider her ways, and be wise. Without having any chief, officer, or ruler, she prepares her bread in summer and gathers her food in harvest. Proverbs 6:6–8

Not only are ants extremely busy creatures, but they are also known for their ability to store food that is ultimately shared with others in their colony. Most of us have seen an ant carrying off a large breadcrumb under the picnic table. They are not feasting on the bread; they are harvesting it for use in the future. This is the wisdom that God wants us to learn from.

What about debt repayment?

If you have debt, repaying that debt as fast as you can is a priority. You will be in a much stronger financial position once you are debt free. Make a commitment to take on no new debt.

If you don’t have much room in your spending plan for savings, saving $5 or $10 a week is still a good starting point for your emergency savings account.

Set a goal; then challenge yourself with spending fasts, like a no-eating-out month, a no-entertainment-expense month, etc. Find friends to do this with you; some competition may help you build your savings account faster!

How many savings accounts do you need?

Once you hit your goal for your emergency savings account, consider opening another bank account for future needs. This might include replacing a vehicle, necessary maintenance on your home, investing in more insulation for your home, installing solar panels, buying a home, holidays, and more.

Summary

At least three savings accounts plus your KiwiSaver are useful:

Short-term expenses that don’t occur every month. That includes annual holidays, dentist and vehicle servicing
Long-term savings for buying a house, home improvements, car replacement and major holidays
Emergency savings for unexpected events

The article next month addresses how to maintain these savings accounts.