Building a Reserve

May 24th, 2007  |  Published in Finances, Mormonism

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After you’ve built a budget and a plan for sticking to it, you’re ready to build up a reserve of money to be used as an emergency fund. It’s alright to start out small, but be sure to add back what you take out, and only use it in emergencies (such as a medical need, temporary unemployment, etc.). This principle echoes overall preparedness, and is an important part of a financial plan. Without an emergency fund, it can be very hard to get out of debt when we’re trying to pay off all the money we owe instead of saving a bit. Start out small, such as one or two thousand dollars, and build it up to about three months expenses that you can keep in savings accounts where you can have quick access to the money should a need arise.

Speaking about building a reserve, President Gordon B. Hinckley said:

“Set your houses in order. If you have paid your debts, if you have a reserve, even though it be small, then should storms howl about your head, you will have shelter for your wives and children and peace in your hearts” (”To the Boys and to the Men,” Ensign, Nov. 1998, 54).

Building a Reserve is the fourth step in the Family Finances series on Above Yourself.

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