8 Money Milestones
What do I do next?
This is a common and good question. You need a path to financial health and generous living. A milestone is an important marker on a journey. It is a point of celebration. So let's look at eight important milestones on your path to living generously.
Milestone 1: Start giving.
God designed giving to be our first financial priority. You might already give. Keep it up. You may need to start. Let's get going. Don't miss out on what God has in store for you and your money.
Milestone 2: Save $1,500 for a minor emergency.
You are going to get hit with unexpected expenses--a flat tire, a refrigerator that no longer cools, or a washing machine that no longer washes. Protect your generosity and avoid credit cards by having $1,500 set aside.
Milestone 3: Max out your 401(k) or 403(b) match.
If your employer offers a contribution match, take it. Do not miss out on this incredible return on your money. Max out your match, but do not go beyond it.
Milestone 4: Pay off all debt except your mortgage.
Now it's time to pay off your debts. Get rid of those high interest rate payments. Use the Snowball Method--paying off your smallest debt balances first.
Milestone 5: Save 3 to 6 months of living expenses for a job-loss emergency.
Major medical emergencies happen. Layoffs happen. Boost your emergency savings. Your number should be based on your actual living expenses and not your income.
Milestone 6: Put 15% of your gross income to retirement.
Ramp up retirement contributions. If you are approaching retirement, check out a retirement calculator or meet with an advisor to see if you need to do more than 15%.
Milestone 7: Save for college or pay off your mortgage.
Both are good options. If you have kids, I recommend the former first. If college costs are not a concern, knock out that mortgage.
Milestone 8: Live generously.
As your financial health has strengthened, so has your generosity.
Now is the time to take your generosity to a whole new level. Live more openhandedly than you ever have before. Make a difference in the lives of those around you. Make a difference for the sake of Kingdom advancement. Make an impact for all eternity.
Putting yourself in a position where you can live generously is not always easy. But these steps will help you get there. They will help you get to a place where your concern is not about which credit card payment to make, but which person or organization you can help.