Looking ahead to the future is an important, but often scary, thing to do, especially when it comes to your finances. The best way to prepare for the future and give yourself financial margin is to establish a healthy savings account. Not only will it help to ensure that you have cash to cover expenses, but it will help you stay out of debt, reach your goals, and live without stress.

According to Bankrate, about 20% of Americans do not even have a savings account, and out of the ones that do, about a fourth of them are saving less than 5% of their income. Almost the same number save nothing at all! 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 budget, see what margin you need to stay within to cover your primary expenses, and then allocate an amount each month to put back into your savings. Cut out the unnecessary things that are preventing you from saving, and form a lifestyle that can equip you with more ways to save. It is also important to make a distinction between money that you want to save and money that you want to invest. Your savings should be liquid, 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 9-12 months’ of living expenses. If you want to buy a new car, go on vacation, or put the kids in braces, 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 water heater 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. It is important to save $1,000 and to keep that money on hand in an Emergency Savings 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.

After these savings goals have been met, you should save for major purchases and begin using those funds to invest. Most people I talk to have a problem because they start investing money BEFORE they have adequate savings. This means when an emergency arises, there is normally a penalty to take money out of your retirement plans.

Think of the horse and cart analogy. The horse comes first. It should be a regular savings habit sufficient to meet these two goals. The cart is the long-term investments that come later. The percentage is up to you so long as you are able to hit these minimum savings targets in a reasonable amount of time. Once you have hit those targets, you can begin to work towards saving the recommended amount of 15% of your total income.

Working on your savings account now rather than later can help bring you closer to your financial goals and even assist with calming financial stress in the future. Take ahold 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.