My friend Lonnie worked in the corporate world for twenty seven years, and then left it behind. Now, he’s living the dream… as a youth pastor! Lonnie is also a financial planner and advisor. I recently sat down with Lonnie over Thai food to talk about seminary students and finances. I’ll be sharing portions of that interview over the next several weeks. If you have a question for Lonnie you’d like to see answered here, simply email me at mark -at- seminarysurvivalguide (dot) com.

Mark: Seminary students are usually pretty poor. Is it important that they save money?

Lonnie: Yes. Students should tithe and save right from the beginning. Those should be your first two budget items. I understand that they don’t have much money and it seems harder, but actually it’s often harder for people to do so when they start getting more money. These students should establish good habits early.

The general guideline is to save 10-15 percent of your income. The reason this is so important when you’re starting out is that everyone needs an emergency fund. Things will happen that require money. Someone will die and you’ll have to take an unexpected trip. You’ll get in a car accident and need money for repairs. Anything could happen.

If you don’t have an emergency fund, then you’ll turn to credit cards as your only other source of cash, and have to pay 21% interest. All you wind up doing is digging yourself into a hole.

So yes, seminary students should save money. Even if you start small, you should put some money away every time you get paid.

I recommend you put it in a savings vehicle that is liquid and accessible, but not that accessible. You should get a savings account that will draw some interest, not a cheap bank half-percent interest passbook account. Put it somewhere your money will actually grow. Remember that the parable of the talents was about money. There is an expectation that our money should
grow and not just sit.

Don’t put your emergency fund in a CD, because even though the rates can be good, you can’t get your money on demand without paying a penalty. I like ING’s Orange Savings Account a lot. It links to your checking account and pays 4%+ interest, which is pretty good. (ING has an electronic checking account that earns high interest, too.)

Tomorrow: How to get a high interest savings or checking account with ING, along with some free money.

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