In teaching the Marriage and Family Relations Class I taught this lesson on finances. This is a part of life that all of us could use some pointers on so I decided to post this. Sorry, it's lengthy but so many good points! Hope you get something from it:
What is one of the top causes of marital discord? FINANCES
What is one of the top causes of marital discord? FINANCES
Many couples argue over bills, debt, spending, financial issues. How you decide to handle them determines how finances will affect your relations—negative or positive?
Finances: our emotions are very much involved in our finances, and because of that, it makes it all the harder to take care of them without being emotionally involved. I don’t know if it’s possible to separate the two but we do have to learn to control both as we deal with our finances.
This lesson (article) talks about WHY it’s important that both husband and wife be involved in money making decisions—how it will bring peace, harmony, and unity into your marriage. We will talk about how money has to be controlled or we will find ourselves in BONDAGE to our money habits.
When we were first married, this is how we kept track of our money: little black book—ledger from when we were first married.
Then we used Quicken—Loved it!! We knew exactly where everything went unless we used cash which didn’t and still doesn't happen very often.
Now we use Mint (mint.com) for the last 18 months. We are able to keep good sight of our money—where it goes & where it needs to go. As soon as we make a purchase with our credit card or debit card it shows up on mint. If we write a check or make a deposit, it shows up as well. It keeps track of our mortgage and our money market, etc. EVERYTHING that we allow it to.
It is VITAL that you know where your money is going—it is vital that you both are involved in the money spending decisions:
N. Eldon Tanner wrote an article which is in our participant’s manual.
“But before ye seek for riches, seek ye for the kingdom of God.
“And after ye have obtained a hope in Christ ye shall obtain riches, if ye seek them; and ye will seek them for the intent to do good—to clothe the naked, and to feed the hungry, and to liberate the captive, and administer relief to the sick and the afflicted” (Jacob 2:18–19; italics added).
The foundation and perspective then are these: We must first seek the kingdom, work and plan and spend wisely, plan for the future, and use what wealth we are blessed with to help build up that kingdom. When guided by this eternal perspective and by building on this firm foundation, we can pursue with confidence our daily tasks and our life’s work, which must be carefully planned and diligently pursued.
I think it’s important to remember our finances are a part of life—we have to have money to survive. But I think these are wise words to remember throughout your life.
In participant’s manual on pages 28-31— the 5 principles for taking care of finances.
1. Pay an honest tithing.
2. Live on less than you earn.
3. Learn to distinguish between needs and wants.
4. Develop and live within a budget.
5. Be honest in all your financial affairs.
From the Participant's Manual: “The payment of tithing is a commandment, a commandment with a promise. If we obey this commandment, we are promised that we will “prosper in the land.” This prosperity consists of more than material goods—it may include enjoying good health and vigor of mind. It includes family solidarity and spiritual increase. I hope those of you not presently paying your full tithe will seek the faith and strength to do so. As you discharge this obligation to your Maker, you will find great, great happiness, the like of which is known only by those who are faithful to this commandment.”
There are blessings of paying tithing:
My parents are in their 80’s & have been faithful tithe payers ever since they joined the church. They have never been wealthy… but they have been blessed with everything they have needed. They have never wanted for necessities. They’ve had good health, and family solidarity and spiritual increase.
3 Nephi 24: 10 Bring ye all the tithes into the storehouse, that there may be meat in my house; and prove me now herewith, saith the Lord of Hosts, if I will not open you the windows of heaven, and pour you out a blessing that there shall not be room enough to receive it.
I get emails every day from different stores and businesses and everyday they want me to look at the bargains and the good deals of the day. After thanksgiving every year we have “black Friday”. Everyone wants to go out and get the best deals that are out there. You can’t get a better deal than when you pay your tithing. “It’s a great deal!” The Lord will bless you with so much that there won’t be room enough to receive it.
2. Live on less than you earn
From the manual: I have discovered that there is no way that you can ever earn more than you can spend. I am convinced that it is not the amount of money an individual earns that brings peace of mind as much as it is having control of his money. Money can be an obedient servant but a harsh taskmaster. Those who structure their standard of living to allow a little surplus, control their circumstances. Those who spend a little more than they earn are controlled by their circumstances. They are in bondage. President Heber J. Grant once said: “If there is any one thing that will bring peace and contentment into the human heart, and into the family, it is to live within our means. And if there is any one thing that is grinding and discouraging and disheartening, it is to have debts and obligations that one cannot meet” (Gospel Standards, comp. G. Homer Durham [1941], 111).
The key to spending less than we earn is simple—it is called discipline. Whether early in life or late, we must all eventually learn to discipline ourselves, our appetites, and our economic desires. How blessed is he who learns to spend less than he earns and puts something away for a rainy day.
You spend what you make-the more you make the more you spend—good practice to learn to save when you don’t have a lot to spend so that you will learn early to spend less then what you earn—learn that principle early—learn to be disciplined early—ALWAYS PUT SOME AWAY INTO SAVINGS! Even if it’s just a very small amount.
How much should you save? An article I read : The percentage of income that’s appropriate for you will depend on your income, age, the amount of money you’ve already saved, your employment prospects and, most important, how much you’re willing to forego immediate gratification for current and future financial security.
How much should you save? An article I read : The percentage of income that’s appropriate for you will depend on your income, age, the amount of money you’ve already saved, your employment prospects and, most important, how much you’re willing to forego immediate gratification for current and future financial security.
May be hard to see how much you will need for the future—but life gets more expensive the older you get—a home, children, their educations, missions-both for your children and for you, retirement,etc.
What are we saving for? WHAT’S THE PURPOSE?: a rainy day (car or home repairs, illness, injury, unemployment)—children’s future education—retirement—large purchases---It teaches discipline.
My oldest daughters’ husband graduated from dental school almost a year ago. Right now, they are living from paycheck to paycheck. A couple of weeks ago, their dryer broke down. They don’t have any money in reserve and so they are drying their clothes using the old fashioned way—the air. Their washing machine sounds like its going to fall apart any day! My point not to show a bad example, but to show that there are things that break down, tires that wear out, accidents that happen that will need extra expenses.
Allie Schulte of the Church Welfare Services: If Church members strive to discipline themselves, they will be prepared for financial trials. Once they have established a financial reserve, they can continue saving for future needs like missions, education, retirement, and other necessities.
You need a cushion for emergencies, and then you need to save for the future.
You have to have DISCIPLINE—know how much you make—know how much you spend—spend less than what you earn.
Suze Orme—financial adviser guru—TAKE EQUAL PLEASURE IN SAVING AS YOU DO IN SPENDING. STOP VALUING YOURSELF BASED ON WHAT YOU OWN, WHAT YOU POSSESS, LOOK AT YOUR VALUE ON WHAT YOU CAN SAVE!
Read Pres. Hinkley WARNS uS TO STAY OuT Of DEBT!
“The time has come to get our houses in order.
“So many of our people are living on the very edge of their incomes. In fact, some are living on borrowings. …
“I am troubled by the huge consumer installment debt which hangs over the people of the nation, including our own people. …
“I urge you … to look to the condition of your finances. I urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can, and free yourselves from bondage” (in Conference Report, Oct. 1998; 70, 72; or Ensign, Nov. 1998, 53–54).
My oldest daughter took a finance course from DaveRamsey. He says you never buy anything without cash—have the money set aside, except for a house. The church says you can use credit for a home, a car, and an education. This is a debt that will pay for itself. You have to get the education and most education is expensive—especially if you go to graduate school. You still have to be careful and it's better to be conservative rather than being liberal with that debt.
Be careful about buying on credit.
CREDIT CARDS—this is how we use them: we use it like a debit card or a check. We pay the full amount owed each month!! Every time we use our card our transaction shows up in Mint—DO NOT PAY INTEREST ON CREDIT CARDS!!! We do not pay an annual fee for our credit cards! We use cards that give us a percentage back on our purchases. Using a credit card wisely helps with your credit rating.
How can you stay out of debt?
Plann—look ahead—discipline
3. Learn to distinguish between Needs and Wants.
From the manual: Consumer appetites are man-made. Our competitive free enterprise system produces unlimited goods and services to stimulate our desire to want more convenience and luxuries. I do not criticize the system or the availability of these goods or services. I am only concerned about our people using sound judgment in their purchases. We must learn that sacrifice is a vital part of our eternal discipline.
In this and many other countries, many parents and children born since World War II have known only prosperous conditions. Many have been conditioned to instant gratification. There have been ample job opportunities for all who are capable of working. Yesterday’s luxuries for most are considered today’s necessities.
This is typified by young couples who expect to furnish their homes and provide themselves with luxuries as they begin their marriages, which their parents have managed to acquire only after many years of struggle and sacrifice. By wanting too much too soon, young couples may succumb to easy credit plans, thereby plunging themselves into debt. This would keep them from having the financial means necessary to do as the Church suggests in the matter of food storage and other security programs. WHY IS IT ESSENTIAL TO DETERMINE BETWEEN WANTS AND NEEDS?When we can determine between our wants and our needs we will help ourselves get rid of stress—it will give you piece of mind—it keeps us out of debt.
Henrik Ibsen: “Money may be the husk of many things, but not the kernel. It brings you food, but not appetite; medicine, but not health; acquaintances, but not friends; servants, but not faithfulness; days of joy, but not peace or happiness” (in The Forbes Scrapbook of Thoughts on the Business of Life [1968], 88).
Some people spend money to make them feel good about themselves. They think the more things they have the more valuable they are!!! If you are buying things to cover up an emotional lack, you will only find that your emotional need will still be unmet!!!
It’s also very easy to look around and see what your friends or family members are buying and think..I want that! I want to go there! I want a house like that. WE bought our home 28 years ago—everyone in the neighborhood was the same age with similar incomes. 5-10 years after that there were many families that were making lots of money and there seemed to be a boom of people selling their houses and building big and expensive homes on the side of the mountain. I remember feeling very left out and envious and desiring to be able to do the same. I really thought we needed to sell and buy a bigger house. It wasn’t a need as much as wanting what every body else had. And now I live in the same house but we've been able to add on and remodel and it's everything and more than I have ever dreamed of having. I love my house and I love where I live.
We live in a world of PLENTY!! There is just about anything you can imagine available for us. It’s easy to get caught up in the I WANT syndrome.
When you go to make a purchase, ask, is this something we can afford? is it something we need? is it something we want? Can it wait for another time?
SUGGEST: Make a list of your most recent purchases—look at where your money is going and then sit down as a couple and figure out what things are needs and what things are wants. PAY FOR THE NEEDS FIRST! You don’t have to buy the most expensive brand or product. Be wise with the product you buy.
Each of us must decide what is sufficient for our needs and not allow our desires to be governed by what is advertised or available. We must personally decide what is enough car, house, or income rather than asking a bank officer how big a loan can we qualify for.
Figure out a way to Go out and splurge once in awhile. You still have to have fun but remember money doesn’t buy happiness. DON’T FORGET TO HAVE FUN! YOU CAN BE POOR AND HAVE FUN!
4: Make a budget
WHEN YOU’VE DETERMINED NEEDS & WANTS then you need to make a budget. A budget outlines what your income is and what expenses you have to make.
From the Manual: A friend of mine has a daughter who went overseas with a BYU study-abroad program for a semester. She was constantly writing home for more money. His concern was such that he called her long-distance and questioned her about the need for the additional funds. At one point in the conversation the daughter explained, “But Dad, I can tell you where every penny you have sent me has been spent.”
WHEN YOU’VE DETERMINED NEEDS & WANTS then you need to make a budget. A budget outlines what your income is and what expenses you have to make.
From the Manual: A friend of mine has a daughter who went overseas with a BYU study-abroad program for a semester. She was constantly writing home for more money. His concern was such that he called her long-distance and questioned her about the need for the additional funds. At one point in the conversation the daughter explained, “But Dad, I can tell you where every penny you have sent me has been spent.”
He replied, “You don’t seem to get the point. I’m interested in a budget—a plan for spending—not in a diary of where the money has gone.”
A Budget isn’t just knowing where your money goes—it’s deciding where your money goes and then making sure that it goes there.
1. Start with knowing how much income you have.
Once you get married you share one checking account—it’s not my money and your money—it’s our money!!! It's not my pay check and your pay check but OUR paycheck.
2. Figure out the expenses you have—
tithing, rent, utilities, gasoline, food, phones, etc.
tithing, rent, utilities, gasoline, food, phones, etc.
If you don’t have enough income to pay your expenses—what do you do?
You have to cut something out—
What are things you could cut out? internet, cable TV, phone services, gas, eating out, movies
You may need to make a sample budget first and try it out for a month or two and see how it works. It may take a couple of paychecks before you figure out exactly how your budget is going to look.
From the manual: It has been my observation in interviewing many people through the years that far too many people do not have a workable budget and have not disciplined themselves to abide by its provisions. Many people think a budget robs them of their freedom. On the contrary, successful people have learned that a budget makes real economic freedom possible.
I truly believe we are where we are today because we have disciplined ourselves and set a budget early in our marriage and have lived on a budget ever since. Many of you have been to our house…I know it’s not the biggest best prettiest etc home around. BUT it is far better than I ever dreamed of having. I love my home!!! We started with a small 1400 sq. foot home with 3 bedrooms and 1 ½ baths. It now has over 3000 sq. feet 4 bedrooms (could have 5) 3 ½ baths and more room than we really need. ALL because we lived within our means, we budgeted, we payed a full tithing,
Sample Budget:
Income $XXXX
Expenses:
Tithing
Other Church donations (FO)
Savings
Rent/Mortgage
Food
Utilities
Phones
Phones
Car Payment
Gas
Insurance
Medical
Clothing
Other Household
Other Personal
Date Night
NEVER MAKE A LARGE PURCHASE WITHOUT CONSULTING YOUR SPOUSE!
5. Be Honest in all your financial affairs
To me nothing is more upsetting to hear of good LDS people who are not honest in their finances.
Pres. Tanner said; The ideal of integrity will never go out of style. It applies to all we do. As leaders and members of the Church, we should be the epitome of integrity.
6. Teach your children
This is my addition to the 5 principles of finances.
Give your children opportunities to have their own money. Teach them to use it wisely. Give them opportunities to pay their tithing, budget and save and to have some expenses.
Teach them by example—sometimes we want to buy our children whatever they want. We think we are showing our love for them by doing so. From an Ensign article, we read:
Because part of the Lord’s plan was to arrange for opposition in all things, thereby providing us with the opportunity to become strong through our struggles, we must keep in mind the benefits of allowing our children to grapple with challenges. How much to provide and how much to withhold are decisions best made prayerfully…
Sometimes parents may need to openly explain to a child that one of the tasks of parenting is to help them become self-reliant—then provide them a way to work and save money. Explain to them that part of your responsibility as a parent is not only to teach them the principles of the gospel and how to become a loving person but also to instill in them a greater sense of self-reliance. In most situations this means not doing for children what they are capable of doing for themselves.
Wrap up:
One of you will probably take care of the finances BUT both of you control the finances! ONE PERSON DOES NOT MAKE ALL THE FINANCIAL DECISIONS!
One of you pays the bills & keeps track of everything
Both of you make the budget
If you remember these principles, I KNOW you will have peace, harmony and unity in your marriage. You will not find yourselves in bondage to your expenses and spending habits.
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