One for the Money

A few years ago we were given the pamphlet One for the Money: Guide to Family Finance (you can download the pamphlet by clicking the title and then the link on the right hand side). We were able to use the guidelines as were outlined in the pamphlet and eliminated all of our credit card, and credit line debt. It was an amazing and liberating feeling.

I spent this morning thinking of those bliss filled years and decided to review an online course called, Peace in Your Hearts: Managing Household Finances Wisely. It is available here through the churches provident living website. The course took about an hour (partly because Finley needed me to pause it so she could show me how far she could kick the beach ball, and to tell me a "whisper"=secret, and to start Dumbobee {the movie Dumbo} for her. It may take you less time). It reviewed a lot of basic information and counsel that I have been taught over and over. But there is always a need for me to hear it all again...apparently. Here is some of the sage advice I gleaned from my morning lesson:

"We encourage you wherever you may live in the world to prepare for adversity by looking to the condition of your finances. We urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt. . . . If you have paid your debts and have a financial reserve, even though it be small, you and your family will feel more secure and enjoy greater peace in your hearts."
—The First Presidency, All Is Safely Gathered In: Family Finances, Feb. 2007, 1


*both worksheets below are available in the links listed above. also there are online calculators at the end of each section (of the online course) that can help you determine your budget, debt ratio and savings plans.

Set a budget

Even if you don't have excess debt, "Every family should have a budget." -Spencer W. Kimball

Debt elimination

"Frugality requires that we live within our income, avoiding debt, and being able to distinguish between wants and needs. Self discipline is required to avoid the buy now pay later philosophy, and adopt the save now buy later practice." - James E. Faust

Savings

Liquid savings available for emergencies should be sufficient to cover at least three months of all essential family obligations.

2 examples of saving: Both couples married at the same time. The first couple began saving right away but could only save money for the 1st ten years of marriage. The second couple delayed saving for 10 years before they started.

1st example: The Youngs

Age: 22 (The young age of this couple is a dead give away that they are Mormon. Who else gets married so young!)

Account Type: I(individual) R(retirement) A(account)
Tax deferred
8% interest annually

Yearly Investment: $1,200.00

Length: 10 years

2nd example: The Vandorns

Age: 32

Account Type: I(individual) R(retirement) A(account)
Tax differed
8% interest annually

Yearly Investment: $1,200.00

Length: 33 years (after 10 year- delay)

The Results: IRA at age 65

The Youngs/ The Vandorns

Investment $12,000/ $39,000
IRA Balance $220,358.80/ $175,140.74
Net Gain $208,358.80 / $135,540.74

Moral of the story: Chad and I are screwed! No... We had better START NOW or we'll really be screwed!

Here is to living more providently. In the words of President James E. Faust,"Living providently means living well within our means and providing for future needs and events." This will be tonights FHE. Even though it seems like we have made 1,000 new budgets. It can't hurt to rededicate ourselves to the cause. Tonight we'll sit down to write budget 1,001.