Spending less money than you make is essential to your financial security. Avoid debt, with the exception of buying a modest home or paying for education or other vital needs. If you are in debt, pay it off as quickly as possible. Some useful tools in becoming debt free are a debt-elimination calendar and a family budget worksheet.
Distinguish between Needs and Wants
We must learn to distinguish between wants and needs. We should be modest in our wants. It takes self-discipline to avoid the “buy now, pay later” philosophy and to adopt the “save now and buy later” practice.
Joseph B. Wirthlin said, “All too often a family’s spending is governed more by their yearning than by their earning. They somehow believe that their life will be better if they surround themselves with an abundance of things. All too often all they are left with is avoidable anxiety and distress”.
Getting … and Staying … out of Debt
We should avoid debt. There is nothing that will cause greater tensions in life than grinding debt, which will make the debtor a slave to creditors. A specific goal, careful planning, and determined self-discipline are required to accomplish this.
Eldon Tanner said “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”.
Use a Budget
Keep a record of your expenditures. Record and review monthly income and expenses. Determine how to reduce what you spend for nonessentials. Use this information to establish a family budget. Plan what you will give as Church donations, how much you will save, and what you will spend for food, housing, utilities, transportation, clothing, insurance, and so on. Discipline yourself to stay within your budget plan. A budget worksheet is a useful tool to help you with your plan.
Build a Reserve
Gradually build a financial reserve, and use it for emergencies only. If you save a little money regularly, you will be surprised how much accumulates over time.
Gordon B. Hinckley said, “Set your houses in order. If you have paid your debts, if you have a reserve, even though it be small, then should storms howl about your head, you will have shelter for your wives and children and peace in your hearts”.
Teach Family Members
Teach family members the principles of financial management. Involve them in creating a budget and setting family financial goals. Teach the principles of hard work, frugality, and saving. Stress the importance of obtaining as much education as possible, particularly in sound financial management.
For individuals and family members alike, proper money management and finances are tremendously important. The American Bar Association has indicated that 89 percent of all divorces can be traced to quarrels and accusations over money. Others have estimated that 75 percent of all divorces result from clashes over finances. Some professional counselors indicate that four out of five families are strapped with serious money problems. Marriage tragedies and bankruptcies are not caused simply by lack of money, but rather by the mismanagement of personal finances. Money management should take precedence over money productivity. Proper money management and living within one’s means are essential in today’s world if we are to live abundantly happily.