Most of us have been there. We were looking at something we wanted to buy, but we didn’t have enough money. We then fell into a thought loop of thinking of money stress. I need to make more. I should really spend less. Maybe I could get a raise?
At some point, we get so stressed out that we stop thinking about it altogether and we make that ill-advised impulse purchase. We end up going home with a depressingly light wallet and buyer’s remorse.
If that’s not been you ever, you are lucky, and the rest of us envy you. If that is you, you’re in luck. This entire article is for you! Well, it’s actually for everyone. Because everyone has to deal with money. This article details money principles I’ve learned from authorities in the Church, outside of the Church, and my own stories. They should be adapted to each of our individual circumstances.
I’m really excited about this article. I love talking about personal finances. It may be because I am a huge nerd, or it may be because everyone has to deal with money. It causes problems for so many people and I really hope to help alleviate some of those problems.I’m also interested in learning what works for you. If you disagree with anything I’ve written, or have better suggestions please share them down below.
Let’s get into these financial principles. Make sure you take a bunch of notes. There will be a test (there will be no test). If you fail, you may be labeled a failure at life (there is no test). We will also notify your parents of your failure (there will be no test). Anyways, let’s get into it.
Budget Your Money
Oh yes! I just used that six-letter word. It’s time for all of us to take more responsibility for our stewardships. The Lord has blessed us with all that we have. We need to be wise in our management of these resources. Elder Marvin J. Ashton once taught that how you manage money is more important than how much money you earn. Budgets are essential elements of a strong financial foundation.
“For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?” – Luke 14:28
In this scripture, the Lord has taught us so plainly that you need to be aware of the resources you have available. You can’t hope to accomplish anything if you don’t make an inventory. During a budgeting session, take some time to list all of your assets, and income, and all of your liabilities and expenses (income statement and balance sheet). With all of that clearly written down, prioritizing becomes easier.
To create a budget, you can choose any number of methods. There are even online options like Mint, Dave Ramsey’s Every Dollar, and other websites. The most important thing is that you find something that works. I don’t care if you have to write a sticky note on every single dollar bill telling you where it goes, and where it came from. Do it.
I also recommend you do this with complete honesty. Don’t hide anything. You will probably be embarrassed. The way we spend money is a very personal thing. It will probably sting to realize how bad of financial stewards we are. Do it anyway. You will probably see places where you are needlessly spending dollars. At other points, you will see financial fluff you are perfectly willing to pay for. That’s quite all right.
“Where there is no vision, the people perish.”- Proverbs 29:18
As the quote to the right teaches so plainly, if you don’t have any long-term goals, your budget will not work. To budget correctly you have to understand your priorities. You have to know what you want to save for, what expenses you want to have, and what kind of experiences for which to plan.
Here, let’s remember that we should “seek first the kingdom of God, and His righteousness; and all things shall be added unto [us]” (Matt 33:6). Our love of God and man should color all of our long-term priorities a rosy shade of selfless service. We can’t take it with us (it being money), but we can use it to build a legacy of love. With money, we can impact the lives of so many people around us. This takes us right into the next principle: what the Lord has asked us to do with money.
The Lord does not need money. As far as I know (living in this modern world), we do. The commandments that follow, therefore, are not for the benefit of the Lord. They benefit us. He has given us these commandments to make us better people and to lift us to His level of thinking. Follow these commandments. They have consistently blessed my life, and I know they’ll bless yours.
The Law of the Tithe
In Malachi 3:10 the Lord commanded us to bring all of the tithes into His storehouse. Our modern day Prophets have continually re-emphasized this commandment as a means for the Lord to help us care for the poor. It is also a way for us to care for our meetinghouses, build temples, and carry forth missionary work.
The Lord promises us that the “windows of heaven” will be opened. It may be surprising how that happens for some of us. According to Adam Grant, a Wharton professor, those who give are more likely to succeed. This giving, though, is linked to an actual interest in the welfare of others. Caring about others builds your life in odd and strangely beautiful ways.
When we think about tithing, let’s not just think of the bottom line. Maybe we could all include a tithing of our time, money, and hearts. We all have so much more to give.
In Isaiah 58:6-12 the Lord commanded us to take care of our poor. He has reiterated this teaching through living prophets. There are so many people who need basic necessities. Beyond the simple one tenth, we have been commanded to give a generous fast offering. As far as I know, There has been no number sum attached to this commandment though. Why? Let’s hear what C.S. Lewis thinks:
“I am afraid the only safe rule is to give more than we can spare. … If our charities do not at all pinch or hamper us, … they are too small. There ought to be things we should like to do and cannot do because our charitable expenditure excludes them.”
If this is true, it seems the Lord wants to build in us a strong desire to help our brothers and sisters around us. Even if we don’t have money, there are things we can do. The first step is opening up your heart. Obeying these two commandments will allow us to do more with less. Our finances will become easier to manage. The Lord will help us become better stewards. We’ll also feel more love, a better gift in my opinion.
This next principle goes away from strict commandment and towards common business sense. Positive cash flow is a financial term that means more money comes in than goes out. The prophets call this “living within your means.” This part is a bit tricky. If it wasn’t, we’d all be rich, wouldn’t we? This principle will take a few months (at least) to start learning. Like anything worthwhile, it will take time and effort.
Here we all have two levers on our personal money management machines we can use to manipulate our cash flow. We can lower expenses, or increase income. Ideally, we do both. Spending less sure means you bring home more. Bringing home more also helps to fatten your wallet (although it is by no means the perfect solution). Since cutting expenses is slightly more generally applicable, let’s talk about that.
The first thing you need to do is start to recognize what is a want and what is a need. This is where we need that brutal honesty I was talking about. Remember having the latest, greatest gadget isn’t a necessity. Let’s start with a list of actual necessities, like food, shelter, transportation, and business costs. Then we might be able to branch out to incorporate some parts of our lifestyle.
At a certain point, we will draw a line in the sand between necessary expenses and fluff. Fluff is ok IF we can afford it. If we can’t, then the fluff has got to go. I’m going to say here that afford means we have income left over from paying all of our expenses, debt obligations, tithing, fast offering, investing in the future, and saving some part of our income. This is the extra money that we don’t know what to do with.
Start cutting expenses with the bigger ticket items. Start searching for cheaper insurance. Look for a cheaper mode of transportation. Switch phone service providers. Move,if it will save you money. Remember, here you have to weigh sacrifice with lifestyle. Pick what you need over what you want. There is always a cheaper way.
Now, let’s talk about work. I know it’s a four-lettered word. It’s an important one though. Man, after all, has been made to earn his bread by the sweat of his brow (Gen 3:19). In this section, I’d like to share a personal story. Maybe it will help you understand that work is a blessing. It is a refining process.
The Tale of Windobros
When I got home from my mission, my friends convinced me to join them in starting up a window cleaning company. Windobros is what we called it (shameless plug). It was easy enough, and we earned a good amount of money on the side. In the second year of the business, I decided to quit my full-time job to work the window cleaning full-time with one of my business partners.
It was a pretty good gig, I was earning more money, working a little bit less than full-time and I was an entrepreneur. What could be better? The problem came when we didn’t have enough work to pay both me and my work partner. We eventually decided that I would get a full-time job and he would work the business until next summer. So, I set out to get a full-time job.
I spent about two weeks without a job. It would have been easy to go back to my old job. They would have hired me back instantly. I didn’t want to though. It felt like a step backward. I didn’t want to go back to the work I had left to work my own business. I felt it would be somewhat embarrassing. It made me feel like I had failed somehow.
Well, in those two weeks of no work, all of my self-discipline shriveled up. I felt lethargic and unmotivated. I finally came to the conclusion to go back to my old job. Immediately, I felt a renewed sense of purpose, direction, and vigor. Honestly, I even felt the Spirit more as well. Within a month, my boss had offered me a raise because we were working on a big project and he wanted me to stay.
Go to Work
Work is a blessing. It lets us feel empowered, motivated, and it helps us feel the Spirit. I know there’s bound to be someone out there who hasn’t been able to find work for a while. My heart goes out to you. Keep looking. To those who are refusing honorable work because of pride. I ask you humbly to get over it and go to work. It is a noble endeavor.
This is somewhat a mishmash of prophetic counsel, counsel from Brother Brau (Finance professor at BYU), and my own ideas and experience. I call it self-tithing. It is the idea of paying yourself first…. Well, second after you pay God. Make saving/investing a priority. This is worrying about tomorrow before your worry about today.
I don’t know your exact situation, and I would never presume to tell you exactly what to do. I’ve just noticed through my experience, if I don’t pay savings and investing first along with my expenses and not after, it doesn’t happen. I’ve had to make it happen first.
It has also been very gratifying to see it happen at a steady rate. I pay 10% to God as tithing, 10% to savings (for emergencies) and 10% to investing (through an app called Stash). It has taken a stress out of my life knowing that I am slowly strengthening my financial foundation.
So find a way that works for you. Find out how to set something aside. If you don’t have enough, cut expenses or make more money (here are 50 ideas from entrepreneur.com). Find a way to prepare for the eventual storms that will come. Don’t go overboard, but be responsible.
Plan to Pay off Debt
Speaking of being responsible, let’s talk about debt. Before we get into it, let’s have a reality check. Is debt inherently evil? No! It bugs me to hear people talk about loans, credit cards, and other lines of credit as if they were the black plague. Debt is a tool, no more, no less. In the right hands it can do amazing things, but in irresponsible hands, it can destroy lives. Be responsible and disciplined. Don’t let it control you.
When I say debt can do great things, I am talking about letting you start businesses, pay for schooling (if you choose that route), or buy a home (again, if you choose that route). There is also poorly managed debt. This is usually called consumer debt. We get a loan to buy a boat we use once a year. It is this kind of debt that gets us in trouble. We lose sight of the purpose and the process of debt. We don’t think about having to pay it back.
To use debt effectively (like in starting a business) you have to have a plan on how you will pay it back. The end goal is to be debt-free. The faster you can pay off debt, the sooner you will feel more financially secure. There are many ways of paying off debt, but figure out your plan and execute it. More often than not, your debt elimination plans will take years. There are some that take less, but figure out what works for you.
There is a reason it is called personal finance. Every situation is different. There is no way a single financial plan could work for so many different people. These financial principles do apply to everyone, however. Spend less than you earn. Save some every paycheck. Pay the Lord with your money and your heart. Pay down your debt. Work hard.
It will take some time to learn how to do all of this consistently. Be patient with yourselves, but do it. Money is one of the leading factors in divorce nowadays. If we can learn to better manage our money, maybe we can stem the tide of broken marriages.
If you learned something in this article, please share it with someone who needs it. Please share any success stories in the comment section below. Thanks for reading. May God Bless.
P.S. I told you there wouldn’t be a test. There is a quiz however.