Finances: How to Get Financial Peace of Mind

 

Have you heard of Dave Ramsey before? Maybe Jordan Page from Fun Cheap or Free? If you haven't I  highly recommend that you do. They are finance pros. I've learned a lot from them, even before this week in class. Finances really can make or break a relationship. It's the number one reason spouses argue or end up getting divorced. 

Growing up, my parents did not teach me these super important money management skills, though I wish they had. I think it's a skill that is being taught less and less, maybe because the parents themselves don't have the skills. As an adult and especially now that I have a family, I really want to take a bigger responsibility in my finances and pass that knowledge and skills down to my children. 

This week I read a few great articles that really encouraged me to take a good look at my own finances and see where I could improve. The one I'm going to focus on is called, "One For the Money: Guide to Family Finance" by Elder Marvin J. Ashton. Even if you are not a member of the Church of Jesus Christ this is still for you, it's for everyone, no matter their religious beliefs. He gives 12 points that he thinks leads to financial success and most importantly, financial peace of mind.

1. Learn to Manage Money Before It Manages You

• Financial peace of mind is not determined by how much we make, but is dependent upon how much we spend.

2. Learn Self-Discipline and Self-Restraint in Money Matters

• We live in a self-indulgent, me-oriented, materialistic society. Learning how to discipline oneself and exercise constraint where money is concerned can be more important than courses in accounting.

3. Use a Budget

• Every family must have a predetermined understanding of how much money will be available each month and the amount to be spent in each category of the family budget.

4. Teach Family Members Early the Importance of Working and Earning

• One of the greatest favors parents can do for their children is to teach them to work.

5. Teach Children to Make Money Decisions in Keeping with Their Capacities to Comprehend

• Based upon appropriate teaching and individual experience, children should be responsible for the financial decisions affecting their own money and suffer the consequences of unwise spending. “Save your money” is a hollow pronouncement from a parent to a child. “Save your money for a mission, bicycle, doll house, trousseau, or car” makes understandable sense.

6. Teach Each Family Member to Contribute to the Total Family Welfare

• As children mature, they should understand the family financial position, budget and investment goals, and their individual responsibility within the family. Encourage inexpensive fun projects, understandable to the children, that contribute to a family goal or joy.

7. Make Education a Continuing Process

• Complete as much formal, full-time education as possible, including trade schools and apprentice programs. This is money well invested.

8. Work Toward Home Ownership

• Home ownership qualifies as an investment, not consumption. Buy the type of home your income will support. Improve the home and beautify the landscape throughout the period you occupy the premises so that if you do sell it, you can use the accumulated equity and potential capital gain to acquire a home more suitable to family needs.

9. Understand the Influence of External Forces on Family Finances and Investments

• Inflation continues to offset a major portion of average wage increases. A larger paycheck may not mean more purchasing power and should not be an excuse for extravagant purchases or additional debt.

10. Appropriately Involve Yourself in a Food Storage and Emergency Preparedness Program

• Accumulate your basic food storage and emergency supplies in a systematic and orderly way.

11. Pay an Honest Tithing (or giving to a charity)

• Successful financial management in every LDS home begins with the payment of an honest tithe. If our tithing and fast offerings are the first obligations met following the receipt of each paycheck, our commitment to this important gospel principle will be strengthened and the likelihood of financial mismanagement will be reduced.

12. Appropriately Involve Yourself in an Insurance Program

• It is most important to have sufficient medical, automobile, and homeowner’s insurance and an adequate life insurance program. Costs associated with illness, accident, and death may be so large that uninsured families can be financially burdened for many years.

Which 12 points stood out to you? Can we say all?! I think all 12 points are very important. The ones that stood out to me were 9 & 10 because prices are so high on everything right now! Going to the store depresses me. Preparing for class this week allowed my husband and I to have a good discussion on finances and goals that we have. It was so good and brought me some peace. I highly recommend sitting down and coming up with a budget. Place this budget where you can see it on a daily basis or you will forget, trust me on this one. Also, if you have debt, make it a top priority to get out of it as fast as you can. Below is a great resource on how to make this happen. This was designed by Elder Ashton and is the same concept that Dave Ramsey uses and Jordan Page. The key is once you pay off one area of debt, don't go spend that money, but put it toward the next area of debt you have. Repeat this till you are debt free. The money adds up fast, which makes it fast in getting out of debt. In this example below, we see that in one year this couple was able to pay off $5,870 in debt. That doesn't seem like a lot now, but it was when this came out in 1975ish. 

I just want to close with my testimony that when you pay your tithing or donate to charity or help the poor and needy, God is going to bless you. Teach the importance of taking care of those in need and giving back to God. 

                                                                                    ♡♡♡ -Allison