Living Within Your Means???

I have to speak on Sunday...on the above topic. Bluh.

I'm going to start storing my talk notes here because I'm at work. I hope you don't get too bored with this...skip this post if necessary.

PS. I'm not an expert on the subject (that's probably why I get to speak on the topic).

BEGIN TALK

1) Talk about fish story--After several trips to Walmart with my mom when I was about 11 or 12, I decided that I wanted to get a fish tank and fish. Every trip we made to Walmart, I would head straight to the fish section and scheme and plan and dream. I wanted a fish tank and some fish SO BAD!!!!!!!

So, I saved my allowance for a little while, but I still did not have enough money. I was getting impatient. So, I asked my mom if I could do something to earn more money. She had the perfect job. She wanted me to wash every window in our house, inside and out and wash the blinds on each window. She said she would pay me $1 for each window I completed.

So, I got to work! Before I could finish, my mom had planned a trip to Safford to Walmart which was 45 minutes away. I realized I would not have enough money by the time we went back to Safford. I would either have to wait for the next trip or ask my mom to give me the money in advance for the window washing project.

So, I asked my mom for the window washing money early. She decided that that would be okay, but she reminded me that I would have to finish washing her windows to pay for the fish tank.

On our trip to Walmart, I purchased my fish tank and a few fish. I loved it. It was my pride and joy. But, my bubble was burst when my mom reminded me that I still had windows to watch.

Washing the windows to pay off my fish tank was hard. It didn't feel like I had a goal or reason to be working. I had received the reward of working in advance, so it didn't feel like working was getting me anywhere.

I'm happy to say that I finished washing the windows, but my mom taught me a valuable lesson. After the windows were washed, she talked with me and reiterated that earning money to buy something is much easier than buying something on credit and having to pay for it later.

Looking back, I'm glad that my mom didn't charge me interest! :)


2) Now that I'm older, I have realized that sometimes living within your means is a little bit harder to define than it was when I was 11 or 12. Sometimes, there are things that we must buy on credit and family finances become a lot more complicated than counting the money in an 11 year old's bank.

In my research on the subject I spent a lot of time on the providentliving.org under the Family Finances section. I highly recommend you check into it yourself.

Specific resources I liked were:

A) One For the Money Pamphlet
B) The Budget Worksheet that can be printed
C) The Financial Calculators (The one I tried was "How much should I save for emergencies?")
D) All Is Safely Gathered In--Family Finances Pamphlet

I am going to talk about the 5 subjects in that Pamphlet briefly, but I highly recommend the Provident Living website!

Number 1--PAY TITHES AND OFFERINGS

Since my husband is already speaking on this subject, I will not cover this topic in depth. However, I do want you to note that this point was listed first in the pamphlet for a reason.

Provident Living.org states, "Successful family finances begin with the payment of an honest tithe and the giving of a generous fast offering. The Lord has promised to open the windows of heaven and pour out great blessings upon those who pay tithes and offerings faithfully."

Number 2--AVOID DEBT

Why does this pamphlet include this second?

According to MSN.com

*About 43% of American families spend more than they earn each year.

*Average households carry some $8,000 in credit card debt.

*Personal bankruptcies have doubled in the past decade.

Knowing what is okay and what is not is difficult to define. According to the website, "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."

So, BUYING A HOME, PAYING FOR EDUCATION, or other VITAL NEEDS are included.

But, what if we want that fish tank now?

Elder Joseph B. Wirthlin taught: “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.”

In my situation, washing window after window. But, as I mentioned earlier, I was lucky that my mom did not charge interest. Now, if my mother's name had been Visa or MasterCard instead of Nyla, it may have been a different story! :)

Elder Robert D. Hales in April 2009 conference shared 2 lessons he has learned about wants and needs and being a provident provider:

"The first lesson was learned when we were newly married and had very little money. I was in the air force, and we had missed Christmas together. I was on assignment overseas. When I got home, I saw a beautiful dress in a store window and suggested to my wife that if she liked it, we would buy it. Mary went into the dressing room of the store. After a moment the salesclerk came out, brushed by me, and returned the dress to its place in the store window. As we left the store, I asked, “What happened?” She replied, “It was a beautiful dress, but we can’t afford it!” Those words went straight to my heart. I have learned that the three most loving words are “I love you,” and the four most caring words for those we love are “We can’t afford it.”

"The second lesson was learned several years later when we were more financially secure. Our wedding anniversary was approaching, and I wanted to buy Mary a fancy coat to show my love and appreciation for our many happy years together. When I asked what she thought of the coat I had in mind, she replied with words that again penetrated my heart and mind. “Where would I wear it?” she asked. (At the time she was a ward Relief Society president helping to minister to needy families.)

"Then she taught me an unforgettable lesson. She looked me in the eyes and sweetly asked, “Are you buying this for me or for you?” In other words, she was asking, “Is the purpose of this gift to show your love for me or to show me that you are a good provider or to prove something to the world?” I pondered her question and realized I was thinking less about her and our family and more about me.

"After that we had a serious, life-changing discussion about provident living, and both of us agreed that our money would be better spent in paying down our home mortgage and adding to our children’s education fund.

"These two lessons are the essence of provident living. When faced with the choice to buy, consume, or engage in worldly things and activities, we all need to learn to say to one another, “We can’t afford it, even though we want it!” or “We can afford it, but we don’t need it—and we really don’t even want it!”


Just a week or two ago, I took my car to get an oil change. For convenience reasons, I took my car to a place across the street from my work that a co-worker recommended, so I was new to this particular shop which is a carwash/gas station/oil change business. When I pulled up to get my oil changed, I got out of my car and the attendant asked me what I would like done that day. I explained that I needed an oil change. He informed me that my oil change came with a free car wash and vacuum, but that I could upgrade my carwash to a better carwash with a hand wax for a small fee. I asked what the fee was and felt it was reasonable. Then came this line,

"But, what I think you'll really want to do instead is to get a discounted price on our car detailing. We will shampoo your carpet and upholestery and detail clean every surface of your car. You're going to love this."

At this point, I was thinking, "WOW! I would love that!"

Then he said,"You won't believe the difference when we're through! Your car will look brand new when we're finished! It will only cost you"...and he pointed to the price on his clipboard.

That's when I took a step back. I drive a 7 year old Ford Taurus with more than 100,000 miles. It is not brand new. Why did I want it to look brand new? That price was WAY too high.

Then, he asked me if my headlight covers cloudiness bothered me. Even though I said no, he insisted that with the solution they offered my headlights would appear to be MUCH brighter! He then showed me another outrageous price on his clipboard.

I will spare you the details, but this salesman offered me about 4 other services before he gave up.



This is an extreme example, but one I have thought about a lot lately. Why did it sound so appealing to me to have my car look new? It's not new! It's not even CLOSE to new!

But, advertisements, salesmen, peer pressure, greed, and other factors entice us to spend, spend, spend on things that are not needed.

In the January 2001 Ensign an article by Bernard Poduska said this:

"At first glance, the behavior of those who seem to be chronically in debt may appear irrational or irresponsible. Even in the face of cold reality, some persist in consuming well beyond their income level or reasonable ability to repay creditors. What compels people to jeopardize their economic well-being? Why are some people always in debt? The answers are complex, but with the help of the Lord, it is possible to learn the truth about ourselves. For many people, discovering the answers to such questions can become the key to financial stability."

This article gave the following possible reasons for this behavior:

Filling Unmet Needs
Feelings of Entitlement
Feelings of Inadequacy
The Unexpected


For each person the answer can be different. Do you spend to impress friends? Do you spend because you are looking for happiness in things instead of in gospel principles? Do you spend because you have low self-worth and the newest lip gloss or car will make you look younger?


Elder Hales said in his talk, "Being provident providers, we must keep that most basic commandment, “Thou shalt not covet”. Our world is fraught with feelings of entitlement. Some of us feel embarrassed, ashamed, less worthwhile if our family does not have everything the neighbors have. As a result, we go into debt to buy things we can’t afford—and things we do not really need. Whenever we do this, we become poor temporally and spiritually. We give away some of our precious, priceless agency and put ourselves in self-imposed servitude. Money we could have used to care for ourselves and others must now be used to pay our debts. What remains is often only enough to meet our most basic physical needs. Living at the subsistence level, we become depressed, our self-worth is affected, and our relationships with family, friends, neighbors, and the Lord are weakened. We do not have the time, energy, or interest to seek spiritual things."

He also said, "...we all need to learn to say to one another, “We can’t afford it, even though we want it!” or “We can afford it, but we don’t need it—and we really don’t even want it!”'

and

"Whenever we want to experience or possess something that will impact us and our resources, we may want to ask ourselves, “Is the benefit temporary, or will it have eternal value and significance?” Truthfully answering these questions may help us avoid excessive debt and other addictive behavior."




Number 3--USE A BUDGET

Growing up, I remember a notebook in one of the kitchen drawers that had my family's budget information carefully recorded by my mom. I remember that each week my mom would sit down on the couch with her notebook and her bills and bank statements and work until everything was figured out.

I also remember the box in the cupboard in the kitchen that held the envelopes marked "food," "gas," "miscellaneous," and (my favorite) "allowances." My mom would go grocery shopping once every two weeks, but anything bought outside of that shopping trip came out of one of those envelopes. The miscellaneous enveloped covered expenses outside of those three categories and also gas or food when the other two envelopes were emptied. Each of us kids got to take out our weekly allowance every two weeks after completing our chores in an acceptable manner.

I know my parents went through some tough times financially, but because of my mom's creative budgeting and my dad's support, I cannot ever remember wanting for any necessities.

My parents did what they could afford and budgeted carefully. But, they weren't good at it at first.

When my parents were first married, my dad was in charge of the family finances. After a few bounced checks, they both decided it would be a good for my mom to take over. My mom didn't really know how to budget, but through practice created a system that worked for her.

Luckily, there are now resources that can help us that have been put out by the church.

The budget worksheet found on the Provident Living website can be a good place to start.

In the June 1985 Ensign, Robin Zenger Baker wrote:

"Like dieting, budgeting sounds hard. Who wants all that agonizing self-restraint? It sounds about as fun as washing dishes. But the payoffs are high, and a budget doesn’t always have to mean scrimping and no dessert. I have personally found budgeting to be a rewarding and enjoyable source of stability in our home.

"Although budgeting may seem complicated, basically it just means planning ways to live on less than you earn. It means writing down what you think you’ll spend and what you actually do spend, keeping a record of money flow in order to control where it goes.

"When you know where you’re spending, you can set wise priorities for the limited funds at your disposal."


In the June 1973 Ensign Rulon T. Burton explained how to successfull budget,

"To calculate what an average monthly budget will be, first total your separate monthly financial obligations for the previous year and divide by 12; this will give you a base to work from. Of course, no month will really be average, for one month may range below average and the next month may soar above average. But by the end of the year, total monthly budgets should average out pretty well.

"When you have decided to live strictly by your budget, you should spend nothing unless there is money in the budget for that item.

"Even though for the first months you may not have enough money in your budget to meet actual expenses, try not to take money budgeted for one expense to satisfy bills from another. If you must, take the money from the emergency fund, even though it is still small. Then, with each new month, try to find fewer occasions to draw from that fund to adjust your budget, so that before the first year is over, you are using the emergency fund only for genuine emergencies."

Speaking of an emergency fund...

Number 4--BUILD A RESERVE

President Gordon B. Hinckley has taught: “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.”

Even if you can only save a small amount, it's better than nothing, and small amounts will add up quicker than you would think.

In the February 1992 Ensign the "Random Sampler" said this:

"Do you have enough money set aside to help cover such financial emergencies? If not, it’s important to establish an emergency savings account—a reserve fund that will lessen the shock of financial hardship.

"Your first goal in setting up an ideal emergency fund should be to have at least enough money to cover your expenses for three months. After that, you can expand your goal to six, nine, or even twelve months. Financial experts say that in times of financial crisis, families can usually cut expenses in half and still get by. This means that unless your monthly expenses during a crisis were unusually high, you probably would need only one and one-half times your monthly income to cover your expenses for a three-month period. If you intend to draw from your year’s supply of food, clothing, and other items, you can adjust your goal accordingly."


Many of us aren't able to save three months worth in an emergency fund today, but the article also said

"Be patient and persistent as you contribute to your emergency savings account. Remember that it is by small, regular deposits that you will achieve your financial goals. For most people, it takes one to three years to save enough money so that the account will be an effective buffer against financial crises."





Number 5--TEACH FAMILY MEMBERS


Provident Living.ORG states, "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."


I'm, unfortuneately, not an expert on this topic, but I can share some ways that I have been taught to live within your means.


-ORANGE JUICE--When I was young, my parents didn't have a whole lot of money. My mom wanted us to be able to have juice for breakfast on occassion, but, believe it or not, buying juice concentrate was expensive for my parents. I do remember drinking juice for breakfast as a kid, and I considered it a treat. We definitely didn't have juice every day, but when we did, the juice was divided among my parents and 5 siblings and me. One can of juice concentrate had to be spread among 8 people. My mom would always take out 8 small size glasses from the cupboard and divide it for us. Each of us would get one glass. Even though it wasn't much, I don't remember feeling deprived as a child. I don't remember even caring that I didn't get more than my small glass.


-"GARDENING"--Starting in about 4th grade, my family "gardened" with my uncle and his family. This garden was not the type of garden that you would normally think of. It was a third of one of the acres of my uncle's farm. And there were lots of rows of vegetables. My family would wake up around 4:30 or 5:00in the morning and head out to the garden and hoe weeds and pick vegetables. We used to produce at home. It was a lot cheaper for our family, and we all whined and griped about getting up so early and hoeing weeds and picking vegetables, but we never went hungry and we saved a lot of money.

-Obviously watching my mom budget every week.

-My fish tank experience.

-Many other situations.

Bear Testimony!

AMEN!