Monday, July 26, 2010

Time to Budge!

OK, let's break from this mamby pamby grocery stuff. Let's talk money management!

Do you keep running out of money each month? Do you have car payments? Furniture payments? Payments for your payments? Do you keep putting stuff on the credit card hoping some money will come really soon to wipe the balance away? Are you wondering how much longer you will be able to keep your house? Is saving money for your kids' college education or for your retirement a pipe dream? What would happen if you or your husband were laid off? If your car broke down, how would you pay for it to be fixed? If you are married, do you fight with your spouse about money or avoid the topic altogether? Is how you manage the money you encounter in alignment with what you understand of the Lord's counsel?

If the answer to any of these questions makes you feel fear, worry or guilt, then you are like most people in the industrialized world. The latest statistics from the Federal Reserve indicate that the total amount of consumer debt in the United States stands at nearly $2.5 trillion dollars, which breaks down to an average of $8,000 of debt per man, woman and child currently living in this country. (And you know it's not the kids running up those bills!)

Many Latter-day Saints have been caught in the debt trap though we have been counseled to be of the world but not in its maniacal current. Jesus prayed, as recorded in John 17:
14 I have given them thy word; and the world hath hated them, because they are not of the world, even as I am not of the world.
15 I pray not that thou shouldest take them out of the world, but that thou shouldest keep them from the evil.
16 They are not of the world, even as I am not of the world.
So, here is how we stay out of the financial mess that this world is in. From years of study, I have learned a bazillion things about personal finance. And all those years have yielded this fact every single time:

Cash flow planning, spending plan, money strategy, budget, whatever you want to call it, this is where you start. There are no ifs, ands, or buts about it. This is where you start to pay off debt, or grow a savings account, or plan for retirement. Yet, this is the most dreaded and avoided step. How do I know? The $2.5 trillion dollars of consumer debt did not occur with a budget in place. I see people sidestep the budget creation and think they will be able to slay debt or save money or maintain wealth long-term. Maybe by lucky accident the numbers will just align with the stars. It will not occur by prayer alone. Faith must be present, and faith is presented by our actions, by doing that which we can do.

All true faith must be based upon correct knowledge or it cannot produce the desired results. Faith in Jesus Christ is the first principle of the gospel and is more than belief, since true faith always moves its possessor to some kind of physical and mental action; it carries an assurance of the fulfillment of the things hoped for. ("Faith", Bible Dictionary)

A budget is a NECESSITY! There is a reason why every successful business and the Church have budget plans. It is NECESSARY to success! Maybe you aren't trying to please shareholders. Maybe you just want to have enough money each month without relying on credit cards and loans. Maybe you are itching to become free from debt, or save up money for your golden years or set aside a little assistance for your children's education. Or save up for a house or pay off the one you have. A budget is NECESSARY towards these ends. (Did I already say NECESSARY?)

A budget is a plan on paper that directs your money where to go, a map for your money. If your budget could sing, it would be singing this song.

Whether you fall below the poverty line or are a member of the world's 1% who are megawealthy, you need a budget. Your budget will look different than mine and different than that of your friends and neighbors, but you must have one nonetheless as the first step to becoming a good steward of your financial blessings. The budget is like creating your savings and freedom from debt in the spirit before they are created in the physical.

For I, the Lord God, created all things, of which I have spoken, spiritually, before they were naturally upon the face of the earth. (Moses 3:5)

Now, girl, warm up your Excel and stretch those typing fingers because for the next week, I will show you the details on how I created a budget for my family that has flexed with us for years (from our time as a couple without kids to the present day with kids) and allowed us to create a large safety account and get out (and stay out) of debt during that entire time.

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