In a sense, today’s culture is all about spending money. We all have to have the newest phone, the designer clothes, and the fastest car. Many people spend more money than they have and the families and marriages suffer because of it. Money issues are the third leading cause of all divorces according to the Institute for Divorce Financial Analysis 1 and research shows that parents can pass bad money habits to their kids.2
The following are good principles and practical ideas to help parents manage the family’s money.
- Learn to manage money before it manages you3
- Learn self-discipline and self-restraint. “Do not confuse wants with needs… If we are not careful, it is easy for our wants to become needs. Remember the line ‘There, there, little luxury, don’t you cry. You’ll be a necessity by and by.’”4
- Financial peace of mind is not determined by how much we make, but is dependent upon how much we spend.3
- Heber J. Grant has said: “If there is any one thing that will bring peace and contentment into the human heart, and into the family, it is to live within our means, and if there is any one thing that is grinding, and discouraging and disheartening it is to have debts and obligations that one cannot meet.”4
- Use a budget3 (This link is to a budget worksheet)
- 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.
- A budget helps you plan and evaluate your expenditures.
- Budget for a specified period (such as weekly, biweekly, monthly), according to your pay schedule.
- Balance income with expenditures, and spend less than you earn.
- Pay off your debts (This link is to a debt elimination calendar)
- Once you pay off one debt, use that money to pay off another.
- Work toward home ownership3
- Home ownership qualifies as an investment, not consumption. Buy the type of home your income will support.3
- Build an emergency fund
- Start with $1,000 and work towards having enough savings to cover 3-6 months’ worth of expenses.3
- It is most important to have sufficient medical, automobile, and homeowner’s insurance and an adequate life insurance program.3
- Teach your children
- Fred Gosman has said, “Children who always get what they want will want as long as they live.”4
- Teach children while they are young the importance of working and earning.
- Help your children save for their futures (college).
- Teach children to make money decisions in keeping with their capacities to comprehend.1
- 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.3
- Save for continuing education
- This is money well invested. Based on potential lifetime earnings, the hours spent in furthering your education will be very valuable indeed.3
- College tuitions and housings expenses continue to rise. Don’t let college sneak up on you. Saving now will put you ahead of the game when your kids graduate from high school.5
- Teach your children to save for college.
- Be generous in giving and sharing with others
- C.S. Lewis said: “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.”
- Simply put,
Build wealth, become insanely generous, and leave an inheritance for future generations.5
For more information see:
Debt elimination calendar: https://www.lds.org/bc/content/shared/english/pdf/callings/welfare/72726_DebtEliminationCalendar_pdf.pdf