Save For A Rainy Day

This topic has a large spectrum of detail and should be customized to the needs of our families in our own homes. In some cases we may be reviewing finances individually. In other cases, one might do so with a spouse. Whatever your circumstances, the goal is to have a better understanding of your own personal finances. This may include one of these steps: paying tithing, learning to be self-reliant with budgeting and planning, avoiding and eliminating debt, and Saving For A Rainy Day.

Message From The First Presidency:

“The Lord has declared, “It is my purpose to provide for my saints” (D&C 104:15). This revelation is a promise from the Lord that he will provide temporal blessings and open the door of self-reliance, which is the ability for us to provide the necessities of life for ourselves and our family members.”

Personal Finances for Self-Reliance (This is a great resource from the church that is available online and is used in the Self-Reliance program). The URL is below:

https://www.churchofjesuschrist.org/self-reliance/course-materials/personal-finances?lang=eng

Five Steps to Financial Well-being (Lane V. Erickson, Bankruptcy Attorney), URL below:

https://www.churchofjesuschrist.org/study/ensign/2004/03/five-steps-to-financial-well-being?lang=eng

Tithing

The most important step toward achieving financial well-being is to pay tithing first. President Gordon B. Hinckley counseled: “Some of you have money problems. I know that. There is never enough money in your homes. I know that. You are struggling to get along. What is the cure? The only thing I know of is payment of tithing. … It was God who made the promise that He would open the windows of heaven and pour down blessings upon those who walked honestly with Him in the payment of their tithes and offerings, and He has the capacity to keep His promise.”

• Create A Budget

The next significant step leading to financial well-being is budgeting. President N. Eldon Tanner (1898–1982) once stated: “I am convinced that it is not the amount of money an individual earns that brings peace of mind as much as it is having control of his money. Money can be an obedient servant, but a harsh taskmaster.”

Budgeting has been the topic of numerous Ensign articles. Simply put, budgeting means tracking purchases and expenses and creating a written plan to save a certain amount of money each month. But why should we budget? “Many people think a budget robs them of their freedom,” President Tanner said. “On the contrary, successful people have learned that a budget makes real economic freedom possible.” Budgeting provides economic freedom because it allows us to control our money rather than allowing our money to control us. When preparing a budget remember that it must be written to reflect an accurate record of all income and expenses.

• Avoid Unnecessary Debt

The next step in obtaining and maintaining financial well-being is avoiding unnecessary debt. Limiting debt means paying less money in interest. Elder Perry pointed out that those who understand interest earn it rather than pay it. For those who must pay it, however, interest is a relentless taskmaster. President Clark explained: “Interest never sleeps nor sickens nor dies; … Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.”

To avoid the unnecessary debt President Hinckley spoke of, reduce the number of credit cards you have and use them only when you have the cash saved to immediately pay off the balance each month. The ease of obtaining and using credit cards beguiles their destructive potential. Don’t fall into the trap of thinking, “I’ll buy it now and figure out a way to pay for it later.” In my experience, credit card debt is the number one cause of bankruptcies filed by individuals. In addition to cutting back on credit cards, families should shun all other types of short-term, high-interest loans.

• Eliminate Debt

Financial well-being is achieved only by eliminating debt. President Hinckley advised: “Get out of debt and rid yourself of the terrible bondage that debt brings. … Discipline yourselves in matters of spending, in matters of borrowing, in practices that lead to bankruptcy and the agony that comes therewith.”

President Ezra Taft Benson (1899–1994) provided a sound program for eliminating debt. He advised, “Let us use the opportunity we have to speed up repayment of mortgages and to set aside provisions for education, possible periods of decreased earning power, and emergencies the future may hold.” We can do as President Benson counseled by paying more than just the minimum payment due on a debt. In the mortgage example suggested by President Benson, any surplus amount prepaid would reduce the principal owed on the mortgage. Applying the prepayment to the principal reduces both the total interest and the total number of payments over the life of the loan.

• Save For A Rainy Day

In addition to paying tithing first, we must take another step in order to obtain or maintain financial well-being: pay ourselves. Elder L. Tom Perry of the Quorum of the Twelve Apostles explained: “After paying your tithing of 10 percent to the Lord, you pay yourself a predetermined amount directly into savings. … It is amazing to me that so many people work all of their lives for the grocer, the landlord, the power company, the automobile salesman, and the bank, and yet think so little of their own efforts that they pay themselves nothing.” But what does it mean to pay ourselves? President Heber J. Grant (1856–1945) clarified: “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.” When we live within our means, we spend less money than we make, and we pay ourselves by putting the rest in savings or in some other safe investment. These savings must remain untouchable except for specific purposes like education, missions, retirement, or legitimate emergencies.

How Much To Save For A Rainy Day:

There may be no perfect number or the right amount as each household will be different. And there may be many suggestions on how to calculate that exact number. Some may suggest 3 month’s savings and some may suggest less and some may suggest more. An example may be this: “If you want to have 3 months of savings to cover expenses for an emergency and let’s say you receive two checks a month, then add the two checks together, and then multiply by 3 and this new total will be what you would want to Save For A Rainy Day. Whether it is 1 month, 3 months, 6 months, or 12 months, we need to start saving now so as to feel secure and ultimately self-reliant