Family Finance Workshop

1. Family Finance Workshop Welcome

2. Preparedness/Security • Peace of Mind • Family Harmony Why should I make the effort to closely manage family finances?

3. Money is no big deal, when you have enough … Attitudes Toward Money Money isn’t everything, but it is important! it is a big deal when you don’t!

4. The Law of Financial Security

5. And when we obtain any blessing from God, it is by obedience to that law upon which it is predicated. D&C 130:21

6. Financial Security is NOT a blessing predicated upon the law of tithing... …subsistence is.

7. Full tithe payers have NO CLAIM to the blessings of… The Law of Chastity The Law of the Sabbath The Word of Wisdom Temple Covenants The Law of Financial Security …unless they also abide those laws.

8. All who obey the Law of Financial Security receive the blessings predicated upon that law… …whether or not they obey any other eternal laws.

9. “After paying your tithing of 10 percent to the Lord, you pay yourself a predetermined amount directly into savings. That leaves you a balance of your income to budget for taxes, food, clothing, shelter, transportation, etc.” L. Tom Perry, “Becoming Self-Reliant,” Ensign, Nov. 1991, 64 What is the Law of Financial Security? Tithing is mentioned first because it is the more important law… ….not because it is a prerequisite to the blessings of the Law Financial Security.

10. Law of Financial Security: Earn more than you spend. Spend less than you earn… …and accumulate the surplus.

11. - The Dismal Science “The study of man’s attempt to satisfy unlimited wants with limited resources.” ECONOMICS

12. Spending Discipline: Buying only what you can afford. Buying only what you can pay cash for. Choosing not to buy what you can pay cash for.

13. Identifying Needs and Wants Wants Needs “Goods and services which sustain life.” “Goods and services which support lifestyle.”

14. Identifying Needs and Wants Wants Needs Income

15. What if expenses are equal to or greater than income? Ugh! Groan! and / or • Reduce Expenditures • Structural changes (house and vehicles) • Non-structural changes (everything else) Ouch! • Increase Earnings • Improve marketable skills • Upgrade employment • Supplemental job/income See your Ward Employment Specialist

16. Start small, watch it grow and bear fruit! How Can We Begin Saving? • When We Get A Pay Increase • When We Receive an Income Tax Refund • When We Pay Off a Loan • Postpone a Major Purchase • Give Up Something • Set-Up Payroll Deduction

17. Investing • Types of Investments • Real Estate • Stocks, Bonds, Futures • Mutual Funds • Miscellaneous Investment Funds • Precious Metals • Savings Accounts • Certificates of Deposit (CDs) • etc. Read a book! Investing is serious business. There are significant risks and tax implications. One should become educated and/or engage a reputable investment counselor.

19. The wise use of debt is an important element of the Law of Financial Security!

20. Debt Safety Rules Rule 1: Never borrow money to buy something that is likely to lose value.

21. Rule 1: Case Studies Genuine Leatherette Couch 1998 Ford Escort House (Primary Residence) Kitchen Remodel Common Stock The Living Scriptures on CD College Degree Food Storage

22. Debt Safety Rules Rule 1: Never borrow money to buy something that is likely to lose value. Rule 2: Set your own limits Rule 3: Have a repayment plan Rule 4: Read the docs BEFORE you sign Rule 5: Do the math (cost NOT payment) Rule 6: Avoid negotiating the purchase and the loan at the same time Rule 7: Know and manage your credit score

23. Digging-Out • Reducing / eliminating existing debt • Sell assets • Apply planned surplus (pay it down) • Credit counseling (renegotiate terms) • Debt consolidation loan • Bankruptcy

24. Digging-Out Some friendly advice regarding Debt Reduction • Don’t ignore the problem • Don’t panic • Be realistic with time expectations • How long did it take to get into debt? • Don’t fall for “quick fix” schemes and scams

25. The Family Is An Enterprise Spending Income Accumulation

26. Financial Tools Tools for the Family Enterprise • Financial Management Tools: • Financial Plan • Balance Sheet • Budget • Tracking System

27. Financial Plan • Elements of a Financial Plan • Goals and Objectives • Short, medium & long term • Specific (use numbers) • Realistic but aggressive • Roles and Responsibilities • Prepare financial statements • Pay bills • Reconcile checking account • Track spending • Ground Rules • Spending guidelines • Use of debt • Individual discretion Write It Down!!! Review Annually (at least)

28. Balance Sheet Your Financial “Report Card” • Statement of Financial Condition • Lists assets (what you own) • Lists debts (what you owe) • Calculates “net worth” • “Snapshot” (point in time) Review Quarterly

30. Budget • List and total income sources (net amounts) • List expenditures in priority order • Tithing • Savings (planned surplus) • Fixed expenses • Regular variable expenses (average) • Seasonal expenses • Optional expenses (discretionary spending) • Include a buffer for the unforeseen • Compare income and expenses • Make adjustments to achieve a balance Review Monthly

31. Sample Budget Plan Do Review Adjust Repeat

32. Debit Card Tracking System • Record what you spend • Notebook • Spending log • Computer program • Receipts in a jar • Cash in envelopes • Keep your check register current • Reconcile your bank statement each month Daily

33. Summary • Financial security is a “natural law” that requires • saving and investment • Spending discipline is the power to not buy what you can pay cash for • Financial management tools: • a. Financial plan • b. Balance sheet • c. Budget • d. Tracking system • PLANNED SURPLUS is the key • Planned Surplus! • Planned Surplus! • Planned Surplus! • Planned Surplus!