I have a secret. I have tried to stay away from using too many personal details on this blog. Why? Mostly because I want my situation to ideal before I share it. But, guess what? … More
Lower the perceived cost of the plan, increase the perceived value
What is perceived cost and perceived value? Investopedia says this, “Perceived value is the worth that a product or service has in the mind of the consumer. For the most part, consumers are unaware of the true cost of production for the products they buy; instead, they simply have an internal feeling for how much certain products are worth to them.” (http://www.investopedia.com/terms/p/perceived-value.asp)
The key word is ‘perceived.’ The dictionary says that perceive means:“to recognize, discern, envision, or understand.”
An example of perception is a clean car. Ever notice that after you go through a car wash, your car just seems to drive better? I know after I get my car washed and I vacuum the interior, suddenly my car seems like it drives much better, and it’s value seems to have jumped a few thousand dollars. Did anything about the car change (except for the fact that it has less dust on it)? No. But my perception of the car changed.
Budgets often fail because of our mind set when creating them and attempting to follow them. The perceived cost (emotional, self-discipline, going without, etc.) of following a budget is much higher than the perceived benefit or value. For years, until recently actually, my budget would make me anxious and feel restricting. I felt like my budget prevented me from doing what I wanted. That’s when debt entered. If a desired spending option wasn’t in the budget, I would use the credit card. That way I could get what I wanted, but my bank account still had money in it to pay the bills, utilities, etc. I kept convincing myself that I was following a budget, because I wasn’t spending the money in the bank account. Deep down, I felt defeat every time I used the credit card, but I could justify it because each purchase was ‘necessary’ and I was gaining cash back bonus points on my credit card, which I could apply towards the credit card balance. With this mind set, the ‘cost of the plan’ or the ‘pain’ that a budget caused was too high.
However, once I had finally realized that this was not the way I wanted the rest of my life to go I began to change my thinking. A few things caused my thinking to shift. One of these was the crazy amounts of second and third jobs both my husband and I were working. After his regular job my husband would go to the local grocery store and stock shelves until 2:00 in the morning. I would get up very early some mornings and donate plasma. I also picked up a couple transcription jobs and a small babysitting gig. I realized that if I didn’t stop using my credit cards and other debt, we would be on this cycle forever – working a six different jobs just to pay all the bills and the debt.
Another reason for my shift in perception was my children. Two of my children were diagnosed with ADHD last year. In addition, one received a diagnoses of general anxiety and the other of mild ODD (oppositional defiance disorder). Because of this, I had been looking into interventions to help them learn coping skills and improve their focus as well as provide peace for their emotions. One thing that helped them very much was therapeutic horseback riding. It had amazing benefits and results! But, it is not a low-cost activity. I realized that I could not afford to keep taking my girls to this activity, based on our debt load and payments. This really hit me hard.
So, I decided enough was enough! I vowed to live according to my budget, to live within my means. I put a freeze on all of my credit cards, so that I could no longer use them. In addition, I took my commitment to my Heavenly Father. I told him I would no longer live above the means that he had provided for us. I asked for his help to be able to continue in my commitment.
All these things changed my thought on the perceived ‘cost’ or ‘pain’ a budget caused. I now saw it for what it was – rules to live within so that I could become free and have peace. Rules that would help me to be able to, eventually, achieve the things I want, and provide opportunities for my children. Now the perceived cost of a budget was no longer high and unbearable. It was, instead, a symbol of my commitment to myself, my family and to my Heavenly Father that I was grateful for all of my abundance and that I would be a better steward of the things I had been given, including my time and my finances.
How can you change your perception about your budget? Some people find it helpful to call their budget a ‘spending plan.’ It sounds less restricting and more fun. I, however, saw through this and knew it was still the same thing. Nothing was as powerful to me as finding my ‘Why.’ Once I found my why, then suddenly my budget was my tool to help me to get to my goal based on my ‘Why,’ instead of a barrier or restriction. Watch for my next post when we learn about finding our ‘Why.’
Why do you think it’s hard to follow a budget?
Have you been able to successfully follow a budget in the past, or do you do so now?
Do you know how to create a budget that will work for you?
I have taken a break from the blog, in order to train and begin my job as a Financial Coach for Mvelopes. I love it!! It’s amazing to talk to people who have a desire to improve their financial situation and be able to teach, encourage and help them!
Now that I have developed my new coaching schedule, I am back to working on some new blog posts, so stay tuned.
While you’re waiting, here is an excellent talk from General Conference about personal finance. It’s called “Greed, Selfishness and Overindulgence” by Joe J. Christensen. Some favorite quotes from this talk:
“If we are to be self-reliant and in a position to share, obviously we must acquire some resources. If we live within our means and avoid debt, resources can be accumulated. There are those with average incomes who, over a lifetime, do amass some means, and there are those who receive large salaries who do not. What is the difference? It is simply spending less than they receive, saving along the way, and taking advantage of the power of compound interest.
Financial consultants indicate that “most people have it all wrong about wealth. … Wealth is not the same as income. If you make a good income each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend.”
“Our resources are a stewardship, not our possessions. I am confident that we will literally be called upon to make an accounting before God concerning how we have used them to bless lives and build the kingdom.”
Check out the full talk:
And, for extra credit, here is one by Elder Perry about Self-Reliance:
Is money temporal or spiritual?
D&C 29: 34-35 “Wherefore, verily I say unto you that all things unto me are spiritual, and not at any time have I given unto you a law which was temporal; neither any man, nor the children of men; neither Adam, your father, whom I created.
- Behold, I gave unto him that he should be an agent unto himself; and I gave unto him commandment, but no temporal commandment gave I unto him, for my commandments are spiritual; they are not natural or temporal, neither carnal nor sensual.”
President Uchtdorf has told us “Like two sides of a coin, the temporal and spiritual are inseparable….The temporal is intertwined with the spiritual. God has given us this mortal experience and the temporal challenges that attend it as a laboratory where we can grow into the beings Heavenly Father wants us to become.” (https://www.lds.org/general-conference/2011/10/providing-in-the-lords-way?lang=eng)
This is one reason why I feel it is so important to be educated in the matters of personal finance. The money that is provided to us, for us to use to care for our families and serve others is not a temporal-only law. It is a spiritual law of stewardship. Money simply represents the ability to develop self-control, wisdom, obedience, sacrifice, hard work and love and charity. We know that money is not evil in and of itself. It is, rather, the love of money that is the root of the evil. (see 1 Timothy 6:10)
1 Nephi 14:7 “ For the time cometh, saith the Lamb of God, that I will work a great and a marvelous work among the children of men; a work which shall be everlasting, either on the one hand or on the other—either to the convincing of them unto peace and life eternal, or unto the deliverance of them to the hardness of their hearts and the blindness of their minds unto their being brought down into captivity, and also into destruction, both temporally and spiritually, according to the captivity of the devil, of which I have spoken.”
When I think of the devil bringing us down to destruction I think of it in a spiritual sense – that we will be bound by sin, and not be able to live with our Father in Heaven. However, this verse describes the destruction as both temporal and spiritual. What would temporal destruction look like?
Here is the definition of temporal, according to Dictionary.com:
-Of, or relating to time
-Pertaining to or concerned with the present life or this world; worldly:
-Secular, lay, or civil, as opposed to ecclesiastical.
Temporal matters are things of this world. What would it mean to be destroyed temporally? I am sure it means lots of things, but I can’t help to also relate it to our possessions and wealth. What, besides our mortal bodies, could be more ‘worldly’ than these things? When I think of temporal destruction I think of idol worship – worshipping our possessions, coveting bigger and better and more, becoming enslaved in the chains of debt that we can’t seem to break free of.
I often get into conversations with other LDS women about how tough it is to make ends meet sometimes (or all the time!). The conversation usually turns to the conflict of employment – whether we should be working, and providing income, which usually requires finding child care for our children. Sometimes it seems almost impossible, these days, to get by on only one income. I personally see it as one of the ‘signs of the times’ that we are required now to have a dual-income home where both the mother and father and work, just to be able to provide necessities and some niceties for our families. Our culture and even economy has become such that having only one income-earner in the home is increasingly insufficient. (Please understand that I am not saying that women should not be working, and that mothers should not have jobs. This is such a personal, and individual choice and I don’t begin to claim that one choice is right for everyone. My point is that the option is becoming rare, should a man or woman WANT to stay home, while the other spouse works and that the decision is often a forced decision that both HAVE to work, regardless of their preference). Could this be a form of temporal bondage and destruction, taking away the ability to choose to have a one-income family and have one parent home with the children?
Becoming more knowledgeable about personal finance (how to budget, living frugally, simplifying, paying tithing, having correct insurance, paying off and avoiding debt, etc.) will help us avoid the destruction that can happen so quickly when we are not good stewards of our resources. This also adds a new level understanding to our Heavenly Father’s law of tithing. (Future post on tithing, up and coming!)
By separating the seemingly temporal from the spiritual we can easily justify our actions and make choices that may not align with our beliefs. By understanding the spiritual connection to our temporal abundance, we will be better able to act with integrity with the things we have been given, and be better stewards over our blessings and resources.
My three year old saw a picture of a woman in one of my hair style magazines that I was looking through (to find a cute style for my upcoming hair cut appointment). One of the young women in the magazine looked a lot like her preschool teacher. She excitedly exclaimed that she found her preschool teacher in my magazine! The lady in the magazine, I am guessing was in her early 20’s, and my daughter’s preschool teacher is, I’m guessing, in her early 40’s. I took a picture of the picture in my magazine and sent it to the preschool teacher and let her know that my daughter said it was her. The preschool teacher was so thrilled. She said “These littles think you’re beautiful no matter what! Made my day.”
That made me think about how much I love my mom. I don’t love her more if she’s thin, or less if she’s put on weight. I don’t admire her less if she doesn’t have make up on. I don’t think she is even more incredible if she has cute shoes. I love my mom because she is my mom. I don’t care or notice what she’s wearing, or how cute her hair is that day. I already know that she is amazing and incredible and I love her.
This train of thought brought me to today. This morning, I walked into the room where my 8-month-old was playing. She looked up and saw me and the biggest smile spread across her face. The kind of smile that makes her eyes twinkle and her nose scrunch up. She loves me. She loves me if I’m in my work out clothes, crazy hair, and red-faced and sweaty-stinky from a work out. She loves me in the middle of the night when I check on her, with groggy eyes and hair sticking out everywhere. She loves me when I’m all dressed up for church. She loves me when we are hanging out in our pajamas. She doesn’t care. She loves me because I am me.
My fourth baby was born when I was 34. I noticed a huge difference in my recovery this time around than when my first was born when I was 26. Things happened a bit slower, including the weight loss, and getting back to ‘normal.’ In fact, I’m not quite there yet, despite my best efforts over the last 8 months. When I start to get down on myself, and compare myself to others and wish I was thinner, prettier, more athletic, had more stylish hair or clothes, etc., etc., I remember that cute baby face smiling at me when I walk into the room. I remember how excited she gets when I pick her up – her legs kick and she wiggles, and snuggles into my neck. I remember all the cute letters my kids write for me about how much they love me because I ‘make good dinners’ or I ‘help them clean their rooms’ or I ‘play games’ with them. They don’t say they love me because I’m pretty. They don’t say I’m the best mom because I know how to do awesome eye makeup. They tell me they love me because I’m ‘the best mom ever.’ They love me because I love them.
I also think of my friends. The dear, good friends who have loved me through so much, who love me because they know who I am deep down. The friends that I can have over even when my house looks like a tornado has come through, I haven’t washed my hair, I have circles under my eyes, and the kids are grumpy. These friends know who I am and they love me. We always laugh together, reminisce and leave feeling uplifted and loved.
I think of my husband who has seen me at my very worst, and my very best. He loves me when I’m grumpy, he loves me when I’m nice. He notices when I make the effort to look nice, but will still be seen with my in public when I’m not looking so nice. He loves me because he serves me and he knows who I am on the inside, not the outside.
When the world starts to get to me, and I begin to think I am not enough, and that I don’t measure up, I remember the people who love ME. My parents, my children, my husband, my dear friends. And I remember the people that I love. Those are the people I want to impress. Not impress them with beauty or style or perfection, but with kindness, and love and fun and smiles. It’s easy to get down sometimes, especially when we compare (must stop doing that!), but when I think about who and what matters most, suddenly all of the vain ideas coming from the outside seem silly and unimportant. Because they are. We are children of God, and He loves us above all.
Another story came to mind that a friend told me recently. My friend was at the playground at the same time as another mother. This mother was quite plain, her clothing was not stylish, and her hair was pulled back into a quick ponytail. But the feeling she left after their conversation was beautiful. My friend walked away feeling uplifted and happy. She said that the woman became truly beautiful, because of the way she made my friend feel. That is true beauty.
I want to be beautiful like that.
Change is hard. Changing our habits is even harder. Change takes effort, energy (both mental and physical) and often requires a lot of courage. I believe that making financial changes may be some of the hardest changes to make (similar to changing our eating or exercise habits!)
Henry Cloud said “We change our behavior when the pain of staying the same becomes greater than the pain of changing.” I repeat this quote to myself daily, sometimes several times a day as I remember why I am making the changes. In my previous post I talked about pain – enduring small pain now to avoid greater pain in the future. This often involves change.
Things needed to change
My change happened when the pain of staying the same was much more than the pain of changing. We were in over our heads. We had credit card debt, student loan debt, car loan debt, a mortgage, and just couldn’t pay everyone what they demanded. Our grocery budget was tight, there was no money left to spare. I will always remember the day: I had just done a load of laundry and was hanging my bath towel back in the bathroom after being washed. I looked at the towel. It was once a white towel. Now it was off-colored and stained and the edges were worn. And I could not afford to go and buy myself a new towel! I had two little girls to feed and started to panic. I couldn’t even buy myself a new bath towel. We were one paycheck away from disaster if a lay off happened, or a disability, or even a repair as minor as a broken dishwasher or flat tire on the car. I vowed then and there to change! I wanted to be in a better situation for myself, but even more so, for my children.
This is when the pain of staying the same overwhelmed me and I longed for change. I don’t believe change will happen until we become “sick and tired of being sick and tired” (phrase borrowed from financial guru, Dave Ramsey). It has to be an intrinsic desire for change. No one can make us change. Not real, lasting, life-altering change. This has to come from the inside, from a purpose and a reason and a drive to make the change(s). We’ve all heard the quote “If you always do what you’ve always done, you’ll always get what you’ve always got.” (attributed to a few different people).
I knew that if we kept doing what we were doing, we weren’t going to get where we wanted to be. That was the day I decided to change.
After feeling the strong desire to change, how do we do it? Jacob Lund Fisker, in his book ‘Early Retirement Extreme’ says it most perfectly: “Dissatisfaction may be high and the vision of an alternative may be high as well, but without a plan, this can only lead to frustration. There must be a strategy or at least a plan, and it must be practical. To get things done, it’s much better to have a plan than to have passion, at least insofar as you act on it.”
He tells us that those wanting to change have four variables to consider:
- Dissatisfaction with your present situation.
- Strengthen your vision of your future situation.
- Build a plan to get from the present to the future.
- Lower the perceived cost of the plan.
In the next few posts we will talk about number 1 – Dissatisfaction with your present situation. We will learn about the time value of money, compound interest, what your debt is really costing you, as well as what the cost of delaying savings is.
Think about your financial situation. Are you happy with where you are? Do you have a plan to improve your situation? Do you know what your situation is? (if not, read my post about calculating your net worth first). How would you like your financial situation to be? What do you want to change? What are your beliefs about your ability to change?
Read Sister Wendy Watson Nelson’s Devotional address about change, which goes far beyond finances: https://speeches.byu.edu/talks/wendy-l-watson_change-always-possibility/
Should we avoid pain?
It was time for my baby’s six month check up appointment and routine vaccinations. Two of my older girls got to come along to the appointment as well. When it was time for shots, my older girls became concerned and asked me why the baby had to get shots. They love their baby sister and get upset if she ever cries or is in pain. They didn’t want her to get hurt by the shots. I explained to them that the vaccines will help prevent some very serious diseases that can be very painful, and very scary and life threatening. A little bit of pain now to prevent a lot of pain later.
This made me think about personal finance. We need to be willing to go through a little bit of pain now, to avoid big pain later. For example, living on a tighter budget, avoiding debt, driving the old car another year or two, doing a staycation instead of going to Hawaii, resisting the urge to pull that credit card out or apply for that loan, or spending the money that is supposed to go to savings. These choices we make now will prevent a future of more painful consequences like being overextended, house poor, foreclosure or even bankruptcy, or having no buffer or emergency fund or savings when an emergency occurs. By being a bit uncomfortable now, we will reap the rewards in the future. That may be the distant future, or maybe a future that isn’t so far.
Small discomfort now vs. big discomfort later
Being able to learn self-discipline, when it comes to personal finance, is a valuable skill to learn early in life. I like to give my kids an allowance, to allow them to make money choices when they are young, when the consequences are small. Then, when the big choices come, and the big temptations are available, hopefully they can remember lessons learned in their past, and make better decisions.
One example of this scenario is student loans. Student loans are very easy to get, very easy to justify (it’s for education and education is a good thing!), quickly add up and then become difficult to pay off. What took a few months or short years to acquire can take a lifetime to pay off. However, choosing the smaller discomfort now of working while attending school, applying for grants and scholarships, attending a less expensive school or community college, will help you avoid the much greater discomfort later of paying back those large student loans, laden with interest!
Naturally, we move away from things that are uncomfortable and gravitate to things that seem desirable. No doubt that is one of the reasons why credit cards have become so popular. It is uncomfortable to say no to something that we really want. It is pleasurable to indulge right now and not have to wait for the things you think you want. However, avoiding the small prick of pain now (waiting until you have the money to pay for the purchase), can set you up for much greater future pain (large credit card balance and payments, and enormous amounts of interest, for example).
Love yourself enough to allow discomfort
As I tried to explain to my kids, the shots do hurt right now, but that they will spare their baby sister much more pain later, they began to understand. And, because I love her, I will allow her to go through this small pain now, to be sure that her future is much less painful.
I realized that I need to love my future self enough to endure some small ‘pain’ now which will help me avoid much greater pain in the future.
It’s better to want than to owe!
There is a phrase I like to tell myself every time there is something that I want, but can’t pay for (and I’m tempted to pull the credit card out). It comes from a blog post by Natalie Bacon, on her blog, The Finance Girl. She said “It’s better to want than to owe.” (Her great blog post can be found here: http://www.thefinancegirl.com/how-to-create-financial-margin/)
Indeed! I have been on both sides of the want or owe coin. It really is better to want than to owe. Wanting is much less painful than owing!
Take a look at your financial habits. Is there anything you are doing now that is helping you avoid ‘pain’ or discomfort now, but that will cause future discomfort? What can you do to change these habits? Pick ONE to work on. Decide how you can change the behavior now to have a better outcome in the future. (For example, pack a lunch to work one extra day a week, and put the money you would have spent on lunch into a savings account, or towards a debt, instead).
The Struggle is Real
Don’t you love taking kids to the grocery store with you? Or any store, for that matter? my family will go without needed grocery items just because don’t have the energy or desire to drag kids through the store and tell them no to the Oreos and the cookies and the Trix Yogurt, etc., etc. But, as I was thinking about them and their endless desires for treats and toys, I realized that they didn’t understand why I had to tell them no so often, and why we can’t just buy everything we see and desire.
So, during family council one Sunday I pulled out the Monopoly money, and counted out a pile of ‘cash’ to show the kids how much money daddy gets paid every month. Their eyes grew wide and they exclaimed that that is SO much money and that we are rich (anything more than $50 = great wealth!). Then, we talked about our monthly expenses. My intent was to show them that we have a limited amount of income, and that it needs to be spent wisely so that we can pay for our obligations, be able to buy food and necessities, and have a little fun, too.
A side benefit of doing this exercise was that they learned a bit about our resources. They had no idea we had to pay for the electricity or water that we use. They had no idea that groceries cost so much. They had never heard of car insurance, and didn’t know much about health insurance. We also got to have a simple, but effective, discussion about debt. About what it is, what it does, why we don’t want it and how we are trying to get rid of it. This also led to a brief chat about taking care of our stuff, and also about how we are so blessed to have so much, when others have so little.
Since we did this little exercise, I have not been asked to buy anything extra at the store. Once in a while, they will ask “Is this on the list?” If the answer is No, they ask if we can put it on the shopping list for next trip and I usually try to find a way to say yes and work it in the budget (we’re talking small items like little treats or a bag of cookies. )
They also began to see how quickly ‘all of that money’ was used, and what little was left over. This helped me explain why daddy had to go to work everyday and how thankful we are for him and his hard work and willingness to do it for us. This also helped them understand why mommy does her ‘typing work’ (transcription) to help us earn a little extra to help the debt be paid off more quickly.
I didn’t realize how valuable this little lesson would be and the things we would learn together. I also didn’t understand how much they didn’t understand. I realized that they didn’t understand why I chose to tell them no so often, and why I would get frustrated with all the asking. Visually showing them the cash inflows and outflows has helped them gain an understanding and helped me gain new patience and willingness to do more teaching instead of reprimanding.
This simple exercise helped my kids see how we can work together to support each other (taking care of the things we have, not whining when Mommy or Daddy says no, telling Daddy thank you for working so hard for us, being grateful for all of our blessings….). Maybe it will work at your house, too!
Sit down with your kids and discuss your budget. Do it in a positive and educational way. Share your financial goals. Maybe pull out the Monopoly money and show them the budget works. Help them to see how they can contribute to the ‘family economy’ by showing gratitude, serving each other, being patient, etc. Then, share in the comments how the discussion went!
I love to read. My dream vacation would be somewhere warm and quiet where I could read all day long and drink Root Beer.
The books I love to read are mostly self-help, personal enrichment and personal finance books. Some are fantastic. Some are duds and a total waste of time. And some of them fall somewhere in the middle. I hope, by sharing book reviews, you will be able to read books that are uplifting, informative, inspirational, and aligned with gospel teachings. So you won’t have to waste your time reading the ‘not-so-great’ ones.
I just finished reading “Breaking Busy, How to Find Peace and Purpose in a World of Crazy” by Alli Worthington
This book is a fantastic eye opener to why being busy is not helping us live up to our divine worth, and our personal missions. Alli gives a list of ‘Signs of Capacity Overload’ (lack of self care, chronic lateness, neglecting important relationships and neglecting God, to name a few) and how to address these. She has very helpful lists and thoughts on understanding ourselves and our time better in each chapter. Some examples:
Identify your season of life
Identify your stress points
Identify when you are exceeding capacity
Learning to recharge
Discover your passion
How to overcome negative thoughts
Setting Goals and priorities
Learning to say No
The Five F’s of Decision making
Finding your true worth
Each chapter focuses on a theme, and each chapter concludes with action steps you can take to implement the ideas you just learned throughout that chapter.
It is book written from a Christian perspective, and Alli incorporates faith and giving your life to God, throughout each chapter.
It is an excellent book to help you reevaluate your busyness, learn easy skills to simplify, prioritize, remember your true worth and discover your purpose.
The book is 209 pages with 10 chapters and an Epilogue and is an easy read. Alli writes in a friendly and humorous way, and it is a delightful and inspiring read. I highly recommend.
A few favorite quotes from the book:
“I sometimes think we must be amusing to God, running around trying to do so much, constantly trying to find our rhythm in a world of being overwhelmed, when the reality is, if we’d slow down, do fewer ‘urgent’ things, and ask him about what is important (what our goals in life should be), we might be surprised by what he could accomplish through us.” (page 145)
“Guilt, that sense of conviction that comes over us when we do something wrong, is healthy and moves us toward positive change. Shame, however, drives us into a never-ending cycle of trying to fix ourselves, to prove to the world and ourselves that we are not inherently flawed, that we have value. The lie the Devil wants me to believe, and you to believe, is that we are never going to live beyond the consequences of our actions. It’s a lie he’s been perfecting since the beginning of time.. But I’m here to tell you his lie, the shame he pours into us, serves one purpose: to distract us and keep us busy trying to prove to the world that we are perfect…Keeping us busy trying to prove our worth is the easiest way to keep us from the life God created us to live because it makes us think that our worth is based on what we do, instead of who God is” (pages 196 and 197)
“To me, a busy life is a frazzled, harried, lived at a pace I’m not meant to live, doing things I’m not meant to do. A busy life is a life the Enemy has created in order to keep me from God’s purpose. A full life, on the other hand, is a life lived in step with what God has called me to do.” (page 208)
I highly recommend this book to any woman who feels life is busy and getting out of control. Alli includes God in all of her decisions and inspires the reader to step back and remember what is really important.
The website for this book is: http://breakingbusy.com/
Are there any personal finance books or self-improvement books you would like me to review? Let me know in the comments!
Is debt bad?
Leverage debt, use debt, debt is bad, debt is good, debt is a tool, etc., etc. Some financial gurus tell us “Don’t borrow, debt is bad.” Others tell us to leverage our debt. Some say to pay off our homes. Other say it makes better financial sense to keep the mortgage and use the extra ‘pay-off’ money for investing.
But what do the scriptures say about borrowing?
But, what has the Lord told us about debt?
Many of us are familiar with the scripture in Proverbs 22:7 “The rich ruleth over the poor, and the borrower is servant to the lender.” The first time I heard that scripture it struck me hard, and struck me as truth! Indeed, the one that owes is servant to the lender.
Doctrine and Covenants section 19 verse 35 says “Pay the debt thou hast contracted with the printer. Release thyself from bondage.” This was a revelation given to Martin Harris. Martin Harris had mortgaged his farm lands to enable the Book of Mormon to be printed. “The translation was completed in June 1829. By August, Smith contracted with publisher E. B. Grandin of Palmyra to print the Book of Mormon. Harris mortgaged his farm to Grandin to ensure payment of the printing costs, and he later sold 151 acres of his farm to pay off the mortgage.” (Martin Harris (Latter-Day Saints))
While debt was necessary to print the Book of Mormon, the Lord had provided a way for the debt to be repaid. I know that if we are committed to ridding our lives of debt, the Lord will help us in these efforts!
Deuteronomy 28:12 instructs Israel “thou shalt lend unto many nations, and thou shalt not borrow.” This verse is part of a chapter that explains to Israel that they will be blessed temporally and spiritually if they are obedient. Again in Deut 15:6 the Lord says the same thing, that Israel shall lend to many nations, but not borrow, and then He adds “and thou shalt reign over many nations, but they shall not reign over thee.”
Elder Joseph B. Wirthlin counseled, “Remember this: debt is a form of bondage. It is a financial termite. When we make purchases on credit, they give us only an illusion of prosperity. We think we own things, but the reality is, our things own us. Some debt—such as for a modest home, expenses for education, perhaps for a needed first car—may be necessary. But never should we enter into financial bondage through consumer debt without carefully weighing the costs.”
President Heber J. Grant said, “From my earliest recollections, from the days of Brigham Young until now, I have listened to men standing at the pulpit…urging the people not to run into debt; and I believe that the great majority of all our troubles today is caused through the failure to carry out that counsel.”
One of my favorite quotes about debt was given by J. Reuben Clark, Jr.:
“It is a rule…in all the world that interest is to be paid on borrowed money. May I say something about interest? Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels…it has no love, no sympathy; it is as hard and soulless as a granite cliff. 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 nor orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.”
I will never forget a statement a friend made to me years ago. She said “Borrowing money is like telling my Heavenly Father that I am not grateful for what he has already given me.” How this spoke right to my heart!
This statement became my new ‘mantra’ for getting out of debt and not incurring more, at least not without prayerful consideration.
Each morning when I wake up I am grateful for a new day and new chances. I am grateful for healthy kids, a kind, hard-working husband, a family who loves me and friends who never give up on me. I am grateful for my freedoms and my opportunities and my choices, my education and my comfort. I am grateful for clothes to wear, food to eat, a vehicle to transport my family where we need to go. I am grateful to be able to worship how I choose, and to live in a place of peace and safety. I am grateful for the opportunity to repent and change. I am grateful for the enabling power of the Savior and my knowledge of Him and for His love.
How can I tell my Heavenly Father that I am not grateful for all that I have and that I want more, and that I am not willing to be patient and submissive?
Admittedly there are times when we will, more than likely, need to borrow money. These times include a home, possibly a car, and maybe education (although be very, very cautious when considering student loans!). But gratitude for our blessings will help us remember where all that we have comes from.
Assignment for today:
1-Start a gratitude journal. Every day list at least three things you are grateful for.
2-Make a list of all of your debts, lowest balance to highest, their interest rates and the monthly payments on these debts.
3-Subscribe to this blog!
Have any of you read the book, “The Entitlement Trap?” In this book, Linda and Richard Eyre discuss a system they implemented in their family in order to help their children learn about responsibility and financial management.
I have been wanting to try the system out at our house, but my kids have been too young. However, I think it may be a good time to start very soon….
Here is a great blog post about the system:
Have any of you tried this system? Has it been helpful? Let me know, in the comments!