Post # 91 – Personal Finances for Self-Reliance 5

Lesson # 5 Sticking to a Budget

Dear Family and Friends

Well, I am back with this post on Lesson # 5 if our personal finances for self-reliance group. Last week and this week have been very informative for me. Some things I already knew, but things have evolved so much over the years and there are better ways to begin and to maintain your personal finances. These lessons are one in the Lord’s way and not the ways of man.

I will be the first to tell you that if I had to make a choice of whose advice I was going to follow – either the advice from men or advice from the Lord – I will choose the Lord every time! I say this because I know that I can do all things through Christ who strengthens me. I know that I cannot manage my mortal probation without the Lord’s counsel and guidance!!!

LAST WEEK’S COMMITMENTS WE WERE ASKED TO: Ⓐ Practice and share last week’s My Foundation principle---Live a Balanced Life. Ⓑ Create a budget--- (Financial Principles and Skills from last week’s lesson: 1. Build a Budget; 2 Balance a Budget). Ⓒ Hold a family council and discuss our budget. Ⓓ Contact and support my action partner.

FOR THIS WEEK WE WILL BE DISCUSING AND LEARNING ABOUT THE FOLLOWING:

MY FOUNDATION PRINCIPLE ○   Solve     Problems

FINANCIAL PRINCIPLES AND SKILLS

1. Set Realistic, Motivating Financial Goals
2. Find and Use a Budgeting System
3. Hold Yourself Accountable
4. Seek the Lord’s Help, and Keep Trying    

And the Questions begin: What challenges did you have with keeping your commitments this week? My biggest challenge was trying to figure out how to use the app that I chose to use for my budgeting system☹And of course, remembering to contact my action partner😊

These are the things I learned from striving to keep my commitments during the week --- I learned that there are so many ways that you can create a budget and so many apps as well. I learned that I need some help to figure out how to use the app that I chose to use for mu budgeting😊

We were asked to ponder and answer these questions about our last week’s commitments:

○ What experiences did you have practicing or sharing the My Foundation principle? (Live a Balanced Life) I discovered that my life is not as balanced as I had thought it was😊 So I have my work cut out for me!

○ What did you learn while creating a budget? It has helped me to remember and refocus on some really important things that I had forgotten about finances.

○ How did your family council help as you created the budget? I pretty much did this on my own. My kids have their own budgeting system. I have always used paper and pencil method, but I did check on some budgeting apps for my phone.

Challenge question: Why does Heavenly Father allow us to face problems and challenges? So that we can learn and grow from each of the problems and challenges that we face. He wants to see if we will rely on Him and ask Him for His help to make it through each one of those problems and challenges. This is one thing that I have learned through my experiences thus far in my life is that it is so important that we learn to rely on His help to get through each trial, problem, and/or challenge that arises in our lives.

Then we watched a video: “A Bigger Truck?” available at srs.lds.org/videos. I found the video here: www.lds.org/media-library/video/2014-06-1600-a-bigger-truck?lang=eng&category=principle-6-solve-problems

I have included the transcript to the video in case you are like me and want to follow along or reread it later on: A BIGGER TRUCK?

ELDER DALLIN H. OAKS: Two men formed a partnership. They built a small shed beside a busy road. They obtained a truck and drove it to a farmer’s field, where they purchased a truckload of melons for a dollar a melon. They drove the loaded truck to their shed by the road, where they sold their melons for a dollar a melon.

They drove back to the farmer’s field and bought another truckload of melons for a dollar a melon. Transporting them to the roadside, they again sold them for a dollar a melon. As they drove back toward the farmer’s field to get another load, one partner said to the other, “We’re not making much money on this business, are we?” “No, we’re not,” his partner replied. “Do you think we need a bigger truck?” (“Focus and Priorities,“ Ensign, May 2001, 82)

Now that you have seen the video it’s time to answer these questions: What is the real problem in this story? What are some options for the two men? Now that you have finished with the video and answered the questions it’s time to move on to our readings: Doctrine and Covenants 9:7–9 and the quote by Elder Robert D. Hales

SOLVE  PROBLEMS

“Behold, you have not understood; you have supposed that I would give it unto you, when you took no thought save it was to ask me.

“But, behold, I say unto you, that you must study it out in your mind; then you must ask me if it be right, and if it is right I will cause that your bosom shall burn within you; therefore, you shall feel that it is right.

“But if it be not right you shall have no such feelings, but you shall have a stupor of thought that shall cause you to forget the thing which is wrong.” DOCTRINE AND COVENANTS 9:7–9

“The Lord expects us to help solve our own problems. . . . We are thinking, reasoning, human beings. We have the ability to identify our needs, to plan, to set goals, and to solve our problems.” ROBERT D. HALES, “Every Good Gift,” New Era, Aug. 1983, 8, 9

This was an activity that we did in our group I have included it just in case you would like to complete it as well:

 Step 1: Choose a partner and read the steps below.

Step 2: Choose a problem you are facing and write it below. 

Step 3: Apply each step to your problem.

• Identify: 
• Study options:
• Decide and act:  

IDENTIFY What is the real problem?

DECIDE AND ACT Pray for guidance. Decide. Then act with faith. Good results? If not, try steps 1–3 again. Don’t give up!

STUDY OPTIONS What are possible solutions? Which one is best?

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 We were then asked to read: 1 Nephi 17:51 and 1 Nephi 18:2–3

“And now, if the Lord has such great power, and has wrought so many miracles among the children of men, how is it that he cannot instruct me, that I should build a ship?” 1 NEPHI 17:51

“Now I, Nephi, did not work the timbers after the manner which was learned by men, neither did I build the ship after the manner of men; but I did build it after the manner which the Lord had shown unto me; wherefore, it was not after the manner of men.

“And I, Nephi, did go into the mount oft, and I did pray oft unto the Lord; wherefore the Lord showed unto me great things.” 1 NEPHI 18:2–3

 From these scriptures we can answer this question: How was Nephi able to build a ship? Through his faith and trust in the Lord and his strict obedience to the promptings from the Holy Ghost

These are the things that we were asked to commit to do during this coming week:

□   Act on the steps you discussed in the activity to begin solving your problem.

      Remember, don’t give up. It takes time to solve problems and make changes.

□   Share what you’ve learned today about solving problems with your family or friends.

Last week we were asked as one our commitments to find a budgeting system. Do we have our budget ready? Is it done??: Congratulations on building a budget! A budget can be a powerful tool for controlling your financial situation and reducing stress in your life. In the scriptures, we learn that “truth is knowledge of things as they are, and as they were, and as they are to come” (D&C 93:24).

 This question focusses on Doctrine and Covenants 93:24: How might this verse from the Doctrine and Covenants apply to your finances and the use of a budget?

 Here comes further counsel for us on our financial stewardship:  Knowing where your family finances really stand is essential for successful financial stewardship. Elder Joseph B. Wirthlin taught, “Those who live safely within their means know how much money comes in each month, and even though it is difficult, they discipline themselves to spend less than that amount” (“Earthly Debts, Heavenly Debts,” Ensign or Liahona, May 2004, 42). Sticking to a budget can be difficult. It requires commitment, discipline, and perseverance—it may take several tries to get it right! As you strive to change your spending behaviors, remember to counsel with the Lord and your spouse or an accountability partner. With sustained effort and loving support, you can become more like the children who waited in the marshmallow experiment (discussed in the previous chapter).

In a nut shell today we will discuss four principles for sticking with a budget:

1. Set realistic, motivating financial goals.

2. Find and use a budgeting system.

3. Hold yourself accountable.

4. Seek the Lord’s help, and keep trying!

1. SET REALISTIC, MOTIVATING FINANCIAL GOALS

 Read: Goal setting is a powerful tool that helps us develop and maintain a long-term perspective. Elder M. Russell Ballard taught, “Let me tell you something about goal setting. I am so thoroughly convinced that if we don’t set goals in our life and learn how to master the technique of living to reach our goals, we can reach a ripe old age and look back on our life only to see that we reached but a small part of our full potential. When one learns to master the principle of setting a goal, he will then be able to make a great difference in the results he attains in this life” (“Do Things That Make a Difference,” Ensign, June 1983, 69–70).

 Before you can go on, you must ponder and answer these questions:

○ How have goals helped you progress in the past?

○ How is goal setting an act of faith?

 This gives us counsel and lets us know what other things we will be covering in our group it comes directly from the manual for our group: It is important to set financial goals that are both realistic and motivating. Throughout the next few chapters, we will learn about many financial goals and priorities, including building a one-month emergency fund, getting out of debt, building a longer-term emergency fund, investing for retirement, and saving for other worthy expenses. The following activity will help you identify which of these should be your current financial priority.

 This is such an important question for each of us to ponder on and seriously answer truthfully: How can the Lord help us develop Christlike attributes, including self-discipline and diligence?

This counsel is right from our group manual: You can choose to work toward other long-term goals in addition to your current financial priority, which may include saving for education, a mission, a car, a home, or a family vacation or other recreational expenses. There will be many temptations to choose the short-term perspective over the long-term perspective. Goals can give you a reason to say no now by giving you something to look forward to in the future.

this is something important that each of us individually need to ponder and pray about and answer: What motivates you personally to want to stick with your budget?

Answer the questions below by yourself. The first question to which you answer “no” represents what your current financial priority should be.

WHAT IS MY CURRENT FINANCIAL PRIORITY? YES NO

1. Do I pay tithing? (See chapter 2.)

2. Do I have a one-month emergency fund? (See chapter 6.)

3. Do I have health insurance or some other access to medical care?

4. Am I free from consumer debt, like credit cards and car loans? (See chapter 7.)

5. Do I have a three- to six-month emergency fund? (See chapter 9.) □ □

6. Am I contributing to a retirement savings fund? (See chapter 11.) □ □

7. Am I working to eliminate mortgage and education loans? (See chapter 10.)

Write your current priority:       

                                                                                                

2. FIND AND USE A BUDGETING SYSTEM

 We read this counsel directly form the group manual: There are many tools and systems available to help you manage your budget and track your expenses. Effective budgeting systems range from simple pen-and-paper systems to mobile and computer applications. There are two primary ways to pay for goods and services: cash or electronic payments. Each of these general methods has positives and negatives and will affect the way you manage your budget and track your expenses. In the next few sections, we will go over two common budgeting systems. One of your commitments this week will be to find the right system for you.

We watched a video about one of two budgeting systems we covered in our group. This comes right from this manual: “The Envelope System,” available at srs.lds.org/videos. I found the video here: https://www.lds.org/media-library/video/2016-12-018-the-envelope-system?lang=eng

THE ENVELOPE SYSTEM The cash envelope system is simple: immediately after being paid, you place the amount of money you have allotted to spend in each budget category into its own envelope. For example, let’s say you have budgeted 400 for the “groceries” category this month. When you receive your pay for the month or for the next few weeks, deposit that amount (in cash) into an envelope labeled “Groceries.” No money—and this means no money— comes out of that envelope except to pay for food. If you go to the market and find you’ve left the envelope at home, go home and get the envelope!

Keep a written record (in a simple notebook) of all expenses, so that you can later review it during your family council to remind you where your money is going. In another envelope, place the budgeted amount for your transportation expenses. You will take from this second envelope when appropriate the portion needed for those costs and track each expense in your notebook. Divide each of your budget categories in this same way: rent or mortgage payment in one envelope; utilities in another; tithing and fast offerings in another; medical; insurance; and so on—each in its own envelope.

Each time you get paid, deposit the appropriate portion of your monthly budgeted amount into each envelope so that the total amount placed in each envelope each month is the amount predetermined in your written budget. Do not spend more than you have budgeted. When the envelope is empty, you are done! If you must spend more in that category, you will have to take it out of another envelope. For the first few months this will require adjustments. Within that period you should gain a more accurate picture of whether your initial budgeted numbers are adequate—you’ll learn the real average over a couple of months.

Some use the envelope system for everything. Others use this cash-only system for those categories that tend to tempt them to overspend, or for which it is easy to lose track or lose control, like food, restaurants, entertainment, gasoline, and clothing. Any leftover should go toward your financial priority.

The next thing that we did was we watched: “Digital Systems,” available at srs.lds.org/videos.  I found the video here: https://www.lds.org/media-library/video/2016-12-019-digital-systems?lang=eng

DIGITAL SYSTEMS If seeing extra cash tempts you to spend more than you otherwise would, then using a debit card may be your best option. As with the cash-envelope method, a debit card draws from money already in your bank account. When using a debit card, it is critical to track your expenses because, unlike the cash envelope system, a debit card does not provide hard boundaries between budget categories. You can record your expenses with a pen and paper or with a mobile phone or computer application. Numerous financial management apps are available for cell phones or other mobile devices. These apps can store and organize information for you, and you can then access it from your home computer or other devices, as well. Spend some time this week researching the best apps available in your language and region, using “money management,” “personal finance tools,” or “budgeting apps” as search terms. Many very good ones are free or cost very little. Remember, to keep your information secure, access your personal financial information only from your own devices, not from public computers

Here is another activity that we did in our group. I thought I would share it with each one of you to do as well.

Step 1: Divide into small groups of two to four people.

Step 2: As small groups, read from the chart below the positives and negatives associated with each budgeting system.

Step 3: Discuss additional positives and negatives you think of and write them in the following chart. Step 4: Come back together as a full group. Invite a member from each small group to share his or her additional positives and negatives with the whole group.

COMPARING BUDGET MANAGEMENT SYSTEMS

SYSTEM	PROS	CONS
CASH  ENVELOPE	Clear boundaries: you know when you have run out of budgeted money	Very manual process: need to organize your cash after every pay period; need to keep manual records
DIGITAL SYSTEMS	Real-time information about your budget	Can be easy for some people to ignore or forget to record or review expenses

Great words of caution for each of us as we are developing and trying to stick with our chosen budget: With any method, be sure that you: ○ Don’t cheat by changing your established amount or borrow from other categories. Counsel with your spouse or accountability partner if adjustment is needed. ○ Track all expenses closely and adjust your budget categories next month as necessary.

3. HOLD YOURSELF ACCOUNTABLE

 We are receiving more counsel here: You can only succeed in sticking to a budget by holding yourself accountable. Your weekly family council can serve as a way to review your goals and budget and to make adjustments if necessary. If you have a difficult time holding yourself accountable, it may be wise to report your progress to someone else—a friend, action partner, mentor, or financial adviser. The important thing is that you make time to consistently evaluate your progress and that you make changes as needed.

 Here are the questions for this section for you all to ponder and answer: Why is it important to hold yourself accountable? How will you hold yourself accountable to your budget?

4. SEEK THE LORD’S HELP AND KEEP TRYING

 This reminder comes directly from our group manual: Remember that faithful financial stewardship may require you to change your perspective, habits, and behaviors. Faith in Jesus Christ and His Atonement will help you to undergo this transformation. Because these changes may uproot deep habits, and because budgeting is a learning process, you may fail at times to stick to your budget. Additionally, you may slip up and make impulsive purchases or encounter financial crises like job loss, medical emergencies, or unforeseen maintenance costs.

You will learn about building an emergency fund and handling financial crises in later chapters, but for now it is important to remember that a budget is adaptable and that sticking to a budget requires perseverance. When you encounter setbacks to your budget, discuss them in your family council, and review areas of your budget that may need adjusting. While you may feel discouraged and inclined to give up on sticking to a budget, remember that you can keep trying, and by counseling with the Lord and seeking His help, you will gain the power and ability to persist in your efforts.

I believe that building a budget is not just a onetime thing. I believe that it is an ongoing ever-changing, maybe even a sort of living thing that grows and evolves as you learn and grow in your knowledge of finances, budgeting and so forth, also as your family dynamics change😊

 Now here’s a very important question for you to ponder and answer truthfully: What will you do when you face setbacks to your budget? The first thing that always comes to my mind is to pray. I have learned that it is better to prepare for the worst situation then you will be pleasantly surprised when it is not as bad as it could be😊

DISCUSS STICKING TO A BUDGET IN YOUR FAMILY COUNCIL

 This counsel came directly from the manual for our group: Sticking to a budget requires unity with your spouse and with your family. This week discuss possible budgeting systems you can use and ways in which you can adjust your budget should you encounter challenges. Additionally, discuss your current financial priority and other long-term goals and your plans for achieving them. You may want to use the “Sample Family Council Discussion” outline below. Remember, if you are not married, your family council might include a roommate, friend, family member, or mentor.

SAMPLE FAMILY COUNCIL DISCUSSION Be sure to begin and end with a prayer to invite the Spirit.

Part 1: Review

○ What can you do to improve your budget?

○ What is your current financial priority?

 Part 2: Plan

○ What are your financial priorities and long-term goals?

 ○ What budgeting system will you use to keep a budget and track expenses?

○ How will you stick to your budget, and what will you do if you go over budget?

TAKE NO MONEY OUT THE DOOR

My wife and I realized that for some reason we always spent more on silly things toward the end of the month; perhaps as a psychological reward or something. So, we made it our rule to take no money out the door the last five days of the month. We call it our ‘TANOMOD week,’ and it has both saved us money and helped us better plan the rest of the month.

Individually think about what you have learned today and consider what the Lord would have you do. Read the scripture or quote below and write responses to the questions.

“For which of you, intending to build a tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it?” (Luke 14:28).

What are the most meaningful things I learned today?   

What will I do as a result of what I learned today?

MY COMMITMENTS for This Week

Ⓐ I will practice and share this week’s My Foundation principle--- Solve Problems

Ⓑ I will choose a budgeting system.

Ⓒ I will discuss sticking to a budget in my family council.

Ⓓ I will contact and support my action partner.

So, for today’s lesson we need to solve problems – which is our My Foundation Principle for this week. Then we need to set realistic and motivating financial goals; we are to find and use a budgeting system and last but not least we are to hold ourselves accountable😊and most important we are to seek the Lord’s help, and to keep trying!!!

I found this article on Budgeting Basics that I wanted to share with all of you, because they discovered some really good ideas through their learning process:

Budgeting Basics

As we set up our budget, one of our challenges was determining a figure for each item on our spreadsheet. This was because we each had differing views on how our income should be spent or saved. Budgeting required open and honest communication with one another to work out our differences. We quickly discovered that each of us had to stay within the parameters we had set or the budget was useless. Initially this seemed confining, but once we committed ourselves fully, we began to feel some of the freedom budgeting brings, including peace of mind. Budgeting helped us gain control over our money, eliminate impulse buying, and put aside money for future needs.

As part of our budget, we set up two savings accounts: our long-term and our short-term savings. Our long-term savings account consists of future reserves. Currently our goal is to have a six-month supply of money in the bank and to consistently save money for our children’s missions, education, and marriages.

Our short-term savings account is divided into such categories as insurance, taxes, car maintenance, home improvements, gifts and Christmas, clothing, and food storage. We budget a specific amount each pay period for each category, allowing the balances to build up over time. Then when we need money for one of those expenses, it is already there. Another benefit that comes from having the money set aside is that we can buy items such as gifts, clothing, and food storage when they are on sale without compromising our budget or turning to credit cards.

Our short-term savings plan also enables us to save for large purchases. Saving for these purchases assists us to buy without going into debt and incurring large interest charges.

My husband and I frequently feel the guidance of the Spirit in planning our budget and in working through our financial challenges. Besides being a vehicle to help us manage our money, budgeting together has strengthened our marriage and opened the door to many other unforeseen blessings.—Janice Stringham LeFevre, Kaysville, Utah

I found this article I thought I would share with all of you: Budgeting Will Get You Where You Need to Be, you can find it here: https://www.lds.org/self-reliance/budgeting-will-get-you-where-you-need-to-be?lang=eng

There is another section on budgeting called: Secrets of Managing Personal Finance, you can read it here: https://www.lds.org/self-reliance/secrets-of-managing-personal-finances?lang=eng here is a quote from this article: “To stick to a budget, sometimes you have to trick yourself into changing your own behavior.”

Well, my Dear Family and Friends we are at the end of this post. I hope and pray that each one of you have learned something from our visit today. Even though things may be familiar if we keep an open mind, we will probably learn something new😊 I hope that you are doing much better with your budgeting system than I am, as I am still struggling with mine☹

As always it is my prayer that each one of you will be blessed in your daily lives with all that you are in need of. That you will trust the Lord with your finances and follow the counsel that He has given us through these lessons. I believe that we can not go wrong if we are following the Lord’s plan for our lives and following His counsel through His living prophets and apostles. So, until my next post – please make it a great week!