Post # 118 – Personal Finances for Self-Reliance Week 10

Dear Family and Friends

This post takes us back to the weekly self-reliance group that I have been attending. I hope that you have been learning about being more self-reliant through your personal finances as I have😊 And they say you ‘can’t teach an old dog new tricks,’ but I have been learning an awful lot by going to these classes. My mom used to say that “when you stop learning things, you may as well lay down and die because that is why we are here – to learn and grow.”

In this lesson we are leaning about investing for the future – everyone can learn something from this lesson, though I feel that it would be especially beneficial for those just starting out in their adult lives😊 That’s only my thoughts on the subject and I have been known to be wrong on a few occasions or so😊 Seriously though I do believe that everyone can learn something from the information shared in this lesson as well as in the second part which I will be sharing with you in a later post. Let’s get right to the lesson okay?

 

 “10: Investing for the Future (Part 1)” Personal Finances for Self-Reliance (2017), 159–78

My Foundation Principle: Seek Learning: Resolve Where You Are Going and How to Get There

Financial Principles and Skills:

Save Money – I am still saving my fives😊

Consider Home Ownership – My days for owning my own home are long gone I am afraid. I cannot imagine me getting a lone for a home at my age and in consideration of my health, there is no guarantee how long I will be around

Seek Education – I am always taking classes for work, but that is all anymore.

Last Week’s Commitments:

Practice and share last week’s My Foundation principle.

My Foundation Principle: Communicate: Petition and Listen

Financial Principles and Skills

1.      Learn to Manage Financial Crises

2.      Increase Your Emergency Preparations

Continue to put money toward my financial priority. (My emergency fund or my unnecessary debt) – I was able to put a few dollars here.

Discuss my “Budget and Spending Checkpoint” responses and preparing for financial crises during family council.

Budget and Spending Checkpoint

Review and update your budget. What is working well? What categories do you need to adjust, if any? Can you spend less in some categories to more quickly save up for your emergency fund, become debt free, or save for the future?

This is a review of last week’s lesson – the Family Council discussion. You know – the one that I didn’t do very well on😊

Sample Family Council Discussion

Be sure to begin and end with a prayer to invite the Spirit.

Part 1: Review

How are you doing on your budget? (Review answers to the “Budget and Spending Checkpoint” activity.)

How are you doing on your one-month emergency fund?

Are you living life righteously enough to be eligible for God’s help during a crisis? What can you improve?

Part 2: Plan

What financial crises may occur in your family?

How much do you need for a three- to six-month emergency fund? What can you do to save up for it?

What does and does not merit the use of your emergency fund?

What more can you do to be prepared for these crises?

What insurance do you need to obtain to protect your income, health, and belongings?

What can you do to improve or adjust your budget?

Contact and support my action partner. – I dropped the ball this week but my granddaughter is out of town, so I had no one to talk to, probably for another month. I so miss her when she is gone:(

Next we began our evaluation of our last week’s group session and our commitments so to see how we did. We began with the following question posed to our partner and from them to ourselves:

What challenges did you have with keeping your commitments this week?

My partner was out of town for these last two sessions. I had trouble with the family council part of it, but I did talk with them all in an informal setting. I tried to make them aware of the need to prepare ahead for any type of financial crisis.

What things have you learned from striving to keep your commitments during the week.

We had a discussion around these three questions:

1.      What experiences did you have practicing or sharing the My Foundation principle?

2.      How was your discussion about your budget and spending?

3.      What did you decide to do to better prepare for financial crises?

 “My Foundation: Seek Learning,” Personal Finances for Self-Reliance (2017), 162–65

We began this week’s group session by pondering the following question:

How does learning create opportunity?

Next we watched the following video:

“Education for a Better Life,” available at srs.lds.org/videos. I found the video here: https://www.churchofjesuschrist.org/media-library/video/2014-06-2080-education-for-a-better-life?lang=eng

If you are unable to watch the video for some reason, you can read the script below:

Education for a Better Life

Elder Joseph W. Sitati: At 13 I lived in a very rural part of Kenya. People had very little. But those who seemed to afford the things that others admired were those who had a good education. I came to see that education was a key to a better life.

The thought kept coming to me to go and speak to the principal of one of the schools that I really desired to attend. I needed my father’s bicycle to make this journey that took half a day. I had never been out of my village. I did not know how to speak English very well, and this principal was a white man. I had never before met or spoken directly to a white man, so this was an intimidating thought.

Something inside me kept pushing me along and telling me that I should do this, so I set off to visit the principal. As I looked at him I could see that he was quite surprised to see this young boy standing like a soldier in front of him. He had kind eyes, so that gave me courage. I told him that I really wanted to join his school and I would be very happy if he could take me. Then he said, “Well, we’ll see when the test results are out.” I said, “Thank you, sir.” In less than four minutes I was out of the office.

Those four minutes I spent in that office really were the defining moments in my life. I was the only student from my primary school who was selected to one of the best schools in our area. The fact that this good man had given me this opportunity made me grateful, and it inspired me to strive to be the best student in my class.

That opened new opportunities for me to go to another good school and then to prepare for university. My education enabled me to find my wife at university. It enabled me to find a job in the city. While living in Nairobi, we came across a missionary couple that invited us to their home, where they were having meetings with those who are members of the Church. If I had not been in Nairobi at that time, I would never have found the gospel. The fact that I was in a secure job enabled me to serve in the Church.

I testify that education is a key to self-reliance. It will open many avenues for you to be able to provide for yourself temporally and to become spiritually self-reliant as well.

We then had a discussion about the video we had just watched.

What did Elder Joseph W. Sitati want when he was 13? What did he do about it?

We read Doctrine and Covenants 88:118–19 and the quote by President Gordon B. Hinckley

Doctrine and Covenants 88:118–19

“Seek ye diligently and teach one another words of wisdom; yea, seek ye out of the best books words of wisdom; seek learning, even by study and also by faith. … Establish a house … of learning.”

 “We have a responsibility and a challenge to take our places in the world of business, science, government, medicine, education, and every other worthwhile and constructive vocation. We have an obligation to train our hands and minds to excel in the work of the world for the blessing of all mankind.” Gordon B. Hinckley, “A City upon a Hill,” Ensign, July 1990, 5

Our group leader asked us to ponder the following question:

What thoughts and impressions have you had from the Holy Ghost about improving your life?

We did this activity in our group called—Creating a “Life’s Mission”

Step 1: We read the quote by President Henry B. Eyring. The Lord has a plan for you. He has blessed you with special gifts and talents that will allow you to become anything He desires you to become. You can fulfill your mission here on earth if you are diligent in seeking to understand and obey His will for you.

“Plead that the Spirit will show you what the Lord wants you to do. Plan to do it. Promise Him to obey. Act with determination until you have done what He asked. And then pray … to know what you might do next.”

Henry B. Eyring, “Act in All Diligence,” Ensign or Liahona, May 2010, 63

Step 2: We then answered the questions below to start creating our vision or “life’s mission.” You can begin here to create your own “life’s mission.”

My Life’s Mission
Where do I want to be in five years?
Why?
What skills, knowledge, or experience do I need to get there?

Our commitments for this week:

Commit to do the following actions during this week. Check them off when you complete each action.

1.    Complete the following goals and mentor activities.

2.    Finish writing your “life’s mission” plan and discuss it with your family.

3.    Ask someone to be your mentor and set a time to meet.

We did another activity called—Creating Goals, which I wanted to share with you also.

Step 1: We read this quote from President Howard W. Hunter:  Through goals, our hopes are transformed into action.

“This is a gospel of repentance, and we need to be repenting and resolving. Indeed, the process of repenting, making commitments, and setting goals should be a continuous one. … I commend the practice to you.”

Howard W. Hunter, “The Dauntless Spirit of Resolution” (Brigham Young University devotional, Jan. 5, 1992), 2, speeches.byu.edu

Goals should:

Be specific and measurable.

Be written down and placed where you can see them at least daily.

Have set completion times.

Have specific actions to take to accomplish the goal.

Be constantly reviewed, reported, and updated.

Step 2: Our facilitator had each of us take out a separate sheet of paper, he asked us to write down two or three goals that will help you achieve your life’s mission. Follow the example below. He told us to put the paper where we would see it every day.

The next activity we did was called—Finding a Mentor

Step 1: Together we read this quote from Elder Robert D. Hales. There are different kinds of mentors. You may need someone with a lot of experience to answer your questions—someone who has done what you want to do. Other mentors can be righteous friends or family members. These are people willing to spend more time encouraging you to make changes in your life and holding you accountable to progress.

“In my young adult years, I sought counsel from my parents and from faithful, trusted advisers. One was a priesthood leader; another was a teacher who believed in me. … Prayerfully select mentors who have your spiritual well-being at heart.”

Robert D. Hales, “Meeting the Challenges of Today’s World,” Ensign or Liahona, Nov. 2015, 46\\

Step 2: We were told to think about the kind of help you need. Then make a list of some people who could be your mentors. Next we were told to ponder and pray about our list of names.

Step 3: Then we were told to answer the questions below to start a mentor relationship. He said in order to invite someone to be our mentor, we might simply ask, “I’m trying to make a change in my life. Would you be willing to help me?”

My Mentor
Who would you like to be your mentor?
When will you ask him or her to be your mentor?
When could you meet to share your “life’s mission” and goals?
How frequently would you like to meet with your mentor?

Step 4: He told us that we should remember that we are responsible for our “life’s mission.” When we meet with our mentor, we should then:

1.     We should be sure to review our progress with our mentor.

2.    Review the roadblocks to our progress and what we are doing to overcome those roadblocks.

3.    We should then review specifically what we plan to do, before we are to meet with our mentor again.

In our discussion for today we read the following about investing:

When people hear the term investing, they may think of a loud and chaotic trading floor with people selling stocks and bonds. While that may be part of investing, investing is also the act of putting time, effort, or money into something and expecting some type of a return. In this sense, investing is an element of self-reliance.

In this chapter, you will explore three ways to invest:

1.       Save money

2.       Consider home ownership

3.       Seek education

The manual covers each of these in detail. I wanted to share it with you exactly because I feel that this information is so important – especially for those of you who are a lot younger than I am😊

1. Save Money

We were asked to ponder the following question and then we were to write down our thoughts: What would I most like to save up for?

One of the easiest ways to invest is to save money. You have been working to build an emergency fund, starting with one month’s worth of expenses and then building up to having three to six months’ worth of expenses. Imagine the possibilities if you continue to save even after establishing a strong emergency fund.

Elder L. Tom Perry taught, “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” (“Becoming Self-Reliant,” Ensign, Nov. 1991, 66).

As illustrated earlier with the jar example, it is critical to “pay yourself” first by putting money into savings. This will help you build financial security.

Take a minute to review the jar example again. What is most meaningful to you about this example? How are you demonstrating faith by taking the self-reliant approach?

2. Consider Home Ownership

Buying a home could be another way to invest. Home ownership is not for everyone, however, and often renting may be a better option.

We did this activity which was quite enlightening to me and may be to you as well:

Step 1: We divided up into groups of two to three people and spend a few minutes reviewing the positives and negatives of owning versus renting an apartment or home. We also add some of our own ideas to the lists.

Step 2: Then we all came back together and discussed the following questions: What did you learn? What additional positives and negatives did you write down?

For those considering home ownership, remember these two principles:

Buy a home only when and where it makes sense for you.

Buy only what you can comfortably afford.

Now let’s discuss some factors that can influence these principles.

Individually answer the questions below. If you cannot answer yes to these questions, renting in your current situation may be a better option than buying.

Why are these questions important to ask yourself before purchasing a home?

Most people buy a home using a loan called a mortgage. This mortgage is debt, and it will cost you interest. You are expected to make the monthly payments and pay back the loan.

For long-term financial stability, your monthly mortgage payment should not exceed 25 percent of your monthly income. Use this as a guide for what you can afford to pay, rather than what a lender is willing to let you borrow.

Calculator Activity

In the United States, the median household income in 2013 was around $52,000. What is the most money a family making $52,000 a year should spend each month on their mortgage payment?

As a group, enter the following information into your calculators. Stop after each step to be sure everyone receives the same answer before moving on to the next step.

Steps	Calculations
25% of 52,000 = annual mortgage expense	.25 x 52,000 = 13,000
13,000 divided by 12 months = monthly mortgage expense	13,000 ÷ 12 = 1,083

A family with this income would be wise to ensure that their monthly house payment not exceed $1,100.

Now, individually or with your spouse (if possible), calculate 25 percent of your monthly income following the steps above. You do not need to share this number with anyone else in the group if you prefer not to. Write your answer here .

What does it mean to you to purchase a home that you can comfortably afford?

Keep in mind that there are other expenses of home ownership beyond the mortgage. When you own a home, you are responsible for the maintenance. Things break, wear out, and sometimes need updating. Financial advisors generally recommend saving at least 1 percent of the value of your home each year for maintenance.

Bonus Checks

Right when we first started learning about financial stewardship, I got a new job that paid quarterly bonuses. With that extra money, we decided to use some of it for savings and the rest for an extra mortgage payment. We did the math, and this extra payment each quarter will save us thousands of dollars in interest!

Get out of Mortgage Debt

As explained previously, a mortgage is a loan—it is debt—and it costs you interest. Reiterating President J. Reuben Clark’s teachings, President Ezra Taft Benson said, “Let every head of household aim to own his [or her] home, free from mortgage” (“Prepare for the Days of Tribulation,” Ensign, Nov. 1980, 33). Paying off a mortgage earlier might require some sacrifice, but the faster you pay it off, the more money paid out in interest you save. There are two ways to pay down your mortgage:

Pay extra

Structure a shorter-term loan with a lower interest rate

Paying extra toward the principal can save you many years of payments and tens of thousands in interest. For example, if you had a 150,000, 30-year mortgage with a 4.5 percent interest rate, you would pay 123,610 in interest over the life of the loan. Look at the chart below to see how much time and money you can save by paying 100 or 200 extra per month.

	100 extra per month	200 extra per month
Time saved	Almost 7 years	Almost 11 years
Money saved	29,715	47,462

Another option to pay off a mortgage more quickly is to get a mortgage with a shorter term. Shorter-term mortgages typically come with lower interest rates. Your monthly payment is higher, but you will save years of payments and thousands in interest.

Let’s compare the same mortgage as before, but this time with a 15-year loan. The original example was a 150,000, 30-year mortgage with a 4.5 percent interest rate. Let’s compare that with a 15-year mortgage with a 3.5 percent rate.

	30-Year Mortgage	15-Year Mortgage
Interest rate	4.5%	3.5%
Monthly payment	760	1,072
Total interest paid	123,610	43,018
Time to pay off	30 years	15 years

In this case, a 15-year mortgage means a monthly payment of about 312 more, but it would save you:

15 years of mortgage payments.

Over 80,000 in interest.

What would you be willing to give up in order to pay extra on your mortgage or get a shorter-term mortgage to be free from debt sooner?

3. Seek Education

Education is another form of investing. Typically, additional training or education will have a cost. If you are going to invest in education, ensure that it will lead to better work so there is a good return on your investment. President Gordon B. Hinckley counseled that the “world will in large measure pay you what it thinks you are worth, and your worth will increase as you gain education and proficiency in your chosen field” (“A Prophet’s Counsel and Prayer for Youth,” Ensign, Jan. 2001, 4).

Sometimes it may be appropriate to incur debt to gain education, but there are also many other ways to pay for school. Explore all other options before turning to debt. If you do go into debt for education, strive to pay it off as quickly as possible.

The Education for Better Work self-reliance group may be a great option for you when considering investing in education.

How is education an investment in yourself?

Discuss Saving Money, Pursuing Home Ownership, and Investing in Yourself through Education in Your Family Council

One of your commitments this week will be to discuss saving, home ownership, and investing in your education during family council. Discuss things you would like to save up for, whether you should rent or buy a home (or how you can begin paying down your mortgage), and what educational goals, if any, you should work toward. You may want to use the “Sample Family Council Discussion” outline below.

Sample Family Council Discussion

Be sure to begin and end with a prayer to invite the Spirit.

Part 1: Review

What would you like to save up for someday? Review your answer to the ponder question earlier in the lesson.

What are some of the positives and negatives of owning a home versus renting? Review the activity we did earlier in this lesson

Part 2: Plan

How can you save for your future wants?

If you don’t currently own a home, should you consider buying a home? Or should you continue renting for the time being?

If you currently own a home, how can you work to pay down your mortgage faster? 

Would selling your home and renting for a time be a better fit for your current situation?

What type of education or additional education, if any, should you invest in for better work?

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.

“Therefore whosoever heareth these sayings of mine, and doeth them, I will liken him unto a wise man, which built his house upon a rock: And the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell not: for it was founded upon a rock”

Matthew 7:24–25

24  Therefore whosoever heareth these sayings of mine, and doeth them, I will liken him unto a wise man, which built his house upon a rock:

25 And the rain descended, and the floods came, and the winds blew, and beat upon that house; and it fell not: for it was founded upon a rock.

What are the most meaningful things I learned today?

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

My Commitments
I will practice and share this week’s My Foundation principle.
I will continue to put money toward my financial priority.
I will discuss saving money, renting versus purchasing a home, and investing in education during family council I will contact and support my action partner.

So, what do you think? Wasn’t this lesson chock full of good information? I wish I had had this information when I was a whole lot younger. It would have been a huge help for my husband and I back when we were buying our first home, or our second, or our third, or even our fourth😊 I left the questions for each of you to answer for your own circumstances and your own lives. I think it becomes more beneficial when you can make it personal – please do them justice and be honest with yourselves and your partner okay?

Well, dear Family and Friends here we are at the end of my post and the end of this lesson. We will continue with Part 2 of this subject in the next lesson. I will share it with all of you in a future post. You know we only have two more lessons and then we will be done with this class. I hope and pray that each one of you have benefited from my sharing these lessons with you. As always, please remember who you are – a child of God; remember who the Lord wants you to become. Continue reading my posts – of course😊 please continue studying the New Testament with us; say your prayers, count your blessings too! Until my next post – please make it a spectacular week😊