Don't buy stuff you can't afford...

Our stake has come out with a series of "newly married" firesides. (That is what they call them but all aged marrieds are invited) We went to one last night for financial planning. It was entitled "Where does all the money go?" The husband/wife team (the Blackwells) that taught it are in our stake. He is a financial planner and goes all over the country talking about finances. They were in their late 20's or early 30's....married 8 years have two little girls.

She spoke first and talked about little routines they have in their home. She noted that she didn't start doing these things when they had money. She started it when the bank account said zero.

1. Love your bills and payouts.

When the mail comes in she says you should be excited and say things like "I have been waiting for this one!" "We are grateful for things like the August SRP bill...Thank you that we are able to pay this and cool our home." She mentioned recording everything...save your receipts and track where the $$ is going.

2. Eliminate unhealthy money phrases.

Do not use language like "That's too expensive" or "We can't afford that" She said that her kids had never heard these words. (I wanted to know what she DOES tell her kids then...lol.) This was basically on the idea of “Whether you think you can or can’t either way you are right.” - Henry Ford 1863-1947

3. Know and understand where unnecessary spending comes from. Are you competing? Is it for self-fulfillment?

She admits that she has a hard time with spending still. Even though she came from a family whose parent's would save all year to take the kids on a vacation for the summer, and they paid cash. She said "anyone who knows me knows that I like nice things. But, I have realized that things won't always match. In fact, our TV is on a card table right now until we have saved enough to get what we want."

Bro. Blackwell started off his portion with a HILARIOUS video clip from SNL.

Here is the link to it on youtube...

http://www.youtube.com/watch?v=MxFx0NzSjWw

He brought up the idea of a cash management system. He counsels all kinds of people from all walks of life. He said you would be surprised at how many people are living paycheck to paycheck. There are surgeons who live surgery to surgery and if you took out their next 3 or 4 surgeries they would be filing for bankruptcy. He sees the same thing with pro athletes. Just because you have money doesn't mean you know how to manage it.

He talked about how it is not important to just know the system but to LIVE the system. He applied it to the gospel. You can know of the gospel and then there is living the gospel. They are two very different things.

The cash management system is:(these are net percentages)

10% Tithing/Charity- learn to give

10% to YOU= emergency fund. NOT a trip to Disneyland, new couch, etc. This must be on automatic draft. Out of sight out of mind. He said a lot of people think of their credit card as being their emergency fund. This won't work because it just keeps perpetuating a vicious cycle of debt to the cc.

10% Your future -401K, mutual funds, IRA (he suggested a ROTH). Again these must be on automatic draft.

This leaves you with 70% of your NET income to live within your means. You pay off your debt and save for things with this money. He said that when people come to him and ask things like "can I afford this house?" He runs this plan with him and if the mortgage doesn't fall in the 70% he tells them NO. That really make me think and reconsider how we will look at buying a home.

He used a lot of quotes from Thomas S. Monson's talk "Leadership-a Challenge Today"-Jan 26, 2006

"An educated man is not one who has trained his mind to retain a few dates in history. He is one who can accomplish things. Unless a man has learned to think, he is not an educated man, regardless of how many college degrees he has after his name." -Henry Ford

In that same talk Pres. Monson said "We cannot restrict our thinking to today's problems alone. We have the obligation to plan for tomorrow's opportunities. We are limited only by our thoughts and personal determination to convert these thoughts to realities."

About paying off debt Blackwell suggested using debt isolation to pay off the smallest balance first, then you apply what you were paying on that towards the next smallest balance until they are all paid off; regardless of interest rates on the other debts.

He ended with this, also from Pres. Monson's talk:

Formula for successful leadership and a noble life:
First, think big.
Second, prepare well.
Third, work hard.
Fourth, live right.


In all it was a great fireside. We have also signed up for the stake Strengthening Marriage Sessions. It is a new program by LDS Family Services to assist in strengthening our families. Sessions are limited to ten couples and we have to commit to attend all six sessions. They start 10/11 and end 11/15. We will let you know what we have learned!