Transcript Buying a Home

Education Week 2013
BYU Management Society
Taiwan Taipei Chapter
The Whys,
Whats, and
Hows of
Personal Finance
May 2, 2014
Bryan Sudweeks, Ph.D., CFA
From the BYU Marriott School of Management website on
Personal Finance
at http://personalfinance.byu.net
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Education Week 2013
Abstract
The Why, What and How of Personal finance
• The purpose of the education and the gospel is to
change lives for the good. The challenge is how do
we do that? Elder Boyd K. Packer said
• “True doctrine, understood, changes attitudes
and behavior. The study of the doctrines of the
gospel will improve behavior quicker than a
study of behavior will improve behavior (Boyd K.
Packer, “Little Children,” Ensign, Nov. 1986, 16).
• Understanding doctrines, principles, and
applications, the “why”, “what” and “how” of
Personal Finance, can help us help us and others as
we all work to be better followers of Jesus Christ
through managing our finances.
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Objectives
• A. What is our perspective on personal
finance?
• B. Why should learn personal finance?
• C. What should we learn about personal
finance?
• D. How do we apply those principles in our
lives?
• E. What is our responsibility as to personal
finance?
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A. What is our Perspective?
• Our perspective is that Personal Finance (or the
management of our finances) is simply living
the gospel of Jesus Christ
• It is putting Christ first in our lives
• “But seek ye first the kingdom of God, and his
righteousness; and all these things shall be added
unto you” (Matt. 6:33).
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B. Why Learn Personal Finance?
• The “why” questions are the important
questions in life
• These are the questions of the heart
• Why should we learn personal finance?
• These are the doctrines, the critical things in life
• Its purpose is to:
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Why (continued)
• 1. To bring us to Christ
• Whatever the problem may be in a person’s life—
failure to pay tithing, breaking the Word of
Wisdom, casual church attendance, [or I add - poor
financial habits, the]—real issue is faith in Jesus
Christ. If we can help people obtain the gift of faith
in Christ, good works will follow. The end purpose
of any law of God is to bring us to Christ. And how
well will the law work? It depends on what we
think of the Author of the law (Elder C. Max
Caldwell, “What Think Ye of Christ?,” Ensign, Feb
1984).
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Why
(continued)
• 2. To help us learn and accomplish our divine
missions for which were sent here to earth
• I bear testimony of the fact that if you keep the
commandments, He nourishes you, strengthens
you, and provides you means for accomplishing all
things necessary to faithfully finish your divine
mission here on earth. May the Lord bless you in
your decisions at this important time in your lives
(Elder Gene R. Cook, “Trust in the Lord”, Ensign,
Mar. 1986).
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Why
(continued)
• 3. To help us return with our families back to
Heavenly Father’s presence
• It helps us keep our priorities in order
• President Harold B. Lee said, “The most
important work you will do will be within the
walls of your own home” (Teachings of
Presidents of the Church: Harold B. Lee [2000],
134).
• President David O. McKay stated: “No other
success can compensate for failure in the home”
(quoted from J. E. McCulloch, Home: The
Savior of Civilization (1924), 42; in Conference
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Report, Apr. 1935, 116).
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Why
(continued)
• 4. To help us become wiser stewards over our
resources and blessings
• 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 (Elder Joe J. Christensen,
“Greed, Selfishness, and Overindulgence,” Ensign,
May 1999).
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C. What Should We Learn?
• Elder Richard G. Scott commented:
• Joseph Smith’s inspired statement, “I teach them
correct principles, and they govern themselves,”
still applies. The Lord uses that pattern with us.
You will find correct principles in the teachings of
the Savior, His prophets, and the scriptures—
especially the Book of Mormon. . . Your consistent
adherence to principle overcomes the alluring yet
false life-styles that surround you. Your faithful
compliance to correct principles will generate
criticism and ridicule from others, yet the results are
so eternally worthwhile that they warrant your
every sacrifice (Richard G. Scott, “The Power of 10
Correct Principles,” Ensign, May 1993, 32).
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What (continued)
• What are those principles that we must adhere
to, whose results are so eternally worthwhile
that they warrant our every sacrifice?
• Let me propose a few “correct principles,” that are
the foundation upon which this perspective is based
• I call these my “Principles of Personal Finance”
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What
(continued)
1. Ownership: Everything we have is the Lord’s
• The Psalmist wrote:
• The earth is the Lord’s, and the fullness thereof;
the world, and they that dwell therein (Psalms
24:1).
• The Lord is the creator of the earth (Mosiah 2:21),
the creator of men and all things (D&C 93:10), the
supplier of our breath (2 Nephi 9:26), the giver of
our knowledge (Moses 7:32), the provider of our
life (Mosiah 2:22), and the giver all we have and are
(Mosiah 2:21).
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What
(continued)
2. Stewardship: We are stewards over all that the
Lord has, is, or will share with us
• The Lord said:
• Thou shalt be diligent in preserving what thou
hast, that thou mayest be a wise steward; for it is
the free gift of the Lord thy God, and thou art his
steward (D&C 136:27).
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What
(continued)
3. Agency: The gift of “choice” is man’s most
precious inheritance
• President David O. McKay wrote:
• Next to the bestowal of life itself, the right to
direct that life is God’s greatest gift to man.…
Freedom of choice is more to be treasured than
any possession earth can give (Conference
Report, Apr. 1950, p. 32; italics added).
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What
(continued)
4. Accountability: We are accountable for every
choice we make
• The Lord stated:
• For it is required of the Lord, at the hand of every
steward, to render an account of his stewardship,
both in time and in eternity (D&C 72:3).
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What
(continued)
• On the questions of what is really ours, Elder Neal
A. Maxwell stated:
• The submission of one’s will is really the only
uniquely personal thing we have to place on
God’s altar. The many other things we “give,”
brothers and sisters, are actually the things He
has already given or loaned to us. However,
when you and I finally submit ourselves, by
letting our individual wills be swallowed up in
God’s will, then we are really giving something
to Him! It is the only possession which is truly
ours to give! (italics added, “Swallowed Up in
the Will of the Father,” Ensign, Nov. 1995, 22).
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D. How do we Apply These Priniciples?
• The final step is the “how’s” of personal
finance.
• What are the things we have been counseled to
do
• Let me just share a few of them from Church
leaders and the scriptures
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How
(continued)
• 1. Communicate
• “Management of family finances should be full and
equal, and mutual between a husband and a wife.
Control of the money by one spouse as a source of
power and authority causes inequality in a marriage
and is inappropriate. Conversely, if a marriage
partner voluntarily removes himself or herself from
family financial management, that is an abdication
of necessary responsibility” (Elder Marvin J.
Ashton, One for the Money, Intellectual Reserve,
2006, p. 3).
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How
(continued)
• 2. Pay the Lord First
• Tithing is the law upon which financial blessings
are predicated. Pay a full tithing and be generous
with offerings, and the windows of heaven will be
opened (Mal. 3:10). “And when we obtain any
blessing from God, it is by obedience to that law
upon which it is predicated” (D&C 130:21).
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How
(continued)
• 3. Manage Your Money and Use a Budget
• President Kimball counseled:
• “Every family should have a budget. Why, we
would not think of going one day without a budget
in this Church or our businesses. We have to know
approximately what we may receive, and we
certainly must know what we are going to spend.
And one of the successes of the Church would have
to be that the Brethren watch these things very
carefully, and we do not spend that which we do not
have” (Spencer W. Kimball, April Conference,
1975, pp. 166-167).
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How
(continued)
• 4. Pay Off Consumer Debt
• President Ezra Taft Benson shared:
• “The Lord desires his Saints to be free and
independent in the critical days ahead. But no
man is truly free who is in financial bondage”
(Ezra Taft Benson, “Prepare Ye,” Ensign, Jan.
1974, p. 69).
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How
(continued)
• 5. Prepare for Emergencies and Build a
Reserve
• A good financial plan should start with a cushion
for rough times. Most financial planners
recommend 3 to 6 months’ worth of living
expenses be set aside in a savings account.
• Emergency funds are for very specific purposes—
lost job, hospital or medical bills, major home or
car repairs, or other unexpected events. In addition
to monetary preparation, build up appropriate food
storage and other emergency essentials.
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How
(continued)
• 6. Save for Long-term Goals
• Begin saving now for long-term goals. It is
appropriate to borrow as necessary for education
and home, but be cautious. A mortgage is the likely
largest financial obligation you will take on, and it
will be a burden on your shoulders until the day it is
paid. President Hinckley’s advice is to “get a
modest home and pay off the mortgage” (Ensign,
May 1998). Save for retirement and understand
your available options.
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How
(continued)
• 7. Protect Yourself and Family Through
Adequate Insurance
• Elder Marvin J. Ashton counseled:
• “Appropriately involve yourself in an insurance
program. It is most important to have sufficient
medical, automobile, and homeowner’s
insurance and an adequate life insurance
program. Costs associated with illness, accident,
and death may be so large that uninsured
families can be financially burdened for many
years” (Marvin J. Ashton, “Guide to Family
Finance,” Liahona, Apr. 2000, 42).
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How
(continued)
• 8. Teach your children and family
• Teach family members why we want to be
financially responsible.
• Teach them the principles of financial management.
• Involve them in creating their own budgets and in
the family budgets as well.
• Teach the principles of hard work, frugality, and
saving.
• Stress the importance of obtaining as much
education as possible
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E. What is our Responsibility:
as to Personal Finance?
• How do to you learn to be wise financially?
• There are many sources of good information
• It just takes time to sort them out
• Let me add two other sources to your list:
• 1. The LDS Provident Living Website
• www.providentliving.org, then Family
Finances
• 2. The BYU Marriott School of Management’s
Personal Finance website
• http://personalfinance.byu.net
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LDS Provident Living Website
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Provident Living: Finances (continued)
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The MSM Personal Finance Website
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www.Personalfinance.byu.edu
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www.Personalfinance.byu.edu
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Summary
• Personal Finance is simply living the gospel of Jesus
Christ. Though times may be tough, a prophet said:
• I testify to you that our promised blessings are
beyond measure. Though the storm clouds may
gather, though the rains may pour down upon us,
our knowledge of the gospel and our love of our
Heavenly Father and of our Savior will comfort
and sustain us and bring joy to our hearts as we
walk uprightly and keep the commandments.
There will be nothing in this world that can
defeat us. My beloved brothers and sisters, fear
not. Be of good cheer. The future is as bright as
your faith (italics added, Thomas S. Monson,
“Be of Good Cheer,” Ensign, May 2009, 92). 32
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