"Managing Money: The Lord's Way"
A Moment To Ponder
(Reflective Questions and Self Evaluation)
*These questions should be answered a second time after reading this chapter.
- What is the Lord's Investment plan for the members of the Church?
- How do I take care of the temporal welfare of my family?
- What is the law of tithing?
- Am I ready for future emergencies?
- Do I manage by a budget?
- How can I become self-reliant?
- Do I control my wants versus needs?
- Am I a good steward of the Lord's money?
As a banking center manager for many years, I often found myself in conference with clients from all walks of life. A number of times these clients discovered that we shared a common religious faith. They would take me into their personal confidence. Some would reveal that they came into some extra money and wanted to know how they should invest it. I sensed many of them were looking for the "quick killing."
To their surprise I would recommend the Lord's investment plan. I would inquire, "Have you followed the Lord's investment plan?" With a puzzled look, they would respond, "What do you mean?" To which I would reply, "The prophets have been quite clear on how we should invest our money."
I would then suggest the outline that I had developed through years of proven experience. Although not glamourous or sizzling with the prospects of becoming rich overnight, it promised hidden blessings that would support one through the challenges of life.
Too often we travel this earth never realizing the countless blessings that protect us as a result of our obedience to the teachings of the prophets. Foregoing the dreams of fame and wealth, one can discover the richness of spiritual wealth that provides peace, security, and happiness. The principle is simple;
"Put God first, and everything else will fall into place."
He will chart our path homeward to exaltation.
Seven principles that lead to self reliance and financial security are shared in this outline on the next page. At this point in this book, many of these concepts have already been touched on. It is important to understand that all things are spiritual with the Lord, even the temporal affairs of our lives.
Read: D&C 29:34
Following the leadership of the church with respect to our stewardship over money will bring great spiritual prosperity and financial security. The Lord has given us counsel on how He would have us manage our money. This is merely a recommendation for your consideration. Each member of the Church must determine with the Lord what their financial plan will entail. Nonetheless, we have been given clear counsel as far as priorities.
THE LORD'S INVESTMENT PLAN
- Pay Tithing and Fast Offerings:
Ten percent of gross income, plus a generous fast offering.
- Save for Emergencies:
Ten percent of net income until a six month supply of living expenses is available in cash. This is your safe money.
- Acquire A One Year Food Supply:
Five percent of net income until a one year supply is attained.
- Pay Off Debt As Quickly As Possible:
Five percent or more of net income to start. After a one year food storage is achieved, increase debt pay down to 10% of net income per month.
- Have An Appropriate Amount Of Insurance
It is essential to have adequate medical, life, and auto insurance.
- Invest in Your Future:
Ten to Fifteen percent of gross income in a retirement plan after your six month emergency savings is established.
- Honor Your Stewardship of the Lord's Money:
Always try to make spending decisions as if it were the Lord's money.
How is all of the above achieved?
Trust in the Lord, Faith, Obedience, Commitment, Discipline, Sacrifice, and Budgeting.
This program was prepared as an outline to be handed out as a teaching aid. Each principle is based upon information that came from talks of general authorities and church publications. Let's take each principle individually.
Tithing and Fast Offerings:
"Bring ye all the tithes into the storehouse, that there may be meat in mine house, and prove me now herewith, saith the Lord of hosts, if I will not open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it." (Malachi 3:10)
"Thou shalt surely give him, and thine heart shall not be grieved when thou givest unto him; because that for this thing the Lord thy God shall bless thee in all thy works, and in all that thou puttest thine hand unto. For the poor shall never cease out of the land; therefore I command thee, saying, Thou shalt open thine hand wide unto thy brother, to thy poor, and to thy needy, in thy land." (Deuteronomy 15:10-11)
The Lord's promises are clear. He will bless us and prosper us if we are generous with our giving. Sometimes there has been a misunderstanding as to tithing. As we have been taught, tithing is one tenth of one's increase. Often members of the church have felt that tithing on their net income (after tax) is a full tithe. We should tithe on the gross income before any tax is taken out. I have always believed that it is better to pay God first, and the government second. As Christ has said:
"And he saith unto them, Render therefore unto Caesar the things which be Caesar's, and unto God the things which be God's." (Luke 20:25)
Our Heavenly Father is only requiring one tenth back of that which He has blessed us with. Sometimes it requires a bigger sacrifice to pay on the gross income rather than the net income. But, be sure of one thing; the blessing from heaven will be greater also. Why would a true follower of Christ not want to pay the Lord first and the government second?
Considering the story of Cain and Abel, in what attitude do we make offerings? Abel's desire in life was to give the very best to the Lord. We understand that Abel's offering was of a certain type. It was an unblemished pure sacrifice as dictated by the Adamic law.
Read: Moses 5:20
Cain's sacrifice was not the very best that he could have given the Lord.
Read: Moses 5:18-19, 21
In what spirit do you donate? Do you give the Lord your best?
One principle sometimes overlooked is that tithing is a preparatory commandment. It is not a higher law. Yes, it is required to be lived in order to enter the House of the Lord and participate in temple ordinances. But, the higher law of the Celestial Kingdom is the "Law of Consecration." This law requires one to freely give all that they have or may have to the Lord and His kingdom. If our attitude about tithing is that it is too difficult, how will we ever be able to live the law of consecration?
I have often wondered; "what would our lives be like if we actually gave the Lord 10% of our time?" That would be 2.4 hours directly to Him each day. How much closer would we be to the Holy Spirit? Just a thought! For those who are spiritually adventurous, it would be a great experiment in seeking the Spirit.
The law of tithing is part of a preparation to live the higher law that requires greater love and sacrifice, a love that is on the level of our Savior and Heavenly Father. A love that puts their glory first, ahead of our own.
Save for Emergencies:
Part of self-reliance is to take care of oneself and one's family. Being a husband and a father is a divine calling. As defined in the Church's publication "The Family: A Proclamation To The World" we read the following;
"By divine design, fathers are to preside over their families in love and righteousness and are responsible to provide the necessities of life and protection for their families."
For the above reason, a savings account is essential. It is a protection allowing one to provide the necessities of life in the event of the unexpected. No one can predict a medical setback, a loss of employment, or a natural disaster. These things just happen.
For years in the financial services industry, it was recommended to have at least a three month savings account set aside. Later, this was increased to six months, and now it is highly suggested to maintain a one year supply of cash on hand.
This is safe money that must never be put at risk. This is money that comes ahead of stocks, bonds, and other speculative ventures. It is money that you cannot afford to lose. It is not for vacations, recreation, new furniture, a new car, etc. It is untouchable and only for emergencies.
After setting aside ten percent for tithing and one percent for fast offerings, ten percent should be set aside for a cash savings account. Put it in a safe place that is liquid and accessible. As stated before, this is your emergency fund.
You should force yourself to accumulate the equivalent of one year's living expenses, before the more comfortable things of life are purchased. Remember, this fund's purpose is to protect those you love. It has no other purpose. Consider it sacred. Guard it!
Acquire a One Year Food Supply:
Current counsel which must not be ignored is to have a one year food supply. During the times of tribulation, as commodities become scarcer and more expensive, it will become harder and harder financially for society to afford food. Food prices will soar, and food supply will shrink.
This counsel of a year's supply of food, clothing, and fuel is not new. It has been proclaimed at the pulpit for generations. Rarely heeded, it one day may become the most important directive ever given to the Saints in these latter days.
Paraphrasing President Ezra Taft Benson again from "Prepare For The Days of Tribulation", October 1980 General Conference of the LDS Church, he said:
"For over forty years, in a spirit of love, "members of the Church have been counseled to be thrifty and self-reliant; to avoid debt; pay tithes and a generous fast offering; be industrious; and have sufficient food, clothing, and fuel on hand to last at least one year."
"We do not know when the crisis involving sickness or unemployment may affect our circumstances. We do know that the Lord has decreed global calamities for the future and has warned and forewarned us to be prepared."
"Plan to build your food storage just as you would a saving account. Save a little from each pay check . . . If you are saving for a second car, or a TV set or some item which merely adds to your comfort or pleasure, you may need to change your priorities. We urge you to do this prayerfully and do it now . . . I speak with a feeling of great urgency . . ."
Now seventy years of counsel have passed, creating even more urgency. He continues:
"The revelations to produce and store food may be as essential to our temporal welfare today as boarding the ark was to the people in the days of Noah."
Elder J. Rueden Clark Jr. in the April 1937 LDS Conference Report, page 26, stated:
"Let every head of household see to it that he has on hand enough food and clothing, and, where possible, fuel also, for at least one year ahead. You of small means put your money in foodstuffs and wearing apparel, not in stocks and bonds; you of large means will think you know how to care for yourselves, but I may venture to suggest that you do not speculate. Let every head of every household aim to own his own home, free from mortgage. Let every man who has a garden spot, garden it; every man who owns a farm, farm it."
How clear must the counsel of the brethren be in order for members of the church to act today? The time of warning is near past.
As a banker, brother, and friend this was one of the first questions that I would ask those inquiring LDS customers who wanted a hot stock tip, "Have you invested in a year's supply of food?" Too often, that question did not satisfy their hunger for wealth. One day that question may be more valuable than all the hot stock tips on Wall Street.
If one only takes five percent of their paycheck to invest in a food storage, they will accomplish a very successful start within a short period of time. It is important to remember that the preparedness program came about by divine revelation; it is a commandment. The commandment was given for the protection and benefit of our loved ones. Obedience to this commandment will reap great rewards, some of which will be not only temporal, but spiritual.
There are those that believe a food storage program will make no difference in times of trouble. When the food is gone, it will no longer matter. Of course, much of the wheat stored will be planted in order to replenish the crops after the desolation. But, will there be enough food after the desolation?
Those who have been faithful in keeping the commandment of food storage may well find themselves preserved and blessed for their obedience. Consider the following account of Elijah and the widow.
"And the word of the Lord came unto him saying, Arise, get thee to Zarephath, which belongeth to Zidon, and dwell there: behold, I have commanded a widow woman there to sustain thee. So he arose and went to Zarephath. And when he came to the gate of the city, behold, the widow woman was there gathering of sticks; and he called to her, and said, Fetch me, I pray thee. a little water in a vessel, that I may drink. And as she was going to fetch it, he called to her, and said, Bring me, I pray thee, a morsel of bread in thine hand. And she said, As the Lord thy God liveth, I have not a cake, but an handful of meal in a barrel, and a little oil in a cruse; and, behold, I am gathering two sticks, that I may go in and dress it for me and my son, that we may eat it and die. And Elijah said unto her, Fear not; go and do as thou hast said: but make me thereof a little cake first, and bring it unto me, and after make for thee and for thy son. For thus saith the Lord God of Israel, The barrel of meal shall not waste, neither shall the cruse of oil fail, until the day that the Lord sendeth rain upon the earth. And she went and did according to the saying of Elijah: and she, and he, and her house, did eat many days. And the barrel of meal wasted not, neither did the cruse of oil fail, according to the word of the Lord, which he spake by Elijah." (1 Kings 17:8-16)
I believe in a God of miracles. Just as Our Savior fed two thousand with a few baskets of bread and fish, as Jehovah sent manna from heaven, and as He blessed the widow woman above with many days of food, so will the Lord our God bless and sustain us in our time of need. The Good Shepherd's requirement is simple, "Exercise proper faith and keep this commandment."
The key to unlocking the windows of heaven is faith and complete obedience.
In the last chapter, we talked about debt and the tremendous burden it can place on one's spiritual and temporal progression.
Debt may be necessary for an education or to buy a house. Such debt should be modest and well within the comfort zone of one's income. To assume a debt obligation greater than one can comfortably afford, is irresponsible. It is a disservice to oneself, and to one's family. If a debt contract is so large that it prevents one from honoring his or her other agreements, and obligations, it should not be entered. To do such, is character suicide.
Pride should never overrule integrity in one's purchase contracts. Wants should never supersede needs. Remember, less is always better, when it comes to debt and living within one's means. Debt should only be entered after a concise budget and understanding of finances has been carefully pondered and studied.
A final word is in order. Always seek experienced non-partial expertise before entering a large debt obligation. Do not enter a contract, simply because "everyone else is doing it." And do not allow pride to prevent you from seeking disinterested professional advice. Doing so could save you thousands of dollars and much heartache.
If you have debt, pay it off as soon as possible. Use an extra five percent of your net income to pay down the principal balance quicker. Because most 30 year loans have a compounding interest factor, the cost of a 30 year loan may end up being three times the original amount. Why pay for your house three times?
After you have completed your food storage goal, increase your debt pay down percentage to ten per cent, from the previous five per cent of your net income. The sooner you are out of debt, the sooner you will be financially free.
Have A Proper Amount of Insurance:
There are four types of insurance that are essential for your family's protection; Life Insurance, Health Insurance, Auto Insurance, and Home Owner's Insurance. Seek professional advice as to the best coverage for your situation.
Life insurance coverage should be equal to an amount that would pay off all debts and then allow the surviving spouse time to rebuild their life. They may need to get an education, job training, find a job, and still cover the family's day to day expenses. It would not be unusual to have a mortgage, education loan, and other obligations. The spouse may need two to three years to recover from a death. Three year's income and enough to cover all outstanding debts is a recommended minimum. An average of $250,000 to $500,000 in life insurance coverage could be a starting point for many families.
Health insurance is even more important than life insurance today. Chances are that medical needs will be ongoing. No one can plan for an emergency and its impact. A short visit to the hospital could cost someone their life savings, and even cause a medical bankruptcy. To lose everything one has accumulated in life over a lack of medical insurance would be another tragedy on top of the medical tragedy.
Auto insurance is important because an accident resulting in the injury of another person could create a legal liability that is huge. A sensible coverage would be enough to cover the medical costs of you and another person injured. Liability coverage should be greater than that of your current net worth. Remember, a plaintiff could sue you for the amount over and above your liability coverage. Healthy liability coverage is recommended. Auto insurance is not only for car repair and replacement, but for medical and injury damage.
Homeowner's insurance protects your home in the event of loss due to fire, earthquake, flooding, and other natural disasters. It covers the cost of replacing the home's contents. It also covers the liability if somebody is hurt on your property. The total coverage should be equivalent to the value of the home, value of its content, and an amount equal to your net worth should you be sued due to personal injury.
We live in a society that thinks nothing of suing for damages for any reason at all. There are countless lawsuits that are initiated with the sole intent to get gain. The motivation is greed. The safest way to protect your life long assets, is to have the proper amount of insurance.
Invest In Your Future:
Planning for retirement should start early in life. The earlier you start the more you will have at retirement. Retirement plans are usually funded with before tax dollars. If possible the participant should contribute the maximum possible to these kinds of plans. If it is affordable and within your current budget, 10% -15% percent of your gross income is advised. If it does not meet your budget, start with 5% -10% of your gross earnings.
The advantage in contributing to these plans is that you are actually funding part of the amount with tax dollars that you are going to pay anyway. Those tax dollars that you would pay anyway, can now work for you for ten, twenty, thirty years. Another possible benefit is that many company plans match part of your funding amount. This is free money that is almost like an extra bonus. You should capitalize on any such program.
It only makes good sense to plan for retirement. It is part of being self-reliant in your senior years.
After you have completed your emergency fund goal of one year's living expense in cash, you should divert those monthly payments to a higher contributory level in your retirement plan. This way you are always growing your net worth and planning for the future.
To accomplish a good money management plan you, must set up a monthly budget. Using this budget one can follow the above guidelines to achieve total self-reliance in the years ahead. Every budgeted dollar saved will build a brighter future for you and your family.
The biggest challenge in a budget will be to put wants ahead of needs. The recommendations above are not wants. They fall into the category of future needs. Today's wants must be sacrificed to achieve tomorrow's needs. A husband and father's responsibility is to protect his family now and in the future. The Lord's Investment Plan will allow this to happen.
Honor Your Stewardship of the Lord's Money:
This principle is simple, "Follow the Spirit!" Spend your money as if it is not your own. Spend it as if it were the Lord's. Ask these questions: "Is this transaction fulfilling my role as a father, husband, son, or brother? How would the Lord feel about this transaction? Will it build His kingdom? Will it help me to fulfill my earthly mission? Will it make me a better person? Will it give someone a better spiritual quality of life? Is the sacrifice I am making approved by the Lord?"
These are the tougher questions that need to be asked. During this time of probation on earth, we only have a short period to prepare to meet God. How we use the blessing of money can play a great role in our eternal success.
The Church published a pamphlet in 1992, which is free to anyone who would like it. It is called "One For The Money: Guide To Family Finance" by Elder Marvin J. Ashton. His orignal talk "One For The Money" can be read here. It has excellent information that expands on the information that I shared in this chapter.
The purpose of this chapter is to give a proven plan that will work in the challenging days ahead. The promises of the Lord are found within each step of the plan. The first outline sets a priority as to where your money should first be spent. Of course, your direction should always be a manner of prayer. Remember that the promises of heaven are always predicated upon obedience to the Lord's counsel.
I have found in my personal and professional experience that no other plan will reap the same rewards of financial safety and success. I have observed others try their own methods which have failed. The Lord's way of managing money is sure and proven.