Family Finances in Critical Times

Today the Dow tumbled to its worst single-day point loss ever. During these times of financial distress the LDS Church provides wise council in their brochure entitled Family Finances Here is some of its contents:

“Prepare for adversity by looking to the condition of your finances. We urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt. Pay off debt as quickly as you can, and free yourselves from this bondage. Save a little money regularly to gradually build a financial reserve. If you have paid your debts and have a financial reserve, even though it be small, you and your family will feel more secure and enjoy greater peace in your hearts.”

The Web site also provides the following guidelines for families to become more financially responsible:

1. Avoid debt. Learn self-restraint by spending less money than you make and saving money to purchase what you need. Avoid debt except for vital needs, education and the purchase of a modest home. If in debt, try to pay it off quickly.
2. Use a budget. Keep a record of your monthly income and expenses. With this information, set up a family budget. Establish how much you will save, how much you will spend for food, housing, insurance, utilities, etc. Reduce what you spend on things that are not necessary.
3. Teach family members early the importance of working and earning. Children should be responsible for the decisions that affect their own money and face the consequences of their bad spending. As your children mature, help them understand the family financial situation, budget goals and their individual responsibility within their families.
4. Work toward home ownership. Improve the home you acquire so you can use the accumulated equity for a better home if you decide to sell it.
5. Appropriately involve yourself in an insurance program to avoid the significant debts place upon families when they are uninsured.
6. Involve yourself in a food storage and emergency preparedness program. Planting and harvesting a garden annually can help the family budget and encourage food storage.
7. Build a reserve. Accumulate savings little by little and use it for emergencies only.

The Web site also provides a number of financial tools to guide families and individuals in the decision-making process. These tools can help determine — based on an individual’s own income — how soon loans and debts can be paid off, how much to save for retirement, how much to save to reach a specific goal, and the monthly payment on a new home.