Managing Finances Better Can Help Your Spiritual Growth

Contributed By Marianne Holman Prescott, Church News staff writer

  • PROVO, UTAH

One of the most critical parts of individual and family finance is a solid spending plan.

Article Highlights

  • Spending plans are critical to individual and family finances.
  • Recognize that there are pros and cons for all financial plans.
  • If you live without a budget, you will live with the consequences.

“Some claim living within a budget takes the fun out of life and is too restrictive. But those who avoid the inconvenience of a budget must suffer the pains of living outside of it.” —Elder Marvin J. Ashton of the Quorum of the Twelve Apostles

“Personal finance is not separate from, but simply part of, the gospel of Jesus Christ,” said BYU professor Bryan L. Sudweeks during a session of Campus Education Week.

“As such, we should bring Christ into our personal finances,” he said on August 17. “One of the most critical parts of individual and family finance is a budget or spending plan.”

Brother Sudweeks, who has a doctorate in business administration and is an associate professor of finance at BYU, spoke on the topic “Living on a Budget and Loving It: Suggestions for Really Sticking to Your Budget.”

Why budget?

Speaking of the “whys” of budgeting, Brother Sudweeks said taking charge of one’s personal finances is more than just a smart thing to do. Budgeting has spiritual, temporal, family, and individual consequences.

“Because God’s work and glory is to bring to pass the ‘immortality and eternal life of man’ (Moses 1:39) and the only way we can have eternal life is through Jesus Christ, then the purpose of all mortal experiences is to bring us to Christ,” he said. “Learning to manage our finances according to gospel principles will help us grow spiritually as well as help build up the kingdom of God.”

Budgeting is a way for individuals to learn how to become “wiser stewards.” “Managing resources is a skill that Heavenly Father wants us to develop during mortality,” Brother Sudweeks said.

Recognizing the Lord as the great provider—that everything a person has was given to him or her by the Lord—Brother Sudweeks reminded listeners of the gift of agency and how every person will be accountable for personal decisions and actions, including how he or she uses finances.

Oftentimes a person blames not having any money on circumstances, parents, and others. It is hard to be responsible and disciplined, making changes where needed, but it is through a thoughtful budget—and sticking to that budget—researchers say, that individuals are able to take responsibility for their spending and make better choices.

“Research confirms that with a budget where both spouses plan and know where the money is coming and going, there is less stress in life and marriage and both spouses are happier,” Brother Sudweeks said.

Research also shows that those who learn to use a budget have more at retirement than those who don’t budget, as well as less stress. “Research supports when you plan where money goes, it goes farther and you accumulate more,” he said.

Recognizing in a marriage partnership there are two different views of how money should be spent, Brother Sudweeks encouraged couples to work together to find out attitudes toward money, family, cash management, savings, education, missions, investments, and retirement.

How to budget

Recognizing there is more than one right way to budget, Brother Sudweeks said the key is to get the principles right. He said to be successful, people must understand themselves and their goals and work toward them, spend less than they earn, keep good records of spending for tax and other purposes, and figure out and use a budgeting method that meets the needs of an individual and his or her family.

Recognizing there are benefits and disadvantages for all methods, Brother Sudweeks shared four simple plans and spoke of the success that comes as families figure out a plan that works best for them.

The envelope method: Each month a specific amount of money is allotted to certain categories designated by envelopes. As expenses come, money is taken from a specific envelope and, when necessary, money is shifted between the envelopes. This is a low-cost and easy way to manage money that will keep families within their budgets as long as they keep to the system.

The 60 percent solution method: After determining the gross salary each month, take 60 percent of that amount and spend only that amount. Then take 20 percent of the salary and put it into savings for long-term goals and take the other 20 percent to save to pay taxes at the year’s end. Once the money has been spent, don’t go outside the method for more money.

The spreadsheet method: Spreadsheets can be useful in recording how money is allocated and spent and can be useful when updated regularly.

Computer software method: There are many programs available (Mint.com, Quicken, Mvelopes, YNAB) that connect to bank accounts. The programs help determine gross salary and take-home pay each month after taxes and other deductions and show where money is going each month.

As people understand where their money is going, they are able to recognize where they can improve and make conscious decisions of how they would like to spend their money.

Most important, Brother Sudweeks said, families must do something. “You can’t just do nothing and hope!” he said.

The most successful methods are those that are relatively easy to use, are low cost, allow downloading of bills from banks and credit card companies, show a categorization of spending, and are minimal in time.

As people know their goals and what they want to accomplish, track their spending and expenses, and develop and implement their budget, they are able to compare it to actual expenses and make changes where necessary.

Ending with a quote from Elder Marvin J. Ashton, Brother Sudweeks said: “Some claim living within a budget takes the fun out of life and is too restrictive. But those who avoid the inconvenience of a budget must suffer the pains of living outside of it. The Church operates within a budget. Successful business functions within a budget. Families free of crushing debt have a budget. Budget guidelines encourage better performance and management” (“It’s No Fun Being Poor,” Ensign, Sept. 1982).

A woman looks through a class booklet at BYU Campus Education Week in Provo, Wednesday, August 17, 2016. Photo by Hans Koepsell, Deseret News.

Many people were in attendance at BYU Campus Education Week in Provo, Wednesday, August 17, 2016. Photo by Hans Koepsell, Deseret News.