The purpose of this lesson is to help us learn and apply the basic principles of wise money management.
Of the numerous references in the scriptures to money and riches, many warn us not to covet wealth. For this reason, many people fear that all money is evil and that they may displease the Lord if they spend time and energy in earning and saving money. But this is not true. It is the love of money that is “the root of all evil,” not money itself (see 1 Timothy 6:10).
President Spencer W. Kimball said: “Not all money is filthy. There is clean money—clean money with which to buy food, clothes, and shelter, and with which to make contributions.” President Kimball went on to explain that “clean money” is the pay we receive for honest work. He said that money becomes filthy only when it is obtained from any type of dishonesty. (See Faith Precedes the Miracle , 235–36.)
Neither wealth nor poverty is an indication of individual worthiness. Some great men of God have been rich and some have been poor. The amount of money we have is not important, but rather how we obtain and use it. Using money to provide for the temporal needs of our families, for example, is not only proper, but is a commandment from God (see 1 Timothy 5:8). The commandment to provide for our families is easier to obey when we learn and apply the basic principles of wise money management.
Principles of Wise Money Management
Although everything on the earth belongs to the Lord (see Psalm 24:1), He allows us to use and possess some of His earthly things. We are warned, however, that the Lord will hold us accountable for how we manage what He has permitted us to use. In the parable of the talents, for example, the Savior teaches us the importance of wisely managing our earthly possessions.
Ask a class member to read the parable of the talents found in Matthew 25:14–30. (In the days of Jesus, a talent was a unit of money.)
There are several basic principles we should consider in managing our money wisely. Almost all of us can improve in one or more of these areas. The Lord will help us improve as we put Him first and follow the principles of wise money management.
List each principle of wise money management on the chalkboard as it is discussed.
Pay Tithes and Offerings
The first and most important payment we should make is tithing. The Lord has promised those who pay their tithing faithfully that He will “open … the windows of heaven, and pour … out a blessing, that there shall not be room enough to receive it” (Malachi 3:10). Although the Lord does not promise us great wealth if we pay our tithes and offerings, He does promise to bless us both spiritually and temporally.
Work is a blessing that allows us to provide for our families. By working steadily and honestly, we can attain financial security. (Lesson 23 of this manual contains counsel on developing and improving our employment skills.)
Avoid Unnecessary Debt
Although it is sometimes necessary to borrow money, we should avoid debt as much as possible. We should pay off the debts we have as quickly as possible. Elder Ezra Taft Benson said: “Let us live within our income. Let us pay as we go. … Let us heed the counsel of the leadership of the Church. Get out of debt!” (Pay Thy Debt and Live, Brigham Young University Speeches of the Year [28 Feb. 1962], 12).
How can we avoid unnecessary debt?
Plan and Spend Carefully
Read Luke 14:28. What does it mean to “count the cost”?
As this scripture tells us, we must plan carefully before spending our money. Many people get into debt because they fail to control their spending. If a family plans how to use their money, they will keep out of financial trouble.
We need to consider carefully the importance of each purchase before we make it. Many things we buy are actually of no value to ourselves or our families. If we take time to think about the future use of any item before we buy it, we will avoid buying things we really do not need.
Read 2 Nephi 9:51. What are some of the things of “no worth” for which we are tempted to spend our money?
For many people, saving money is very difficult. As members of the Church, we have been counseled to regularly save a portion of our income. If we make up our minds to regularly save even a small part of our earnings, whether they be money or materials, we will someday be glad we did so. In setting up a savings program, we are providing financial security for our families as we plan for the future. We can also save for a special purpose, such as going on a mission or traveling to the temple.
Using Family Councils to Manage Money
Too often, we spend as much money as we earn. Our wants seem to increase as fast or faster than our income. It is very important, therefore, that we budget our money carefully. Although each family differs in its needs and wants, most families find it helpful to follow a plan similar to the one described below:
Show visual 21-a, “Family council is a good time to make a budget.”
All members of the family should discuss financial matters and agree on a system for handling finances. This may be done by holding a family council in which the father presides and family members participate. At this council, the family should make a list of all sources of income for family use. This list might include money earned by members of the family, homegrown vegetables and grains that could be sold, or items made at home to sell to others.
Next, the family should write down all their needs and wants, listing first the more important expenses and then the desired but nonessential items. The list might include Church contributions; savings (for such things as going to the temple, serving a mission, and gaining an education); taxes; and money budgeted for housing, food, clothing, tools, transportation, and recreation.
Finally, the family should agree on how much money can be set aside for each item. Some less important items at the end of the list may never be purchased, but it is better to take care of the necessities first. President Brigham Young once said: “Our wants are many, but our real necessities are very few. Let us govern our wants by our necessities, and we shall find that we are not compelled to spend our money for naught” (Discourses of Brigham Young , 297). On another occasion he explained that poverty is caused by the lack of wise judgment. He noted that many people who earn very little waste it on unimportant things until they are deeply in debt. (See Discourses of Brigham Young , 317.)
Show visual 21-b, “A sample budget.” Explain that a family could use a list like this to plan a budget in family council.
We will be blessed greatly as we plan carefully and budget our money. Setting goals, making plans, and working together to achieve them will allow us to take care of our families as the Lord has commanded. An added blessing from working together is the greater love and unity our families will enjoy. The following story shows how a man (Vaha‘i Tonga) and his family were blessed as they worked and budgeted together:
“I promised our four children that if they would help, we could go to the temple together. I thought to myself, ‘How can you say, be a good boy or be a good girl, if I am not sealed to them in the temple?’ I had the feeling that they were not mine.
“For two years we sacrificed almost everything. I divided my pay from school for each one of us, and we saved that. But we paid our tithing and fast offerings. We were left with 70¢ in our hands each month. This is how I lived with my family, on 70¢ a month for two years. We lived on what we could grow and gather. I remember my wife would wake up early in the morning to make our salads with bananas and coconut milk. My children could not buy candy or shoes or go to movies because they were saving to go to the temple. …
“Through sacrifice we were able to take our family to New Zealand to be sealed in the temple. We had to do some extra things to accomplish our goals, but it was a great blessing to us” (“We Lived on 70 Cents a Month for the Temple,” Ensign, Feb. 1976, 31).
Our Heavenly Father has counseled us to manage our money so we can care for our families and be happy. If we do not care for our families, the Lord will hold us accountable. In order to care for our families, we should follow the basic steps and guiding principles of wise money management. If we put spiritual things first, the Lord will help us manage our finances.
Analyze your spending practices, and set up a workable budget by following the principles outlined in the lesson.
Proverbs 22:7 (the borrower is servant to the lender)
Malachi 3:8–11 (payment of tithes and offerings brings blessings)
Jacob 2:18–19 (we should seek the kingdom of God before seeking riches)
Doctrine and Covenants 56:16–17 (warnings to the rich and to the poor)
Doctrine and Covenants 104:11–13 (all men are accountable for stewardships over earthly blessings)
Before presenting this lesson:
Read Gospel Principles chapter 27, “Work and Personal Responsibility.”
Read lesson 23, “Developing and Improving Employment Skills,” in this manual.
Assign a class member to tell the parable of the talents (see Matthew 25:14–30).
Assign class members to present any stories, scriptures, or quotations you wish.