I used to keep all my money in my sock drawer. It was really simple to budget: when I ran out, well, I ran out. But managing my money from my dresser drawer forever just wasn’t realistic. I found that out when I got my first job and then again when I went away to college. My expenses seemed to skyrocket, and keeping track of my money was no longer an easy task. I wanted to be better at managing my money, but setting up a budget at that point appeared overwhelming. If only I had known how easy and important it is.
Seven Tips for Financial Success
You may not have a lot of money right now, but learning how to take care of money now can keep you out of financial trouble later. Although there is no set way to manage your money, there are set principles to guide you. Here are seven valuable tips:
1. Pay your tithing first.
Paying tithing tests your faith and obedience. You will be blessed for paying it. The Lord may not send you a check in the mail, but He has promised that when blessings do come, they will be so great that there will not be room enough to receive them (see Mal. 3:10).
2. Spend less than you earn.
“The key to spending less than we earn is simple—it is called discipline,” 1 said President N. Eldon Tanner (1898–1982), of the First Presidency. Many people think the key to having more money is making more money. But more often than not, the more money they make, the more they spend. You’ll save more by spending less, and that takes discipline.
Spending less than you earn is especially important if you have a credit card. Make sure you have enough money to pay for whatever you charge on a credit card. Keep a small limit on your credit card. And try not to buy things on credit when you’re upset or not in the right frame of mind to evaluate your spending. The interest you’ll pay can really hurt.
3. Learn to distinguish between wants and needs.
Take a moment to think about the things you cannot physically survive without: water, food, clothing, shelter. Most often, the problem is not that we need more, but that we want more. For example, you need food and you have some in the fridge, but you want to eat out. You need shoes and you have some, but you’re tired of them and you want a new pair.
It’s okay to buy things you want, but when your wants come before your needs, it’s easy to fall into debt.
4. Learn how to work.
President David O. McKay (1873–1970) said, “The privilege to work is a gift, the power to work is a blessing, the love of work is success.” 2 If you want to be financially stable, be willing to work.
5. Pay yourself.
First pay tithing, then save some money. After paying 10 percent to the Lord’s Church, it is wise to set aside at least 10 percent for yourself in savings. Rainy days occur more often than you may think—and usually come without warning.
Say you buy a used car. At first it runs well. Then the car’s transmission fails, and the repair costs more than you earn in several months. To be ready for the unexpected, regularly save some money.
6. Get an education.
Generally, the more education employees have, the more they get paid. President Gordon B. Hinckley reminds us that “the Lord wants you to educate your minds and hands, whatever your chosen field. Whether it be repairing refrigerators, or the work of a skilled surgeon, you must train yourselves. … There can be no doubt, none whatever, that education pays.” 3
7. Follow a budget.
Finally, create and follow a budget—a spending plan. Though this may seem a little overwhelming at first, making a budget is easier than you think, and if you follow it, it will give you more financial freedom. Here are four steps to making and maintaining a simple budget:
Estimate your monthly income.
Write down what you think you will spend that month. Begin with your needs.
Keep track of your expenses throughout the month. Write down every cent you spend and what you spent it on.
Compare your actual expenses with your planned expenses. Evaluate what you are spending money on. Make adjustments for the next month.
Page 37 shows what a budget looks like. (Your income and expenses will be different.) On this page are two blank budget forms for you to use. You might want to photocopy them and keep them in your purse or wallet.
Does It Matter?
So does having money matter? I mean really matter? Many people think money is evil and worldly, but remember these two things:
First, all things are spiritual. In D&C 29:34 the Lord says, “All things unto me are spiritual, and not at any time have I given unto you a law which was temporal.” 4 The Apostle Paul taught that the love of money is evil, not money itself (see 1 Tim. 6:10).
Second, money is a medium of exchange. Elder Sterling W. Sill (1903–94) said, “If there is anyone who can’t buy happiness with money it must be that he just doesn’t know where to shop. We can build temples with money, we can send out missionaries with money, we can erect educational institutions, operate hospitals, and pay our tithing with money. … In many ways we can build up the kingdom of God with money.” 5 Money isn’t everything, but we can exchange it for things that can help bring us joy.
Like the things of this earth, money is something we have been given responsibility for, something that can teach us sacrifice, discipline, and work. Learning to manage money wisely can increase your freedom, teach you eternal gospel principles, and bring peace and happiness into your life.
The following forms can help with your budgeting. They are small enough to photocopy, fold, and keep in your wallet.
Spending money wisely starts with keeping track of it. Use these budget sheets as a guide. During the month, record your expenses on the Actual Expenses form. At the end of the month, transfer those expenses to their catagories on the Personal Budget Sheet.
“Discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can, and free yourselves from bondage.” —President Gordon B. Hinckley, Ensign, Nov. 1998, 54.
“We must not allow our yearnings to exceed our earnings.” —President Thomas S. Monson, Ensign, Nov. 2002, 54.
“Wherefore, do not spend money for that which is of no worth, nor your labor for that which cannot satisfy” (2 Ne. 9:51).
“If there is any one thing that will bring peace and contentment into the human heart, and into the family, it is to live within our means.” —President Heber J. Grant (1856–1945), Seventh President of the Church, Relief Society Magazine, May 1932, 302.
In site: To find more information on budgeting, click on Resource Management at www.providentliving.org.
“Constancy amid Change,” Ensign, June 1982, 4.
As quoted in Joseph B. Wirthlin, “Lessons Learned in the Journey of Life,” Ensign, Dec. 2000, 10 (emphasis in original).
“A Prophet’s Counsel and Prayer for Youth,” Ensign, Jan. 2001, 7.
“A Fortune to Share,” Ensign, Jan. 1974, 60.