The Why S, What S and How S of Personal and Family Finance

The Why’s, What’s and How’s of Personal and Family Finance

Bryan Sudweeks and Jeff Hill

January 8, 2015

Sometimes money is a blessing, while other times money is a curse. But one thing for sure is that money is a paradox! It’s true we must have enough to meet our basic needs for food, shelter, and clothing. And yet we read in the scriptures that “the love of money is the root of all evil.”[1] We are taught that we should save and invest money for our mortal future, and yet the scriptures counsel us to also “lay up for yourselves treasures in heaven.”[2]

Managing money can be tricky. We know we can do only three things with money. We can spend it (which includes paying taxes), save it, or give it away. Beyond that, we often do not know what we should be doing with it. There are many loud voices in the world telling us what to do with our money and our credit. We are told to get the car we want now and pay for it with just 60 easy monthly installments. We are told to get a home equity loan and take the vacation we so deserve, and the interest may be tax deductible. We are told that day trading and house flipping are sure ways to get rich quick. But messages like this could and often do lead to financial ruin.

However, managing money is not so difficult if we build our finances upon a firm foundation. And what is that foundation? We must build our financial house upon the rock of the gospel of Jesus Christ. If we do this when the rains of a recession descend, floods of a lay-offs come, and winds of high interest rates blow and beat upon our house, it will not fall for it is founded upon the rock of Christ.[3]

To build upon that rock, we must take a doctrinal perspective which helps us follow the scriptural admonition to “not spend money for that which is of no worth, nor your labor for that which cannot satisfy.”[4] We must follow basic principles of financial restraint and responsibility. And we must apply these principles so we can successfully manage competing financial commitments while keeping our “eye single to the glory of God?”[5]

In this article we will share an eternal perspective on the “why’s”, “what’s”, and “how’s” of personal and family finance. We will highlight inspired financial doctrines, profound financial principles and practical financial applications that will help you put your financial house in order. These fundamental doctrines, principles, and practices are not difficult to understand. But they do require you to be diligent and restrain the impulses of the natural man. That said, these are within the reach of every person. And success is essential. Indeed, how you choose to consecrate your material resources to the needs and wants of your family, as well as to bless God’s other children, is at the core of your purpose in life. Let’s get started!

Framework for Financial Study

As we begin, it is important to develop a framework on which to organize what we study about personal and family finance. We will use Elder David A. Bednar’s framework for learning which includes three areas: doctrines, principles, and application. He explains:

Gospel doctrine is a truth of salvation revealed by a loving Heavenly Father. Gospel doctrines are eternal, do not change, and pertain to the eternal progression and exaltation of Heavenly Father’s sons and daughters . . . Gospel doctrines answer the question of “why?” . . . A gospel principle is a doctrinally based guideline for the righteous exercise of moral agency. Principles provide direction. Correct principles always are based upon and arise from doctrines, do not change, and answer the question of “what?” . . . Applications are the actual behaviors, action steps, practices or procedures which gospel doctrines and principles are enacted in our lives . . . Our tendency is to focus on applications. But as we learn to ask ourselves, “What doctrines and principles, if understood, would help with this challenge?” we come to realize that the answers always are in the doctrines and principles of the gospel.[6]

The foundation of an eternal perspective on money is to understand the inspired doctrines and profound principles involved. These are the “why’s” and the “what’s” of personal and family finance. We will then be better prepared to answer and apply the “how’s” or the application of these financial principles in our lives. As Elder Bednar shared, we believe the answers we seek, even in money matters, are in truly applying the doctrines and principles of the gospel of Jesus Christ. Indeed, perhaps the best way to be a responsible financial steward is to be a truly converted disciple of the Savior Jesus Christ.

Personal and family finance can generally be viewed in two ways, either with an eternal perspective or the world’s transitory, materialistic perspective. The eternal perspective assumes that all material resources are owned by God and that we are stewards over those resources to bless His children. The way to manage that stewardship is simply applying the gospel of Jesus Christ in our lives and applying the principles of consecrated Christian living to the way we manage our money.

The world’s materialistic perspective is any other perspective that takes God out of the equation. In this worldly perspective, material resources are to be used for personal pleasure, comfort, status, and a host of other reasons. We believe the perspective you choose will make a big difference in the way you manage your money and your life. One student wisely noted that personal and family finance, from an eternal perspective, is simply the temporal application of spiritual principles.

We issue you a challenge reminiscent of the challenge the prophet Joshua once gave to the worldly Israelites. “Choose you this day whom ye will serve; whether the gods [of impatient worldly indulgence in material things] … or the gods of [consumer debt], in whose land ye dwell: but as for me and my house, we will serve the Lord.”[7] We challenge you to choose to follow the Savior and the words of His living prophets: “Prepare for adversity by having a little money set aside. . . Provide for [your] own needs to the extent possible. . . [Pay] your debts and have a financial reserve.”[8] When we follow financial counsel from the Lord’s servants, we are keeping commandments just as important as the Word of Wisdom or the law of chastity.

The Why’s

Before we can decide what we should do, we must answer the question “Why should we learn about personal and family finance?” These consist of the inspired doctrines about this important subject. We have chosen to answer this question from four different perspectives, although other perspectives are possible. We have chosen the (1) spiritual, (2) temporal, (3) family, and (4) individual perspectives. In answering from these different perspectives, we hope to get a more complete answer to this critical question. Let us share a few answers that we have found helpful.

1. Spiritual: To bring us to Christ

From a spiritual perspective, the ultimate doctrine of everything God does is to bring us to Christ. If God’s work and glory is to bring to pass the “immortality and eternal life of man”,[9] and if the only way we can have eternal life is through Jesus Christ,[10] then the purpose of all God does is to bring us to Christ. Elder C. Max Caldwell said:

Whatever the problem may be in a person’s life—failure to pay tithing, breaking the Word of Wisdom, casual church attendance, [or, we add, poor financial habits]—the real issue is faith in Jesus Christ. If we can help people obtain the gift of faith in Christ, good works will follow. The end purpose of any law of God is to bring us to Christ. And how well will the law work? It depends on what we think of the Author of the law.[11]

2. Temporal: To help us become wiser stewards

From a temporal perspective, our goal is to become wiser stewards. The Lord said, “For it is required of the Lord, at the hand of every steward, to render an account of his stewardship, both in time and in eternity. For he who is faithful and wise in time is accounted worthy to inherit the mansions prepared for him of my Father.”[12]

The way we choose to be wise stewards and consecrate our material resources to God literally brings us closer to the Savior. What better blessing than that for learning and then applying financial doctrines and principles!

3. Family: To return with our families back to Heavenly Father’s presence

An eternal perspective of the finances of the home literally strengthens our eternal marriage and is a conduit for positive parenting. As husband and wife work positively together to set financial goals and establish a plan to meet those goals, the trust and love in their marriage grows. Eternal bonds are strengthened.

This eternal perspective also leads us to be examples to our children as we put the Lord first through sacrifice, service, and hard work. We show we put the Lord first as we pay our tithing, fast offerings, and other charitable contributions. And we teach our children the things we have learned, keeping an “eye single to the glory of god”[13] and showing our children, by our actions, what we truly believe. President David O. McKay reminded us: “No other success can compensate for failure in the home.”[14] We will be disappointed in life if we gain the riches of the world and lose our spouses and families.[15] Being faithful financial stewards is important in our quest to live together forever as families in the presence of God.

4. Individual: To accomplish our divine missions

From an individual perspective and based on The Family: A Proclamation to the World, we know we all have divine missions to perform here on Earth, our “divine nature and destiny.”[16] Personal and family finance can help us learn the lessons, develop the skills, and obtain the resources needed to accomplish them. Elder Gene R. Cook said: “I bear testimony of the fact that if you keep the commandments, He nourishes you, strengthens you, and provides you means for accomplishing all things necessary to faithfully finish your divine mission here on earth.”[17] Do you really believe that you have a mission here on earth to perform? Are you performing it? Many of our missions require material resources to be successful. As we are faithful financial stewards, we can acquire resources to be consecrated to the work God has for us to do.

The What’s

The second important question is “What are the what’s, the profound principles on which this stewardship perspective is based?” Elder Richard G. Scott said: “[The] inspired statement, ‘I teach them correct principles, and they govern themselves,’ still applies. The Lord uses that pattern with us.”[18] If that is the case, what are those principles to which we must adhere in regards to personal and family finance that will guide us in our financial decisions? Let us propose a few principles that have made a major difference our lives and the lives of our families.

Principle 1: Ownership

The first divine principle of an eternal perspective is that God owns everything and we own nothing. The Psalmist wrote: “The earth is the Lord’s, and the fullness thereof; the world, and they that dwell therein.”[19] We know from scriptures that the Lord is the creator of the earth[20], the creator of worlds, men, and all things[21], the supplier of our breath, the giver of our knowledge[22], the giver of our life[23], and the giver of all we have and are.[24] Nothing we have is our own—it is all God’s. As such, there should be no feeling of personal pride for the things we acquire. These things do not belong to us, they belong to God. Because they belong to Him, we must consecrate our finances to furthering His work.

Principle 2: Stewardship

The second principle is that we have a responsibility to be wise stewards in the way we manage our financial resources. We must again realize that God owns everything and that we have a responsibility to use our money for His purposes. We should first meet the needs and appropriate wants of our families and then consecrate the rest to bless God’s other children. The Lord stated, “It is expedient that I, the Lord, should make every man accountable, as a steward over earthly blessings, which I have made and prepared for my creatures.”[25] Being blessed with material things in life should not be seen only as a blessing but also as a responsibility, as the scriptures remind us that “for unto whom much is given much is required.”[26] We will be required to give an account of our stewardship to Heavenly Father over the blessings we have received. Who did we help? How did we serve?

Principle 3: Agency

The third principle is to use our agency wisely in managing our financial resources. One of the basic purposes of life is to exercise agency to make choices to further the work of the Lord. Our financial stewardship enables us to make many choices. We were given our agency by a Father in Heaven who gives us our will to choose our course in life. President David O. McKay wrote: “Next to the bestowal of life itself, the right to direct that life is God’s greatest gift to man . . . Freedom of choice is more to be treasured than any possession earth can give.”[27] Correctly managing our finances enables us to exercise agency to fulfill this purpose of life.

Principle 4: Accountability

The fourth principle is that of accountability. The Lord counseled, “For it is required of the Lord, at the hand of every steward, to render an account of his stewardship, both in time and in eternity.”[28] The blessing of agency is an unconditional gift of God. How we use that gift shows what we truly believe and how much we love Him and His Son Jesus Christ. We are financially accountable in several ways. We report our tithing each year to the bishop in tithing settlement. Husbands and wives are accountable to each other to exhibit enough financial restraint to live within the budgets that they agreed on together. We are accountable to financial institutions to keep our contracts for the repayment of debt and the responsible use of credit cards. The first three principles outlined above are God’s gift to us. The fourth principle of accountability, if done wisely, can be our gift back to God.