Organizing Class #4

Only 3 more classes to go!

Class #4: Finances and Home Storage

-D&C 104:78-80. Clear formula: be humble, diligent, and pray in faith, and the Lord will help you accomplish your goal (pay off all your debts). The Lord keeps His promises!!

-Live on less than you make! It's been said thousands of times, yet we need to think about it more.

-The Lord will expand your ability to accomplish these goals when you are obedient. He wants you to be free of all debts, so let him help you by being diligent.

-Not all of us are going to be wealthy in this life. This life is about learning to be wise. Wise and wealthy are not always the same thing. (she used the word “wise” a lot instead of “poor” :) And the happiest people are usually not wealthy, but wise.

-Think about the pleasure vs. pain of buying something. Say you want a new red dress for Valentine's Day. Do you easily have the money to pay for it? If not, then it's going to be painful to buy it.

-Live in the now! Don't ever use credit cards (expect for dire emergencies). If you're in the habit of always using credit cards for shopping (even if you are paying them off each month), one day you'll be tempted to put a little bit more on the card or get something you really don't need. If you're using cash, you're priorities will be easier to see, and you'll be able to save more.

-Using credit cards is like having a fish hook in your mouth. If you're paying them off each month, the fish hook is only resting on your tongue, not bothering you. But then you overspend a little, and it starts to get embedded in your cheek. And then you have to put more on the card because you ran out of money, and that hook gets wedged in there even deeper. Let's just not deal with such temptations.

-Money Creed. A written document signed in blood by both spouses. ;)
-There should be a certain amount given to each spouse each month that is not accountable for anything. Mad money. Her recommendation was $30.
-There should be money set aside each month for “sleeping on it” kind of purchases, which should be for anything over $100.
-There should be money set aside each month for “doing your homework” purchases. These are things like appliances or car repairs, that you really should do your homework about before purchasing. She suggests going to consumer reports, go to at least 3 different establishments, and then let there be distance and time (sleep on it) before you buy anything in this category.

-Decide tonight to take control of your finances! There will never be enough money, so do what you can with what you've got!

-Budget: know how much $ is coming in the door (not just what you're husband's salary states). Know your outgoing payments. She puts these into 3 categories:
-Fixed payments: things that you pay every month. The first of these should always be tithing! Then rent/mortgage, utilities, etc.
-Occasional expenses: things that you pay only once or a few times a year. Taxes, insurances, etc. Divide these expenses by 12 and save enough money each month and you'll have the money when you need it.
-Variable expenses: surprises that are bound to happen. Tires, college, medical expenses, etc.

-Sometimes the blessings we receive from paying our tithing aren't easily seen. Maybe the washing machine was supposed to break down last month, but since we've been paying our tithing, the Lord will help it work for us a few months more.

-If money is separated, money is saved! She suggests opening a few more checking accounts than usual (one for fixed payments, one for occasional, one for variable/emergency account, and one for the future for weddings and missions). If you put money into these regularly for the things you will inevitably have to pay for, and it's not as accessible, then it will be easier to save it.

-You should budget and balance $ every week. You should also have a monthly “confrontation” with your spouse so that you're both informed and aware of your money. This will also bring blessings of unity. Make sure to make a nice dessert for those depressing months.

-Make your debts visual. Buy some graph paper. Let's say you have a debt of $2000, and your graph paper has 500 squares on each sheet. So, put up 4 papers on the wall (hang them publicly if you're not highly motivated, and privately if you are highly motivated) and for each dollar that you put towards paying off that debt, fill in a square.

-Start with the smallest debt, not the highest percentage rate. There have been studies that say that this has a higher success rate. And it's not as depressing.

-With car debts, for every 4 dollars you pay, 3 go to the loan, 1 go to the lender. Use a specific amortization chart from your lender to see exactly how your money is being spent.

-With mortgages it's much worse, with a ratio of 5:1. But for every extra dollar you pay on your mortgage, you save $5.

-They were able to pay off their mortgage (and other debts) early. They weren't sure if this was at all possible, so they went to their bishop. He told them that there was a brother in the ward that had accomplished this, so they went to him. He quoted the aforementioned scripture and asked them, “Are you willing to let the Lord pay off your debts? Then decide now to be obedient and He will fulfill His promises.” They started out just being able to put an extra $30 into their mortgage (after saving in their other accounts and paying for food storage, etc.[cuz don't you think it's more important to have food set aside before having your house paid for? Or that's just me. And this gal too I guess]). A little time went by, and they were able to find $45 to put into their mortgage. Then $60, then $90, and so on. And they did pay it off early! And they did have money saved for a rainy day! And they did have a year's supply of food! All because they promised to be obedient with their finances and lives. The day after they paid off their whole mortgage, the financial institution sent them a questionnaire with a crisp new $1 bill in it. It was their first free dollar. They still have it framed in their house.

-Home storage: anything that doesn't rot or go bad, that you use regularly. Paper products, soaps, etc.

-Make a list of things that fit this criteria for your family. Then decide how much of each item your family would use in 1 year. The average person uses 1 roll of toilet paper each week. So let's say your family uses 150 rolls per year. Decide on a brand for each item, and complete your list. Then decide which store(s) you're going to to get the best deals. Then go to the store ONCE A YEAR and get everything on your list (she goes every February because there's not as much going on in this month, and it's cold and depressing out). Think about all the time, money, and decisions you would save by doing this! Time, because you won't have to drag the kids to the car, wait in line, traffic, etc. going 52 times a year. Money, because you won't be spending as much on gas, or impulse buys, 52 times a year. And decisions because you'll never have to decide which brand of toilet paper to try out next! {my problem with this is what if there's a big disaster in January and you only have a few weeks left of toilet paper, but you really need a few months worth? Or if your husband gets laid off in November and you could really use your year's supply after that? Hmmm.}

-She puts a rubber band around her last item, so that if someone grabs the last one, you know immediately that you'd better get some the next time you're out.

-Buy it and then worry about where to put it. There will always be room (remember the Lord is helping you with these goals!). One suggestion was to fill some copy paper boxes with your year's supply of T.P. Line them up along one wall of a room that's not used as often as others (so that it's only taking up 1 foot of space from the room). Then cover with a quilt. Not pretty, but effective.


Well that's all for this class. I think I'm going to have to email her about the shopping once a year predicament. But I liked her funny idea about making a really yummy chocolate cake for when you're discussing finances in those lean months. She also had some handouts, I'll try to scan them in this week so you can see. Hope this all helps!