BYU Wellness Conference

1
BYU Wellness Conference

• Making the Most
• Of your Financial Resources
• Bryan L. Sudweeks, Ph.D., CFA
• September 2, 2009

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Abstract

• When the brother of Jared came to the ocean on
  his way to the promised land, he had two
  problems light and navigation. The Lord helped
  the Brother of Jared in both the stone and the
  storm. I believe He is in our storms today. In
  these challenging times, it critical that we make
  the most of our limited financial resources. This
  presentation gives 10 steps to making the most of
  our financial resources in the current storm we
  are in. And then if we are wise enough to learn
  what God is trying to teach us, we too will make
  it to our promised land.

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This is Only a Test

• Our challenges, including those we create by our
  own decisions, are part of our test in mortality.
  Let me assure you that your situation is not
  beyond the reach of our Savior. Through Him,
  every struggle can be for our experience and our
  good. Each temptation we overcome is to
  strengthen us, not destroy us. The Lord will
  never allow us to suffer beyond what we can
  endure.
• Elder Robert D. Hales, Becoming Provident
  Providers Temporally and Spiritually, Liahona,
  May 2009, 710.

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Making the Most of Your Financial Resources

• Remember the Principles of Finance

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1. Remember the Principles

• Elder Richard G. Scott commented
• Joseph Smiths inspired statement, I teach them
  correct principles, and they govern themselves,
  still applies. The Lord uses that pattern with
  us. . . Your consistent adherence to principle
  overcomes the alluring yet false life-styles that
  surround you. Your faithful compliance to correct
  principles will generate criticism and ridicule
  from others, yet the results are so eternally
  worthwhile that they warrant your every sacrifice
  (Richard G. Scott, The Power of Correct
  Principles, Ensign, May 1993, 32).
• What are those correct principles that are so
  eternally worthwhile?

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Principle 1 Ownership

• 1. Ownership Everything we have is the Lords
• The Psalmist wrote
• The earth is the Lords, and the fullness
  thereof the world, and they that dwell therein.
  (Psalms 241)
• The Lord is the creator of the earth (Mosiah
  221), the supplier of our breath (2 Nephi 926),
  the giver of our knowledge (Moses 732), the
  provider of our life (Mosiah 222), and the giver
  all we have and are (Mosiah 221).
• Nothing we have is our ownits all Gods
• .

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Principle 2 Stewardship

• 2. We are stewards over all that the Lord has, is
  giving, or will share with us
• The Lord through the Prophet Joseph Smith 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. (DC 10413)
• The Lord through the prophet Brigham Young said
• Thou shalt be diligent in preserving what thou
  hast, that thou mayest be a wise steward for it
  is the free gift of the Lord thy God, and thou
  art his steward. (DC 13627)

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Principle 3 Agency

• 3. We were given agency by a loving Father
• President Marion G. Romney commented
• Agency means the freedom and power to choose and
  act. Next to life itself, it is mans most
  precious inheritance. (Ensign, May 1976, p. 120.)
  
• President David O. McKay
• Next to the bestowal of life itself, the right
  to direct that life is Gods greatest gift to
  man. Freedom of choice is more to be treasured
  than any possession earth can give (italics
  added, in Conference Report, Apr. 1950, p. 32
  italics added).

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Principle 4 Accountability

• 4. Accountability We are accountable for every
  choice we make
• The Lord through the prophet Joseph stated
• 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. (DC
  723)
• Elder Todd Christofferson recently stated
• We control the disposition of our means and
  resources, but we account to God for this
  stewardship over earthly things. (D. Todd
  Christofferson, Come to Zion, Ensign, November
  2008. )

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What is Really Ours?

• Elder Neal A. Maxwell stated
• The submission of ones will is really the only
  uniquely personal thing we have to place on Gods
  altar. The many other things we give, brothers
  and sisters, are actually the things He has
  already given or loaned to us. However, when you
  and I finally submit ourselves, by letting our
  individual wills be swallowed up in Gods will,
  then we are really giving something to Him! It is
  the only possession which is truly ours to give!
  (italics added, Swallowed Up in the Will of the
  Father, Ensign, Nov. 1995, 22.)

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Lessons Learned

• Recognize the source of our blessings
• Put the Lord firstbecause it is all His
• Realize we are stewards over all our earthy
  blessings
• Realize that we will be held accountable for all
  we have and arefor each dollar that passes
  through our hands as well

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Making the Most Tips (1)

• Realize financial matters are spiritual matters
• Put your financial life into a correct
  perspective
• Think not only about what you are spending, but
  whos you are spending
• Would God be pleased with how you are using His
  resources?
• Put your spending into a correct perspective
• If you are contemplating going into debt,
  realize
• You are spending your retirement or your
  childrens education and mission money
• You are disobeying Gods commandments to stay
  out of debt

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a full tithe and generous offerings

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2. Pay a Full Tithe and Generous Offerings

• The foundation of provident living is the law of
  the tithe. The primary purpose of this law is to
  help us develop faith in our Heavenly Father and
  His Son, Jesus Christ. Tithing helps us overcome
  our desires for the things of this world and
  willingly make sacrifices for others. Elder
  Robert D. Hales, Becoming Provident Providers
  Temporally and Spiritually, Ensign, May 2009,
  710.

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Lessons Learned

• Realize paying tithing is a test of our faith,
  not our pocketbook
• Do we have the faith to put Him first?
• If He really fed the 5,000 and 7,000, healed the
  sick, and brought the dead to life, could He not
  also calm our troubled storm?
• Are we willing to do what He requires?

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Making the Most Tips (2)

• Resolve to pay the Lord first
• Paying tithing and offerings first, shows you
  have your priorities in order
• Pay your tithing after every paycheck
• If I wait till the end of the year, it may not
  happen
• You can also pay your tithes and offerings with
  appreciated securities
• That is, if you have any left after last year
• However you decide to do it, just do it

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a full tithe and generous offerings
• Develop and Live on a Budget like your financial
  life depended on itit does

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3. Develop and Live on a Budget

• Contrary to popular belief, you cannot spend
  yourself into financial security (although the
  government is trying hard to prove this wrong)
• If you keep doing what you have always done, you
  will keep getting what you have always got.
• Albert Einstein is alleged to have said It is
  the height of insanity to continuing to do the
  same thing and expecting a different result.
• Financial security only comes to those who live
  on less than they earn

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Develop and Live on a Budget (continued)

• On this subject, President Spencer W. Kimball
  said
• Every family should have a budget. Why, we would
  not think of going one day without a budget in
  this Church or our businesses. We have to know
  approximately what we may receive, and we
  certainly must know what we are going to spend.
  And one of the successes of the Church would have
  to be that the Brethren watch these things very
  carefully, and we do not spend that which we do
  not have. (Conference Report, April 1975, pp.
  166-167)
• And if the Brethren watch these things very
  carefully, shouldnt we?

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I asked several bishops what self-reliance skills
the sisters in their wards needed most, and they
said budgeting.-Sister Julie Beck
Develop and Live on a Budget
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Develop and Live on a Budget (continued)

• What is the Budgeting Process?
• 1. Know what you want to accomplish
• 2. Track your spending
• 3. Develop your budget
• 4. Implement your budget
• 5. Compare it to actual spending, then make
  changes where necessary to achieve your goals

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Budgeting The Old Way
Available for Savings
Income
Expenses
Tithing
Personal Goals
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Budgeting The Better Way
Other Savings
Income
Expenses
Pay the Lord
Pay Yourself
Personal Goals
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The Better Way (continued)

• Elder L. Tom Perry said
• After paying your tithing of 10 percent to the
  Lord, you pay yourself a predetermined amount
  directly into savings. That leaves you a balance
  of your income to budget for taxes, food,
  clothing, shelter, transportation, etc. It is
  amazing to me that so many people work all of
  their lives for the grocer, the landlord, the
  power company, the automobile salesman, and the
  bank, and yet think so little of their own
  efforts that they pay themselves nothing. (L. Tom
  Perry, Becoming Self-Reliant, Ensign, Nov.
  1991, 64.)

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Develop and Live on a Budget (continued)

• Elder Marvin J. Ashton stated
• 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.
  (italics added, Marvin J. Ashton, Its No Fun
  Being Poor, Ensign, Sept. 1982, 72.)

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Sample Budget
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Lessons Learned

• The spiritual and physical creation
• Law of the harvest
• Discipline in financial matters
• Prioritization
• Saving for important goals
• Sacrifice

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Making the Most Tips (3)

• Use a short term savings account to plan for
  large annual expenses such as property tax,
  Christmas, vacations, birthdays, insurance etc.
  
• Add up the expenses, divide by twelve and deposit
  this amount into a separate savings account
  monthly
• Divide expenses into fixed and variable
• Remember all expenses are variable long-term
• Be kind
• Budget in some mad money for you and your spouse
  each month
• Use the cash envelope system for expenses that
  are hard to keep within budget

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Essons Tips 3 (continued)

• Review budgets often compared with actual
  expenses at minimum weekly
• Daily is preferred
• Determine spending habits that can be changed
• Change them
• Respect different financial perspectives in your
  home
• Be sensitive to the emotions of money management
• Celebrate your progress make a spreadsheet
  charting your progress towards goals
• Celebrate when sub-goals are reached

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a Full Tithe
• Develop and Live on a Budget
• Build a reserve and start your food storage

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4. Build a Reserve and Food Storage
We are concerned that some Church members ignore
the oft-repeated direction to prepare and live
within a budget, avoid consumer debt, and to save
against a time of need. (italics added). First
Presidency Letter to the Church, February 27,
2008.
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Begin Building Your Food Storage

• Start small. Build a three month supply of food
  first that is a part of your daily diet. Expand
  that consistent with your resources and storage
  capabilities
• Purchase a few extra items each weekdont go
  into debt for food storage
• Build a longer-term supply with basic items such
  as wheat, white rice and beans

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Lessons Learned

• The spiritual and physical creation
• Planning
• The law of the harvest
• How hard it is to save!
• The hows of food storage
• Food shelf life and rotation

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Making the Most Tips (4)

• Build a reserve
• Set a reasonable reserve goal and start small.
  Try for 3-6 months of living expenses (your
  Emergency Fund)
• Use any additional or unexpected sources of
  income as savings, not a reason to spend
• Use a savings account with the highest paying
  interest rate you can find let money work for
  you
• Food Storage
• Start small with a three month supply of items
  used daily, and expand that as you can
• Use wisdom in what you use and store

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a Full Tithe
• Develop and Live on a Budget
• Build a Reserve and Food Storage
• Be modest in your expenditures

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5. Be Modest in your Expenditures

• We must remember that the adversary knows where,
  when, and how to tempt us. If we are obedient to
  the promptings of the Holy Ghost, we can learn to
  recognize the adversarys enticements. Before we
  yield to temptation, we must learn to say with
  unflinching resolve, Get thee behind me, Satan.
• Elder Robert D. Hales

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Be Modest in your Expenditures

• I urge you to be modest in your expenditures
  discipline yourself in your purchases to avoid
  debt to the extent possible. Pay off debt as
  quickly as you can, and free yourself from
  bondage. President Gordon B. Hinckley, To the
  Boys and to the Men, Ensign, Nov. 1998, 5354.

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Lessons Learned

• Needs versus wants
• Saving for goals
• The courage to say We cant afford it
• The skill of walking away
• Planning and saving for large purchases
• Learning to do without

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Making the Most Tips (5)

• Develop a love for simple pleasures or find a
  fulfilling hobby that can be done with little or
  no expense.
• Joyfully live within our means
• Limit your visits to any store
• Go with a list and stick to it (grocery store
  included!)
• Shop without kids
• Only purchase things you have planned for, can
  afford, and that will bring you closer to your
  goals

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a Full Tithe
• Develop and Live on a Budget
• Build Your Reserve and Food Storage
• Be modest in your expenditures
• Get and Stay out of Debt

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6. Get Out of Debt

• Once in debt, interest is your companion every
  minute of the day and night you cannot shun it
  or slip away from it you cannot dismiss it it
  yields neither to entreaties, demands, or orders
  and whenever you get in its way or cross its
  course or fail to meet its demands, it crushes
  you.

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If in Debt, Develop a Plan to Get Out

• Prepare and follow a debt reduction or
  debt-elimination plan
• See www.personalfinance.byu.edu Tools and
  Resources, Learning Tools, TT20 or
  www.providentliving.org for other help and
  suggestions
• Use a financial software package such as Quicken
  or Mint.com

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Debt Elimination Calendar

• J. Reuben Clark, in Conference Report, Apr. 1938,
  103.

www.providentliving.org
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Lessons Learned

• Spiritual and physical creation
• Discipline in financial matters
• Discipline
• Sacrifice
• Learning to do without
• Law of the harvest

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Making the Most Tips (6)

• Consolidate cards to a lower interest rate
• If you have cards with balances and high interest
  rates consider transferring them to a low
  interest card with a teaser rate and paying it
  off as quickly as possible
• Be careful using a home equity loan to pay off
  credit card debt.
• Most consumers will not have changed their habits
  and will be back in debt soon.

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a Full Tithe
• Develop and Live on a Budget
• Build Your Reserve and Food Storage
• Be modest in your expenditures
• Establish a debt reduction plan
• Plan for retirement

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7. Plan for Retirement

• Start planning as early as possible
• Aim to save 10-15 of your income for retirement
• Take advantage of company 401(k)/403(b) plans,
  especially if they have matching contributions
• Contribute to an IRA or Roth IRA limit is 5,000
  annually per person as of 2009

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Lessons Learned

• Law of the harvest
• Discipline
• Spiritual and physical creation
• Differences between wants and needs
• Sacrifice
• Learning to do without
• Accountability

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Making the Most Tips (7)

• Let Uncle Sam help you save
• Utilize your company 401(k)/403(b) Plans and save
  tax-deferred for retirement
• Utilize a Roth IRA or Roth 401(k)/403(b) to save
  tax-eliminated, which means you will pay no tax
  when you take the assets out at retirement.
• Set a goal to set aside a certain percentage of
  your income for retirement
• If you dont save for retirement, no one else will

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a Full Tithe
• Develop and Live on a Budget
• Build a Reserve and Food Storage
• Be modest in your expenditures
• Get out of Debt
• Plan for Retirement
• Pay off home mortgage as soon as you can

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7. Pay Off Your Home Mortgage

• We have been counseled again and again concerning
  self-reliance, concerning debt, concerning
  thrift. When I was a young man, my father
  counseled me to build a modest home, sufficient
  for the needs of my family, and make it beautiful
  and attractive and pleasant and secure. He
  counseled me to pay off the mortgage as quickly
  as I could so that, come what may, there would be
  a roof over the heads of my wife and children. I
  was reared on that kind of doctrine. (Gordon B.
  Hinckley, The Times in Which We Live, Ensign,
  Nov. 2001, 72.)

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Lessons Learned

• Time Value of money
• Understanding mortgages
• Understanding the mortgage process
• Law of the harvest
• Discipline in financial matters
• Saving for goals
• Prioritization

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Making the Most Tips (8)

• Utilize low interest rates to refinance if it
  makes sense
• Consider a 15 year mortgage or pay extra
  principal monthly to reduce principle on your
  mortgage
• Start small but think ahead
• Add 50 to your principal each month the first
  year, 100 the second year and add 50 more each
  year until you are at 400 additional principal
  each month in year eight. Continue paying 400
  extra with each payment (you will save 11 years
  and 92,000 in payments for a 200,000 loan at
  6)
• Aim to have your home paid for at retirement

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a Full Tithe
• Develop and Live on a Budget
• Build Your Reserve and Food Storage
• Be modest in your expenditures
• Establish a debt reduction plan
• Plan for retirement
• Pay off home mortgage as soon as you can
• Save for childrens education and missions

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Ways to Pay for College and Missions

• There are good and better ways to pay for college
  and missions. Utilize the better ways.
• State 529 education plans (gives you an
  additional deduction on state income tax in some
  states)
• Coverdell education plans (have a large variety
  of investment options)
• Missionsjust save

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Lessons Learned

• Time Value of money
• Law of the harvest
• Discipline in financial matters
• Saving for goals
• How to invest wisely
• Sacrifice
• Putting family first
• Learning to do without

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Making the Most Tips (9)

• Realize the choice to save for missions and
  education is an individual one
• Get the tax breaks when saving for education
• Utilize 529 Savings Plans and Education IRAs
  (Coverdell)
• There are no tax breaks for saving for missions
• Save wisely and tax efficiently

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Making the Most of Your Financial Resources

• Remember the Principles
• Pay a Full Tithe
• Develop and Live on a Budget
• Build Your Reserve and Food Storage
• Be modest in your expenditures
• Establish a debt reduction plan
• Plan for retirement
• Pay off home mortgage as soon as you can
• Save for childrens education and missions
• Develop good financial habits and teach them to
  your children

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Develop Good Financial Habits and Teach them to
your Children

• Too many of our youth get into financial
  difficulty because they never learned proper
  principles of financial common sense at home.
  Teach your children while they are young. Teach
  them that they cannot have something merely
  because they want it. Teach them the principles
  of hard work, frugality, and saving. Joseph B.
  Wirthlin, Earthly Debts, Heavenly Debts,
  Ensign, May 2004, 40)

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Lessons Learned

• The best thing you can do for your children is to
  be a good example of a wise financial steward
• Teach them about finances consistent with their
  age and intellect
• Teach them to work
• Help them to work for what they get
• Be an example of the principles you teach

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Lessons Learned

• Responsibilities as parents
• Law of the harvest
• How to teach financial matters
• Discipline in financial matters
• Saving for goals
• How to invest wisely
• Sacrifice
• Learning to do without

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Making the Most Tips (10)

• Teach children early the importance of work
• Help them to see the relation between money and
  work
• If you decide on an allowance, tie it to
  responsibilities in the home
• Realize that if you do not teach your children
  correctly, society willand it wont be pretty

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Summary

• 1. Remember the Principles
• 2. Pay a Full Tithe
• 3. Develop and Live on a Budget
• 4. Build Your Reserve and Food Storage
• 5. Be modest in your expenditures
• 6. Establish a debt reduction plan
• 7. Plan for retirement
• 8. Pay off home mortgage as soon as you can
• 9. Save for childrens education and missions
• 10. Develop good financial habits and teach them
  to your children

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Summary

• You are likely thinking two questions
• How can he talk about stretching resources when
  everything he recommends uses money?
• Are there no easy choices I can make where I
  dont have to change my spending habits?
• I go back to the Brother of Jared
• The Lord was in the stones and the storm.
• One was easier than the other, but both
  accomplished what the Lord set out to accomplish
• What is the Lord trying to teach you through this
  storm?

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Decisions Determine Destiny

• I cant stress too strongly that decisions
  determine destiny. You cant make eternal
  decisions without eternal consequences.
• Thomas S. Monson, CES Fireside for Young
  Adults, November 6, 2005, BYU.

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What We Learn From the Storm

• What we learn now, in our present circumstances,
  can bless us and our posterity for generations to
  come. Elder Robert D. Hales, Becoming
  Provident Providers Temporally and Spiritually,
  Liahona, May 2009, 710

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Tools to Help with Personal Finance

• The BYU Marriott School Personal Finance Website
  is a great and free resource
• We have prepared a website of Personal finance
  information from a gospel perspective to help you
  to know, go, and show the way. It is at
• http//personalfinance.byu.edu
• It contains a number of beginning, intermediate,
  and advanced courses, with its purpose is to help
  students and non-students get their financial
  houses in order. All information from the
  website is freely shareable with others without
  cost.

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BYU Website
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BYU Website
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BYU Website
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Thank You

• I leave you with my excitement, my testimony of
  the gospel, and one of my favorite scriptures,
  DC 4562
• For verily I say unto you,
• that great things await you.
• For they truly do as you continue to
• Make the Most of your Financial Resources