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:
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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.
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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
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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 earth20, the
creator of worlds, men, and all things21, the supplier of our breath, the giver of our knowledge22,
the giver of our life23, 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
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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.
The How’s
The final question to answer is the “how’s” of personal and family finance, the practical
application. Now that we understand the doctrines and principles, the “why’s” and the “what’s,”
it should help us with the application, or the “how’s.” What are the things we should be doing to
get our financial houses in order? After review of the scriptures, counsel from Church leaders,
and discussions with bishops, stake presidents, academics, and practitioners, we suggest eight
key areas which are critically important for us to follow in becoming wiser financial stewards
and in getting and keeping our financial houses in order.
1. Pay the Lord first in tithes and offerings
Tithing is the primary law upon which financial blessings are predicated. If we pay a full tithing
and are generous with offerings, we are promised that the windows of heaven will be opened.29
What is a full tithing? The First Presidency gave the following definition of tithing: “The
simplest statement we know of is the statement of the Lord himself, namely, that the members of
the Church should pay ‘one-tenth of all their interest annually,’ which is understood to mean
income. No one is justified in making any other statement than this.”30
For husbands and wives with regular monthly income, making out the first check each month to
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the Church for tithing is a reflection of their united faith. While there is no promise that the
blessings will immediately be financial, they will be the blessings we need, nonetheless. We
should always remember, as the scriptures remind us, that “when we obtain any blessing from
God, it is by obedience to that law upon which it is predicated.”31 And obedience is the first law
of heaven.32
2. Create and use a budget
Budgeting is the process of pondering, planning, setting goals, and following through on our
financial plans and goals. Most budgets include a monthly plan for expenditures by category (e.g.,
tithing, investments, food, housing, clothing, insurance, medical, cars, entertainment, etc.) and then
an annual budget for other items. The amounts in a monthly and annual budget should be less than
the net income available. When followed, a well-designed budget helps keep us out of debt.
If we have a family, we develop our budget with our spouse and may include the input of children
as well. In essence, a budget is the spiritual creation first (as we plan our expenses), followed by
the physical creation next (as we spend according to the plan). In a family, it is important to review
expenses regularly, perhaps weekly, to assess the current status of the budget.
A living prophet counseled:
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.33
If one of the reasons for the financial success of the Church is that of living within a budget,
shouldn’t we do the same individually and in our families?
3. Avoid debt
We have repeatedly been counseled to avoid debt wherever possible. President Monson recently
wrote, “We urge you to be modest in your expenditures; discipline yourselves in your purchases
to avoid debt. Pay off debt as quickly as you can, and free yourselves from this bondage.”34 The
only exception to this counsel is debt for a modest home, for education, and perhaps for modest
transportation (if needed). Consumer debt should be avoided like the plague. President Ezra Taft
Benson counseled: “The Lord desires his Saints to be free and independent in the critical days
ahead. But no man is truly free who is in financial bondage.”35
If you and your family find yourselves in debt, then be smart about eliminating indebtedness.
Stop unnecessary spending. Follow a debt elimination calendar and cut spending wherever
possible to make this happen. Think of debt reduction as an investment with the highest possible
returns and no risk. Cut up cards and close accounts if they are too great a temptation. And work
to pay off all debt, including mortgage and education debt, as you save for your other long-term
goals.
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4. Prepare for emergencies and build a reserve
A family will have greater peace of mind and will be more insulated from unexpected financial
difficulties if they build a financial reserve to act as a cushion for rough times. Most financial
planners recommend 3 to 6 months’ worth of living expenses be set aside in a savings account or
money market fund. That money, then, is ready to be used immediately, when truly needed.
These emergency funds should be held in reserve for major unexpected needs—lost job, hospital
or medical bills, major home or car repairs, travel to a funeral, etc. In addition to a cash reserve,
it is important to be prepared in other ways: build up appropriate food storage and assemble 72hour kits, first aid, and other emergency essentials to prepare against a time of need.
5. Save and invest for short- and long-term goals
After a reserve is built, a husband and wife should agree on, and begin saving for, short- and
long-term goals. Some short-term goals may include the down payment to buy a home, to
purchase a newer vehicle, or to buy furniture. It is gratifying to work together and sacrifice as a
couple to save for these short-term goals.
Most couples will set the short-term goal to own their own home. It is appropriate to borrow for
a modest home, but be cautious. A mortgage is the likely largest financial obligation you will
take on, and it will be a burden on your shoulders until the day it is paid. President Gordon B.
Hinckley’s advice was to “get a modest home and pay off the mortgage,”36 the same advice he
received from his father. Try not to be “house rich and cash poor.”
A long-term goal that most couples have is retirement. A couple should decide together to save
for retirement and understand their available options. If your employer offers a matching
contribution to a 401k, always contribute enough to get the full match. If your employer does not
offer a 401k, then consider investing in an IRA. Until you make a substantial income, it is
usually advisable to choose a Roth 401k or Roth IRA rather than the traditional 401k or IRA.
When you are young, invest in primarily stock-based, diversified mutual funds consistent with
your ability to tolerate risk. Invest for the long term, and don’t try to time the market.
6. Protect yourself and your family through adequate insurance
Without insurance, major financial setbacks could wipe out decades of savings. Adequate
insurance that protects major investments provides a family peace of mind. Elder Marvin J.
Ashton counseled:
Appropriately involve yourself in an insurance program. It is most important to have
sufficient medical, automobile, and homeowners insurance and an adequate life insurance
program. Costs associated with illness, accident, and death may be so large that uninsured
families can be financially burdened for many years.37
Once you have someone who is dependent upon you for income, you have a moral obligation to
get life insurance. You should have enough insurance to replace your income for long enough to
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raise your children and for your spouse to be financially self-sufficient. Some financial planners
recommend 8-12 times your gross salary. In general, term life insurance is preferable to whole
life insurance to obtain this coverage. In addition, be sure to have adequate insurance against
other catastrophic losses as your financial stewardship increases. This should include, at a
minimum, health, auto, life, and homeowners/renters insurance.
7. Open communication about finances
Open, transparent financial communication between husband and wife is critical to managing
finances effectively. Husband and wife should each communicate about and agree to live within
the family budget. Communication plays an important part as the couple works together and
agrees upon financial goals. Major purchases require open communication so that each
understands and agrees to these important financial decisions. Hide no assets or liabilities from
each other.
Regarding open financial communication in marriage, Elder Marvin J. Ashton wrote:
Management of family finances should be full and equal and mutual between a husband
and a wife. Control of the money by one spouse as a source of power and authority
causes inequality in a marriage and is inappropriate. Conversely, if a marriage partner
voluntarily removes himself or herself from family financial management, that is an
abdication of necessary responsibility.38
Since family finance is a sacred stewardship, our communication with God through prayer is
critical at every juncture. We have been promised that if we are humble, “the Lord thy God shall
lead thee by the hand, and give thee answer to thy prayers.”39 We also have the promise from
Nephi that “the Lord giveth no commandments unto the children of men, save he shall prepare a
way for them that they may accomplish the thing which he hath commanded them.”40 This
promise even includes divine help with our finances.
Christ-like attitudes and relationships toward money based on the doctrines and principles
discussed above should be developed by all individuals and couples as they come closer to the
Savior, work on common individual and family goals, and put their financial lives together as a
couple.
8. Teach your children and family
It is essential that we teach our children to manage money. Teach family members why we want
to be financially responsible, specifically the “why’s” and the “what’s.” Teach them to set and
achieve goals, and let them see you doing the same. Teach them the principles of financial
management and show them how you apply it in your life. Involve them in creating their own
budgets and in the family budgets as well, and in saving and sacrificing to achieve individual and
family goals consistent with their age and abilities. Teach the principles of hard work, frugality,
and saving, and stress the importance of obtaining as much education as possible. And teach
through your example, the most powerful method and teaching tool available.
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Summary
Mastering these inspired financial doctrines, profound financial principles, and practical financial
applications is essential for each and every accountable child of God. We started with
perspective, how we can either take an eternal perspective or the world’s materialistic
perspective in managing our finances. The eternal financial perspective is simply applying the
gospel of Jesus Christ in our lives and applying Christian principles in our finances. The world’s
perspective is any other viewpoint. We then discussed a framework for learning, which included
the “why’s”, “what’s”, and “how’s” of personal finance, the doctrines, principles, and
application. This framework is important for us to understand and follow as we work toward
getting our individual and family financial lives in order.
In summary, we choose with every dollar we spend which perspective we take, either the eternal
perspective or the world’s materialistic perspective. The sooner we make the connection between
our finances and our living the gospel of Jesus Christ, the greater will be our motivation to obey
the commandments and to get and keep our lives and financial houses in order with respect to
God. God has promised He will not give us a commandment unless he prepares a way for us to
fulfill it.41 We know that includes the commandments relating to the things we should be doing
with our personal and family finances. Understanding the why’s, what’s, and how’s of personal
finance, the doctrines, principles, and application, is critical to that motivation. With this eternal
perspective, we can be laying up for ourselves true “treasure in heaven”42 at the same time we
are planning for and supporting our families and careers.
1
I Timothy 6:10
Matthew 6:20.
3
Matthew 7:25
4
2 Nephi 9:51.
5
D&C 4:5.
6
Italics added, David A. Bednar, Act in Doctrine: Spiritual Patterns for Turning From Self to the Savior, Deseret
Book, Salt Lake City, Utah, pp. xiv-xv.
7
Joshua 24:15
8
“All is Safely Gathered In: Family Finances,” First Presidency Message, 2007.
9
Moses 1:39.
10
John 14:6.
11
C. Max Caldwell, “What Think Ye of Christ,” Ensign, Feb. 1984.
12
D&C 72:3-4.
13
D&C 4:5.
14
Conference Report, Apr. 1935.
15
Matt 16:26.
16
Gordon B. Hinckley, “The Family: A Proclamation to the World,” Ensign, October 1995.
17
“Trust in the Lord,” Ensign Mar. 1986.
18
“The Power of Correct Principles,” Ensign, May 1993.
19
Psalms 24:1.
20
John 1:3.
21
D&C 93:10.
22
Moses 7:32.
23
Mosiah 2:26.
24
Mosiah 2:21.
25
D&C 104:13.
2
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26
D&C 82:3.
Conference Report, Apr. 1950.
28
D&C 72:3.
29
Malachi 3:10.
30
First Presidency letter, 19 Mar. 1970).
31
D&C 130:21.
32
Bruce R. McConkie, Mormon Doctrine, p. 539.
33
Spencer W. Kimball, April Conference, 1975, pp. 166-167.
34
Thomas S. Monson, Ensign, 2014
35
Ezra Taft Benson, “Prepare Ye,” Ensign, Jan. 1974, p. 69.
36
“Living Worthy of the Girl You Will Someday Marry,” Ensign, April 1998.
37
Marvin J. Ashton, “Guide to Family Finance,” Liahona, Apr. 2000, 42.
38
Marvin J. Ashton, “One for the Money,” Intellectual Reserve, 2006, p. 3.
39
D&C 112:10.
40
1 Nephi 3:7.
41
1 Nephi 3:7.
42
Helaman 5:8.
27
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