Overcoming Debt

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The following list comes from a booklet produced by The Church of Jesus Christ of Latter-day Saints or Mormons. The pamphlet, based on an address by Elder Marvin J. Ashton, is entitled "One for the Money: Guide to Family Finance."

  1. Pay an honest tithing. "Successful financial management in every LDS home begins with the payment of an honest tithe."

2 Learn to manage money before it manages you. A bride-to-be would do well to ask herself, “Can my sweetheart manage money? Does he know how to live within his means?” These are more important questions than, “Can he earn a lot of money?” Financial peace of mind is not determined by how much we make but is dependent upon how much we spend.

New attitudes and relationships toward money should be developed constantly by all couples. After all, the partnership should be full and eternal. Management of family finances should be mutual between husband and wife in an attitude of openness and trust. Control of the money by one spouse as a source of power and authority causes inequality in the marriage and is inappropriate. Conversely, if a marriage partner voluntarily removes himself or herself entirely from family financial management, that is an abdication of necessary responsibility.

3 Learn self-discipline and self-restraint in money matters. Learning how to discipline oneself and exercise constraint where money is concerned can be more important than courses in accounting. Young couples should recognize that they cannot immediately maintain the same spending patterns and lifestyle as that to which they were accustomed as part of their parents’ family. Married couples show genuine maturity when they think of their partner’s and their family’s needs ahead of their own spending impulses. Money management skills should be learned together in a spirit of cooperation and love on a continuing basis.

We live in a self-indulgent, me-oriented, materialistic society. Advertisements entice young buyers by demonstrating how easy it is to get credit and buy on time. Interestingly, no ads focus on the glamour of paying the money back, nor do they mention how long or hard it is to do just that—especially with the unavoidable interest added on.

4 Use a budget. Every family must have a predetermined understanding of how much money will be available each month and the amount to be spent in each category of the family budget. Checkbooks facilitate family cash management and record-keeping. Carefully record each check when written, and balance the checkbook with the monthly bank statement.

With the exception of buying a home, paying for education, or making other vital investments, avoid debt and the resulting finance charges. Buy consumer durables and vacations with cash. Avoid installment credit, and be careful with your use of credit cards. They are principally for convenience and identification and should not be used carelessly or recklessly. The use of multiple credit cards significantly adds to the risk of excess debt. Buy used items until you have saved sufficiently to purchase quality new items. Purchasing poor-quality merchandise almost always ends up being very expensive.

Save and invest a specific percentage of your income. Liquid savings available for emergencies should be sufficient to cover at least three months of all essential family obligations. Every LDS family should file honest and timely tax returns.

Please listen carefully to this—and if it makes some of you feel uncomfortable, it is on purpose: Latter-day Saints who ignore or avoid their creditors are entitled to feel the inner frustrations that such conduct merits, and they are not living as Latter-day Saints should! Bankruptcy should be avoided, except only under the most unique and irreversible circumstances, and then utilized only after prayerful thought and thorough legal and financial consultation.

5 Teach family members early the importance of working and earning. “In the sweat of thy face shalt thou eat bread” (Gen. 3:19) is not outdated counsel. It is basic to personal welfare. One of the greatest favors parents can do for their children is to teach them to work. Much has been said over the years about children and monthly allowances, and opinions and recommendations vary greatly. I’m from the “old school.” I believe children should earn their money through service and appropriate chores. Some financial rewards to children may also be tied to educational effort and the accomplishment of other worthwhile goals. I think it is unfortunate for a child to grow up in a home where the seed is planted in the child’s mind that there is a family money tree that automatically produces cash once a week or once a month.

6 Teach children to make money decisions in keeping with their capacities to comprehend. Based upon appropriate teaching and individual experience, children should be responsible for the financial decisions affecting their own money and suffer the consequences of unwise spending. “Save your money” is a hollow pronouncement from a parent to a child. “Save your money for a mission, bicycle, doll house, trousseau, or car” makes understandable sense. Family unity comes from saving together for a common, jointly approved purpose. In our home we found it unifying to have a child save for a major project; then, when the amount was achieved, we matched it with a predetermined percentage. Incentives are a powerful force in motivating and achieving desired behavior.

7 Teach each family member to contribute to the total family welfare. As children mature, they should understand the family financial position, budget, and investment goals and their individual responsibility within the family. Encourage inexpensive, fun projects, understandable to the children, that contribute to a family goal or joy. Some families miss a tremendous financial and spiritual experience when they fail to sit together, preferably during family home evening, and each put in his or her share of the monthly amount going to the son or daughter, brother or sister, who is serving in the mission field. When this monthly activity is engaged in, all at once, he or she becomes “our” missionary, with pride becoming a two-way street.

8 Make education a continuing process. Complete as much formal, full-time education as possible, including trade schools and apprentice programs. This is money well invested. Based on potential lifetime earnings, the hours spent in furthering your education will be very valuable indeed. Use night school and correspondence classes to further prepare. Acquire some special skill or ability that could be used to avoid prolonged unemployment. The ability to do basic home and auto repairs can frequently be helpful, as well as a source of family savings. Periods of unexpected unemployment can happen to anyone. We should not allow ourselves, when we are out of work, to sit back and wait for “our type of job” if other honorable interim employment becomes available.

9 Work toward home ownership. Home ownership qualifies as an investment, not consumption. Buy the type of home your income will support. Improve the home and beautify the landscape throughout the period you occupy the premises so if you do sell it, you can use the accumulated equity and potential capital gain to acquire a home more suitable to family needs.

10 Appropriately involve yourself in an insurance program. It is most important to have sufficient medical, automobile, and homeowner’s 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.

11 Understand the influence of external forces on family finances and investments. Inflation continues to offset a major portion of average wage increases. A larger paycheck may not mean more purchasing power and should not be an excuse for extravagant purchases or additional debt. Beyond the emergency liquid savings, families should plan for and utilize a wise investment program preparing for financial security, possible disability, and retirement. Avoid all proposals for high-risk investments and get-rich-quick schemes.

12 Appropriately involve yourself in a food storage and emergency preparedness program.

For a free copy of "One for the Money: Guide to Family Finance" visit www.ldscatalog.com and look under Welfare Services: Pamphlets, Booklets, and Brochures.


Marvin J. Ashton, “Guide to Family Finance,” Liahona, Apr. 2000, 42