Conversely, if a marriage partner voluntarily removes himself or herself entirely from family financial management, that is an abdication of necessary responsibility. Learning how to discipline oneself and exercise constraint where money is concerned can be more important than courses in accounting. 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. 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.
Living on a budget
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. 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. 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.
Some financial rewards to children may also be tied to educational effort and the accomplishment of other worthwhile goals. 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.
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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. 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. 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. 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. Costs associated with illness, accident, and death may be so large that uninsured families can be financially burdened for many years. 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.
How to Manage Family Finances (with Pictures) - wikiHow
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. Accumulate your basic food storage and emergency supplies in a systematic and orderly way.
Avoid going into debt for these purposes. Beware of unwise food storage promotional schemes.
One For the Money: Guide to Family Finance
Planting and harvesting a garden annually is helpful to the family in many ways, including the food budget. Eat nutritious foods and exercise appropriately to improve health, thus avoiding many medical costs.
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These few points and suggestions are not intended to be all-inclusive or exhaustive. When you and your family are just starting out nothing is more important than to establish a financial plan for savings and long-term financial solidarity.
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