Finance Pillar - The Very Beginning

In the musical, "The Sound of Music," Maria teaches the Van Trapp children how to sing.  To begin her lesson she starts with these words, "Let's start a the very beginning, a very good place to start."  That's where I'm going to start today with this week's post.

The beginning of every good financial plan is a budget.  Budgeting is so extremely important to get right, that until you get that down you shouldn't move forward with anything else (attention Washington...).  But what exactly is a budget?  My favorite definition of a budget comes from John C. Maxwell.  He says, "A budget is telling your money where to go instead of wondering where it went."  So many people wonder at the end of the month where their money went.  If you have a good budget that shouldn't even be a question.

So what constitutes a good budget, and what are the steps to getting there?

1. Sit down and make your budget with your spouse.  The wonderful thing about marriage is that there are two brains in the equation.  The hard thing about marriage is that there are two brains in the equation.  Anyone who has been married longer than the "honeymoon" period can tell you that living with another person can be so rewarding, yet so difficult.  Sometimes it's hard to understand that other people think other things are important than what we think are important.  But when we sit down together with our spouse, have an adult conversation, and both make compromises, a budget can be a wonderful thing.  Both parties are on the same page, have a common goal, and life is just so much sweeter.  Bottom line: until you both sit down and make a plan together, your budget is doomed to failure.
2. Write down your Monthly Income.  You need to know how much you make.  For most people this amount is the same, or at least very close, every month.  Write down the days that that money will come in, and the amounts.
3. Write down Reoccurring Expenses.  Every month you have certain bills that will always be there, and will always be about the same amount.  These include mortgage payments/rent, utility bills, insurance premiums, car payments, etc.
4. Write down monthly expenses that could vary.  This could include date nights, food, gasoline, clothing expenses, etc.  Notice that I include food and gasoline.  Set a certain realistic amount of money you are going to spend on these things.  Don't just wing it.  If you set that a certain dollar amount, a magical thing happens, you'll stay within that amount.
5. Write down expenses that don't occur every month.  There are things that don't happen every month.  Things like Birthdays, Christmas, Vacation, Annual insurance premiums, etc.  Save up for these so they don't catch you by surprise when they come.  For example, many people pay for car insurance once a year.  That could be a big surprise when it comes in the mail for some people.  To keep that from happening split it up into "monthly payments," and put it in an envelop or something until it comes.  So if I paid $600 a year for car insurance, I would put $50 a month in an envelop in my sock drawer until the bill came around.
6. Add it all up.  Now, add up all your expenses and subtract it from your income.  If the number is negative than it's time to start during some surgery.  You need to go back to your budget and figure out how to get it positive.  Whether that means increasing you income by getting a second or new job, or decreasing your outgo by cutting stuff out, you need to get it at least to zero.  And no, a credit card is not the way to do that.
7. Record and revise.  For the next month record your spending.  You do this for two reasons.  First, it helps keep you accountable to yourself and your spouse.  Second, you might have not planned right; maybe you didn't need to put aside $100 a month for chocolate covered peanuts.  This gives you the data that you need to revise your budget next month.  After a few months, you and your spouse should get things down.

It's as easy as that.  To make a budget work remember a few things:

1. Stick with the budget.  If you go through all the effort to make a budget, then the next day completely go out of bounds, then you haven't accomplished anything.
2. A good budget is simple and not time consuming.  I love spreadsheets.  Love them, love them, love them.  I might name the second child Excel.  But, my wife doesn't.  Keep your budget as simple as possible.
3. It must be written down.  Just like any goal, if it's not written down it's not official.
4. There must be compromise, both parties must feel like they win.  Remember, there are two people to this marriage with different needs and wants.  Staying within your budget, make it so both people feel like they win something with the budget.
5. Remember to have fun.  Plan fun money.  If you don't, your budget will become a source of pain, not joy.  A person in pain gets rid of the pain as soon as possible.  So make sure you budget in fun money.

There is so much more I wanted to write, but it's already getting too long.  If you have any questions, write me a comment on this post, and I'll do my best to answer it.  Until next week, God bless.

Zach

Example Budget
Item	Amount
Monthly Income	$3600
Tithing	-$400
Mortgage	-$800
Utilities	-$250
Cell Phone	-$200
Food	-$400
Gas	-$500
Debt Payment	-$400
Transfers into Savings	-$150
Car Insurance	-$100
Life Insurance	-$100
Date Night	-$100
Monthly Clothing Savings	-$50
Christmas Savings	-$100
Vacation	-$50
Left over at end of month	$0

Spiritual Pillar - Family Scripture Reading and Life

Today we were able to listen to Elder Todd Christofferson, a member of the Twelve Apostles of the Church of Jesus Christ of Latter Day Saints.  He, along with a couple other speakers, said a few things that I would like to repeat about the family.

The first speaker I'd like to mention is Elder Brent Nattress.  He told a story about how his mother read from the scriptures every morning while he and his other siblings ate breakfast.  Being a "smart adolescent" at the time, he didn't think he needed to listen to his mother's readings, and would instead read the back of the cereal box.  One day he approached his mother and asked why she read every day.  Furthermore, he explained to her that he didn't listen to her, and that it was just a waste of time.  While many, including myself, would say the miracle of this story is that he lived to see the next day, what she said next is the real lesson.  She said that in a conference many years prior, Elder Marion G. Romney promised that if those in attendance read the scriptures every day with their family, they would not lose a single child.  She explained that she didn't want to lose one child, even her mouthy son that she was speaking to, and that is why she read to her children every morning.

After Elder Nattress spoke, Elder Christofferson finished off the meeting.  He also quoted Elder Romney with a similar quote.  He said that if as families we read the scriptures every day it will decrease the conflict in the home.

These two promises are something we all can have by obeying such a simple concept.  We're not talking about hours of study every day, rather a few minutes with our family.   This simple action will bring peace in our homes, strengthen every member of the home, and bless us more than any of us probably understand.

I want to mention one other important thing I learned from Elder Christofferson.  He said he wasn't worried about those in attendance filling their lives with bad things.  He said he was more worried about us filling our lives with good things.  He went on to explain that there are a lot of good things out in the world.  Things like football, dance lessons, hanging out with good friends, etc., but, do we do too many good things?  He taught that the Savior should be the center of our lives; but, often when we are doing all these good things the Savior gets put aside.  He said wouldn't it be great if we could peel life away and start over again with the Savior in the center?

How would that look like with the Savior in the center of our life?  With the Savior as the center how would we act, look, talk, spend our time?  He didn't say give up all those other good things; rather, to put the Savior in the center first, and then fill up the rest of our time with those good things again.  We could still go see a game, take our family to the movie, go to the park, go to ballet, etc.  But life would be so much fuller, so much more rewarding if kept the Savior centered in our life.

I challenge you and I over the next month to focus on reading scriptures as a family.  This will help you peel back life and put Christ in the center again.  Also, let us center our lives around Christ as we go about doing all our other good things of life.

Thanks, see you next week.