Debt Free Spending Seminar

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Debt Free Spending Seminar

• Financial Self-reliance
• Helping Teachers Help Others
• Become Wiser Financial Stewards
• Keith Russell and Bryan Sudweeks, Ph.D., CFA.
• From the BYU MSM web site
• Personal Finance Another Perspective
• at http//personalfinance.byu.net
• Eight Lessons in Financial Self-reliance

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Abstract

• There is a great need for dedicated financial
  specialists to help members of the Church and
  others understand how to become wiser financial
  stewards. The purpose of this Seminar is to
  teach teachers to how to implement this framework
  in their lives. Then once they are secure in
  that knowledge and framework, they can use that
  knowledge to help others in their wards, stakes,
  and communities do the same.

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Objectives

• 1. Understand the framework for this program
• 2. Understand the principles of family finance
• 3. Understand the purpose and learn to use the
  Debt Free Spending Spreadsheet to
• Determine when you will be out of debt
• Develop a one-year Spending Plan
• Develop twelve one-month Spending Plans
• 4. Learn about other resources, including the
  MSM Personal Finance website

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1. Understand the Program Framework

• We have developed an eight lesson program on
  personal finance that could be taught in a Sunday
  setting
• These materials include lesson plans, readings,
  handouts, and spreadsheets to aid in the teaching
  process
• The purpose of these lessons is to help members
  become wiser financial stewards
• These eight lessons have already been taught in
  different wards and are being reviewed by faculty
  at BYUs Marriott School of Management

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Program Framework (continued)

• These lessons include a Debt Free Spending
  spreadsheet to help members understand,
  recognize, and plan their spending activity
• Because of the need for more time outside of the
  Sunday lessons, we are teaching this spreadsheet
  in a separate seminar from the normal lesson
  schedule
• This versatile spreadsheet can be used as part of
  the eight lessons or independently as well
• We are trying to develop a program which is
  scalable to the needs and constraints of wards,
  stakes, and communities

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Understand the Principles of Family Finance

• Are there principles, which if understood, will
  help us in the financial decisions we make in
  life?
• Has Heavenly Father given us guidance to help us
  in our financial decisions?
• Are there principles which underlie that
  guidance?
• What are those principles?

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Principles of Family Finance (continued)

• Principle 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) and our
  life (Mosiah 222), and all we have and are
  (Mosiah 221).
• Nothing we have is our ownits all Gods

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Principles of Family Finance (continued)

• There should be no feeling of pride for the
  things we have, are, or will become
• These things do not belong to us, but are on loan
  from a loving Father
• Our blessings should encourage greater obedience
  to Gods commandments as we realize they are
  gifts from a loving Father in Heaven
  (Ecclesiastes 519) and as we try to thank Him
  for the things He has blessed us with

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Principles of Family Finance (continued)

• Principle 2 Stewardship
• We are stewards over all that the Lord has, is,
  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 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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Principles of Family Finance (continued)

• We are stewards, not owners, over the things we
  possess
• As stewards, it is our responsibility to learn
  everything we can about our stewardship
• The purpose of this Seminar is to help you
  understand and teach others to manage that
  stewardship better, that we all might be
  approved in all things, and be accounted as wise
  stewards. (DC 7222)

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Principles of Family Finance (continued)

• Principle 3 Agency
• The gift of choice is mans most precious
  inheritance
• 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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Principles of Family Finance (continued)

• Agency is one of the greatest gifts of God.
• Instead of using this gift wrongly, we should do
  all in our power to make wise choices
• And then we should thank a loving Father and Son
  for this wonderful right to chooseand then use
  that agency wisely!

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Principles of Family Finance (continued)

• Principle 4 Accountability
• 4. Accountability We are accountable for every
  choice we make
• The Lord through the prophet Joseph stated
• Verily I say, men should be anxiously engaged in
  a good cause, and do many things of their own
  free will, and bring to pass much righteousness.
  For the power is in them, wherein they are agents
  unto themselves. (DC 58 27-28)
• 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)

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Principles of Family Finance (continued)

• While the blessing of agency is an unconditional
  gift from God, how we use that gift shows how
  much we love Him and His Son
• We will all be held accountable for our use of
  our agency
• We should do all in our power to use our choices
  wisely

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Principles of Family Finance (continued)

• 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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Learn to use the Debt Free Spending Spreadsheet

• There are three objectives for this time
• a. Learn how long it will take you to get out of
  debt if you are in debt
• b. Learn how to develop and use a One-year
  Spending Plan
• c. Learn how to develop and use twelve One-month
  Spending Plans

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Debt Free Spreadsheet

• There are five parts to this spreadsheet
• 1. Plan Develop a spending plan for one month.
  Input your debt, interest rates, minimum
  balances and the spreadsheet determines how many
  months until you will get out of debt
• 2. Prioritize Determine which debts you want
  to emphasize and pay off first
• 3. Spend Develop a one-year Spending Plan where
  you spend your money a year in advance
• 4. Record Record twelve one-month Spending
  Plans of your actual versus planned spending
• 5. Evaluate Determine how well you did last month

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1. Plan

• Plan your spending for the next month
• Use your bank statements and receipts to
  determine where your committed money is going
• Determine your income and expensesspend it
  before you get it
• Change the labels in the categories for income
  and expenses to fit your situation
• The spreadsheet contains general recommendations
  which may be useful in the US and Canada.
• Change them as you see fit to make the program
  fit your needs

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Plan your Income

• Formatting Framework
• Type in the labels that are most useful to you
• Inputting Data
• Type in your income for the next month
• Generally, we recommend you only input your
  spend-able income, i.e. income after taxes,
  payments to retirement plans, payments after
  deductions, etc.

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Plan your Income
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Plan Paying the Lord and Yourself
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Plan your Expenses and Debt

• Input your expenses in the correct rows and
  columns
• Debt is handled slightly differently
• Input your monthly payment into the first column
• Input your total owed in the next column
• Input your statement interest rate into the third
  column
• Input the number of months from your statement
  that tells how many more months to pay off the
  debt
• The program will calculate the number of months
  and years until you are out of debt, given your
  monthly payment by debt and by overall Plan

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Plan your Expenses
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Plan your Debt Inputting Debt
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Plan the Results -- Summary
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2. Prioritize

• Once you have input your income, expenses, and
  debt information, you must prioritize your debt
  payments
• Determine which debt to pay off first
• There are different options
• 1. Most expensive debt first (highest interest
  rate)
• 2. Smallest debt first (to free up cash the
  fastest to pay off other debts)
• The assumption of this spreadsheet is that after
  you have paid off one debt, you will not spend
  that money but use that money to continue paying
  debts until all your debts are paid

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Prioritize your Debts
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3. Spend (your Money a Year in Advance)

• Here you will prepare a one-year spending plan
• Most people spend their money too late
• Spend it one year in advance, and you will be
  better prepared for the problems which will
  inevitably come
• Suggestions
• Dont just put the same amount in each month
• Use your time to plan carefully each line of each
  category

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Spend your Money in Advance
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4. Record your Spending

• Record the results of your spending for each of
  the twelve months of your Spending Plan or Budget
• Input your spending each day or week at the
  latest
• Keep good records of all spending
• Suggestions
• Write in your spending each day. Look how you
  are doing against your goal

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Record your Spending
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5. Evaluate

• Evaluate how well you did over the last twelve
  months
• What did you do well on?
• What can you do to do better?

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4. Introduce the MSM Web site

• There are many sources of good information
• It just takes time to sort them out
• Let me add another source to your list
• The BYU Marriott School of Managements Personal
  Finance website at
• http//personalfinance.byu.net

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Home Page
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Individual Lessons
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Recommended Courses of Study
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8 Basic Lessons (with lessons, readings,
spreadsheets, handouts, FHE lessons, etc.)
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Personal Finance Manuals
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Tools and Resources
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Summary

• 1. Do you understand the framework?
• 2. Do you understand the Principles of Family
  Finance
• Ownership Everything is the Lords
• Stewardship We are stewards over everything
  that we have
• Agency This is one of Gods greatest gifts
• Accountability We will be held accountable for
  how we use the things we have been blessed with,
  including our financial resources
• 3. Do you understand the spreadsheet?

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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.

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Thank You