Part 2-Budgeting: Building "A House of Order"-- Recap of our February Quarterly RS Activity!

The second part of our activity focused on budgeting and getting our finances in order as a way to have more peace in our lives and have the ability to give and share with others. As mentioned during the lesson, we are all at different places financially--and that is okay.

The scriptures and general authorities teach that we should get out of debt as soon as possible and avoid debt at all costs. Debt is something that binds us down and literally makes us "servants to the lender." As we strive to live within our means, have a plan, make sacrifices, and work diligently, we can become free from the chains of debt and experience peace from knowing that we are doing what Heavenly Father would have us do. We can have peace of mind and spirit and eliminate stress and worry from our lives as we have our finances in order and are able to take care of our family's temporal needs. We can then share and give to others more abundantly when we do not owe the bank, Visa, or Sallie Mae! ;)

As discussed in our lesson, every specific aspect one program or way of managing finances will not necessarily apply to every person or family--everyone is different. Take bits and pieces of what works for you. Some people are more disciplined and are able to use credit cards as a way to build points--and then pay them off completely each month by using money in their account and therefore not accruing debt. For others, that may not be the best option, and using cash (and debit cards) feels like the best way. Another way to manage over spending is to use the cash envelope system for categories such as entertainment, food, clothing, and gas.

Most importantly, we have been instructed by our Heavenly Father to live within our means and get our finances in order. It may feel overwhelming, stressful, and hopeless at times. But it is possible! Trust in the help that will come as we trust in Heavenly Father and seek His help.

Here are some ideas that were shared at our meeting. And as mentioned that night, much of the information was taken from Dave Ramsey, and you do not have to agree or follow everything he says. Read, learn more, give it a try, and figure out if it works for you.

For more information, check out Dave Ramsey online.

Here is one of the books mentioned as well: The Total Money Makeover

Tips and Ideas that will lead to Financial Peace---

all taken from Dave Ramsey’s Financial Peace University program.

~Put God first--everything we have comes from Him! Tithing always comes first. Pray for help!

~Budget--- Have a plan! (Give-Save-Spend)

            -Make a new budget each month, as some expenses vary month to month.

            -Spend all $ on paper before the month begins—know where your money is going!

            -Use cash/envelope system for certain categories such as food, clothing, and entertainment.

~Avoid using credit cards—use cash or debit cards instead!

~Have an emergency fund so that you do not have to rely on credit or borrowing from family/friends during unexpected emergencies.

~Save ahead of time (a little bit month to month) for upcoming expenses or items you would like to purchase—that way you can pay in cash and it doesn’t rock the budget.

~Get out of debt ASAP using the debt snowball—make sacrifices where necessary.

~ “If you will live like no one else, later you can live like no one else.”

~Get our lives and finances in order so that we can experience peace and then be able to live and give like never before. Once we help ourselves in this way we are free to reach out and help others.

Step 1: $1,000 emergency fund ($500 with an income of $20,000 or less). This fund is for EMERGENCIES ONLY. This is the foundation so that when emergencies arise, credit cards won't have to be the go-to! This is the beginning of peace of mind, knowing that there is money in the bank in the chance of an unexpected expense.

Step 2: Pay off Debt using the Debt Snowball! List all debts in order from lowest balance to highest (excluding house mortgage). Pay only the minimum payment due on all debts except for the lowest balance. Pay as much as possible per month on the lowest debt until it is paid completely. Then apply what was being paid on the first debt to the next, creating a snowball effect. Continue this pattern as each debt is paid off. 

Step 3: 3-6 month Full Emergency Fund.  Once all debts are paid (aside from mortgage), begin saving 3-6 months worth of household expenses. This is considered a fully funded emergency fun in the event of loss of employment or more expensive emergencies. This is separate from saving for items to be purchased. The goal is to have a full emergency fund at all times. 

Step 4: Investing-- more info here. 

Step 5: Save for Children's College Fund-- more info here. 

Step 6: Pay off House EARLY! pay more and make extra payments in order to pay off home before the original pay off date.

Step 7: GIVE. Once our family finances are fully in order, we will have more opportunities to share and give in more abundance.