Learn—Maximum Time: 45 Minutes

Today’s Discussion:

Budget

Read:Congratulations on building a budget! A budget can be a powerful tool for controlling your financial situation and reducing stress in your life. In the scriptures, we learn that “truth is knowledge of things as they are, and as they were, and as they are to come” (D&C 93:24).

Discuss:How might this verse from the Doctrine and Covenants apply to your finances and the use of a budget?

Read:Knowing where your family finances really stand is essential for successful financial stewardship. Elder Joseph B. Wirthlin taught, “Those who live safely within their means know how much money comes in each month, and even though it is difficult, they discipline themselves to spend less than that amount” (“Earthly Debts, Heavenly Debts,” Ensign or Liahona, May 2004, 42).

Sticking to a budget can be difficult. It requires commitment, discipline, and perseverance—it may take several tries to get it right! As you strive to change your spending behaviors, remember to counsel with the Lord and your spouse or an accountability partner. With sustained effort and loving support, you can become more like the children who waited in the marshmallow experiment (discussed in the previous chapter).

Discuss:How can the Lord help us develop Christlike attributes, including self-discipline and diligence?

Read:Today we will discuss four principles for sticking with a budget:

1. Set realistic, motivating financial goals.

2. Find and use a budgeting system.

3. Hold yourself accountable.

4. Seek the Lord’s help, and keep trying!

1. Set Realistic, Motivating Financial Goals

Read:Goal setting is a powerful tool that helps us develop and maintain a long-term perspective.

Elder M. Russell Ballard taught, “Let me tell you something about goal setting. I am so thoroughly convinced that if we don’t set goals in our life and learn how to master the technique of living to reach our goals, we can reach a ripe old age and look back on our life only to see that we reached but a small part of our full potential. When one learns to master the principle of setting a goal, he will then be able to make a great difference in the results he attains in this life” (“Do Things That Make a Difference,” Ensign, June 1983, 69–70).

Discuss:

• How have goals helped you progress in the past?

• How is goal setting an act of faith?

Read:It is important to set financial goals that are both realistic and motivating. Throughout the next few chapters, we will learn about many financial goals and priorities, including building a one-month emergency fund, getting out of debt, building a longer-term emergency fund, investing for retirement, and saving for other worthy expenses. The following activity will help you identify which of these should be your current financial priority.

Activity (5 minutes)

Answer the questions below by yourself. The first question to which you answer “no” represents what should be your current financial priority.

What Is My Current Financial Priority?	Yes	No
1. Do I pay tithing? (See chapter 2.)	□	□
2. Do I have a one-month emergency fund? (See chapter 6.)	□	□
3. Do I have health insurance or some other access to medical care?	□	□
4. Am I free from consumer debt, like credit cards and car loans? (See chapter 7.)	□	□
5. Do I have a three- to six-month emergency fund? (See chapter 9.)	□	□
6. Am I contributing to a retirement savings fund? (See chapter 11.)	□	□
7. Am I working to eliminate mortgage and education loans? (See chapter 10.)	□	□
Write your current priority:

Read:You can choose to work toward other long-term goals in addition to your current financial priority, which may include saving for education, a mission, a car, a home, or a family vacation or other recreational expenses. There will be many temptations to choose the short-term perspective over the long-term perspective. Goals can give you a reason to say no now by giving you something to look forward to in the future.

Discuss:What motivates you personally to want to stick with your budget?

2. Find and Use a Budgeting System

Read:There are many tools and systems available to help you manage your budget and track your expenses. Effective budgeting systems range from simple pen-and-paper systems to mobile and computer applications.

There are two primary ways to pay for goods and services: cash or electronic payments. Each of these general methods has positives and negatives and will affect the way you manage your budget and track your expenses. In the next few sections, we will go over two common budgeting systems. One of your commitments this week will be to find the right system for you.

Watch:“The Envelope System,” available at srs.lds.org/videos. (No video? Read page 83.)

The Envelope System

Watch:“Digital Systems,” available at srs.lds.org/videos. (No video? Read page 84.)

Digital Systems

Activity (10 minutes)

Step 1: Divide into small groups of two to four people.

Step 2: As small groups, read from the chart below the positives and negatives associated with each budgeting system.

Step 3: Discuss additional positives and negatives you think of, and write them in the following chart.

Step 4: Come back together as a full group. Invite a member from each small group to share his or her additional positives and negatives with the whole group.

Comparing Budget Management Systems
System	Pros	Cons
Cash Envelope	Clear boundaries: you know when you have run out of budgeted money	Very manual process: need to organize your cash after every pay period; need to keep manual records
Digital Systems	Real-time information about your budget	Can be easy for some people to ignore or forget to record or review expenses

Read:With any method, be sure that you:

• Don’t cheat by changing your established amount or borrow from other categories. Counsel with your spouse or accountability partner if adjustment is needed.

• Track all expenses closely, and adjust your budget categories next month as necessary.

3. Hold Yourself Accountable

Read:You can only succeed in sticking to a budget by holding yourself accountable. Your weekly family council can serve as a way to review your goals and budget and to make adjustments if necessary. If you have a difficult time holding yourself accountable, it may be wise to report your progress to someone else—a friend, action partner, mentor, or financial adviser. The important thing is that you make time to consistently evaluate your progress and that you make changes as needed.

Discuss:Why is it important to hold yourself accountable? How will you hold yourself accountable to your budget?

4. Seek the Lord’s Help and Keep Trying

Read:Remember that faithful financial stewardship may require you to change your perspective, habits, and behaviors. Faith in Jesus Christ and His Atonement will help you to undergo this transformation. Because these changes may uproot deep habits, and because budgeting is a learning process, you may fail at times to stick to your budget.

Additionally, you may slip up and make impulsive purchases or encounter financial crises like job loss, medical emergencies, or unforeseen maintenance costs. You will learn about building an emergency fund and handling financial crises in later chapters, but for now it is important to remember that a budget is adaptable and that sticking to a budget requires perseverance.

When you encounter setbacks to your budget, discuss them in your family council, and review areas of your budget that may need adjusting. While you may feel discouraged and inclined to give up on sticking to a budget, remember that you can keep trying, and by counseling with the Lord and seeking His help, you will gain the power and ability to persist in your efforts.

Discuss:What will you do when you face setbacks to your budget?

Discuss Sticking to a Budget in Your Family Council

Read:Sticking to a budget requires unity with your spouse and with your family. This week, discuss possible budgeting systems you can use and ways in which you can adjust your budget should you encounter challenges. Additionally, discuss your current financial priority and other long-term goals and your plans for achieving them. You may want to use the “Sample Family Council Discussion” outline below. Remember, if you are not married, your family council might include a roommate, friend, family member, or mentor.

Sample Family Council Discussion

Be sure to begin and end with a prayer to invite the Spirit.

Part 1: Review

• What can you do to improve your budget?

• What is your current financial priority? Discuss the assessment on page 76.

Part 2: Plan

• What are your financial priorities and long-term goals?

• What budgeting system will you use to keep a budget and track expenses?

• How will you stick to your budget, and what will you do if you go over budget?

Take No Money out the Door

My wife and I realized that for some reason we always spent more on silly things toward the end of the month; perhaps as a psychological reward or something. So we made it our rule to take no money out the door the last five days of the month. We call it our ‘TANOMOD week,’ and it has both saved us money and helped us better plan the rest of the month.