June Wise Stewards Finance Tip

Wise Steward Newsletter Series 2, Article 3

“Learn to Manage Money Before it Manages You.  Financial peace of mind is not determined by how much we make, but is dependent on how much we spend.”                                                                                                                                                                                                                               

–from Elder Marvin J. Ashton’s One for the Money Guide to Family Finance 

This is some of the soundest advice about money that money can buy…and it’s free!  We live in a time and culture where nothing is out of reach.  You don’t have to have money to buy what you want . . . or do you?   Is your approach to money management Proactive, or Reactive?  Living within one’s means can be challenging on a modest income, but as long as you spend less than you earn you can be in control of your money.  Make it a habit to save up cash before you buy something, not using credit.  Also watch out for situations that require a long term contract.  Cable and cell phone companies may give you a low rate if you agree to pay for years and often charge a big cancellation fee.  Consider pay as you go cell phone service, or a higher rate that you can cancel any time.  If your idea of managing the budget is making sure all the credit card payments are made, you’ve moved into a reactive situation and your money is managing you.  If this is the case, somewhere along the line you’ve spent more money than you’ve earned.  Correct this as soon as possible.  It may mean taking on extra work, selling some things, or cutting back on unnecessary expenditures.  The goal is to be in charge of where your money goes.    

Additional Reading from the Ensign

Looking for inspiration and additional encouragement?

Check out the finance related articles in the February 2011 issue of The Ensign. There are real life experiences from members of the church that are dealing with the same challenges that you might be experiencing.

Learning to Be Content, pg. 62
How We Broke the Chains of Debt, pg. 63
My Tithing Couldn’t Wait, pg. 69
Growing Testimonies – and Mission Funds, pg. 73

’Tis Almost the Season!

The holidays are now upon us. What a fun and exciting time of year. Above all, there is the lingering question: How do we keep the true spirit of Christmas front and center in our families amidst all the hustle and bustle? For many, the pressure of finances can get in the way of feeling the spirit of Christmas. Here are a few tips that might help in your efforts to be a wise steward during the holidays:

#1 Agree on a budget. If you haven’t already, decide now how much you are going to spend on gifts, decorations, food, etc. Now for the hard part: STICK TO IT! If it’s not in the budget, do without. If you feel like it’s important, write it down so you can budget for it next year.

#2 Don’t go into debt. We’ve been counseled again and again not to go into debt for things we don’t need. A wise steward plans ahead. Saving money beforehand gives you freedom and peace of mind. If you didn’t save up this year, make it a priority for next year.

#3 Get the family involved. Especially in lean years it’s important to keep the whole family appropriately involved. Young members of the family can learn valuable lessons about service and frugality. They also might surprise you with innovative ideas to save money. Above all, it’s a great way to bring a family closer together when you are all working toward a common goal.

#4 Start Now! Now is the time to put plans into action. If cutting back on what you spend on gifts is in your plan, start now to prepare for creative ways to get into the spirit of giving. Homemade gifts, gifts of service, even letters of kind thoughts, these can be more memorable and meaningful than a toy or a sweater.

The following is a quote by Pres. Thomas S. Monson from his Christmas devotional message from December 2003: “There is no better time than now, this very Christmas season, for all of us to rededicate ourselves to the principles taught by Jesus the Christ. It is the time to love the Lord our God with all our heart and our neighbors as ourselves. It is well to remember that he who gives money gives much, he who gives time gives more, but he who gives of himself gives all.”

If you have money to give, Great! If you have time to give, Even Better! To give of ourselves is our goal and the surest way to keep the principles Christ taught in our homes during this wonderful time of year.

Saving For College

With ‘back-to-school’ quickly approaching, the cost of schooling is more on our minds and it all quickly adds up: school clothes, school supplies, fees, school lunch, etc. Have you considered how quickly the costs of college add up? Tuition, books, fees, room and board. They can be even more costly and the cost of tuition is quickly rising. How do you plan for sending your children to college?

The first step would be to decide what, if anything, your family can save towards future college expenses. Saving for college should not detract from saving for more immediate family needs. For example, you should have a fully funded 3-6 months emergency savings before saving for college. Also, don’t neglect saving for your retirement. You can always hope your child gets great scholarships, but there are no scholarships for retirement.

After deciding how much you can contribute, decide what option works best for you. The Utah Educational Savings Plan (UESP) is ranked by Morningstar in the Top 5 of college savings plans (529). It is a very flexible plan that boasts low fees and expenses, no minimum amounts to open an account and no minimum monthly contributions. There are also many options for allocating your contributions. You can choose how aggressively you want your money to grow (keep in mind aggressive growth means increased risk). There are also options for age-based investments. You can specify the age of the child you are saving for and the account automatically adjusts to more conservative funds as your child grows. The money is accessed tax free as long as it is used for qualified expenses and you can get a tax credit of 5% on your state taxes.

The funds can only be used for qualified higher education expenses (tuition, fees, books, supplies, room and board). If your child decides not to attend college, the account can be transferred to another family member or the money can be withdrawn for other uses (earnings subject to federal and state taxes with an additional 10% federal penalty tax).

Another option for savings is a Uniform Transfer to Minors custodial account (UTMA). There are fewer restrictions on what this money can be used for in regards to your child. It can be used at any time to benefit your child as long as it isn’t considered regular ‘parental obligations’ (feeding, clothing, housing, etc). However, the earnings from this account must be reported on the child’s tax return. Depending on how much you are saving, the earnings usually aren’t enough to require filing a tax return. Another thing to consider is the parent is only a custodian of this account and the minor child can take control of the funds at age 18-21. Hopefully your child is responsible enough to manage this resource appropriately. Also, because the money belongs to your child, it may impact their ability to receive financial aid. Depending on where you choose to establish the UTMA, there may be minimum amounts required to open and contribute to the account.

If you want to option of funding a mission as well as college, you might want to consider saving in a UTMA account. Every family and situation is different, so discuss your goals and research your options to find the best savings plan for your individual circumstances.

http://www.uesp.org/index.html [Utah Education Savings Plan]
http://www.statefarm.com/mutual/acct_types/custodial.asp [info about custodial accounts]

Upcoming Ward / Stake Dates

Mark your calendars:

Emergency Preparedness Fair - for the whole community
(please invite your neighbors, family and friends)
May 22nd, Saturday, 9-12 @ South building

Stake Clothing Swap
July 17th, Saturday, 9-2 @ South building

April Q & A Winner

A big thank you to Diane for submitting our featured question!

Question: What resources are available to find good deals on things we need?

Answer: The best way to find good deals is to be an informed consumer! Do your research and shop around. If you are purchasing services (for example home or car repairs), call a few companies and get quotes to compare. Ask if they will match prices or accept competitor’s coupons. If you are purchasing something retail, check out a couple of stores before making your decision. It’s more work, but on expensive items, it could save you hundreds of dollars. Also, be aware of what something costs new versus used. You can sometimes find great deals on secondhand items, but sometimes you can find new items for even cheaper if you watch for sales and clearance items. Also, word of mouth is great too. Let others know what you are in need of; they may have great recommendations.

Online resources for secondhand items:
Ksl.com
Craigslist.com
Freecycle.org (must be a member)
http://groups.yahoo.com/group/UTBulletinBoard/ (must be a member)

Retail resources for secondhand items:
Deseret Industries
Savers (99¢ Mon, ½ price ticket items)
Thrift Town (½ price ticket items)
Kid to Kid (children & maternity clothing and items)
Plato’s Closet (teen clothing)

For tips on shopping at thrift stores from Angela Hunsaker, check out How to ENJOY Shopping at a Thrift Store on a previous post of this blog. If you have any tips or sites to add, please leave a comment.

How to ENJOY Shopping at a Thrift Store

A big thank you to Angela H. for sharing these tips to help us save money by shopping at thrift stores!

1. BE CREATIVE…REPURPOSE! Look at the parts that make up a thing. Can it be taken apart, cut up, or customized to suit your needs? When buying clothing, can it be tailored to fit, so you can shop in many size ranges?

2. KNOW WHAT A BARGAIN IS. What is the price when buying it new? What condition is it in? What will be the added cost of fixing an item in need of repair?

3. WHERE WILL I STORE THE ITEM? If you don’t have room to store an item, it should stay at the store, even if it is a great deal. If you must have it, then you must be willing to make the sacrifice to let go of items currently in your space.

4. HOW WILL I GET THE ITEM HOME? If you are shopping for large furniture, you may need to plan ahead to bring a vehicle that can accommodate your purchase. You may also need to plan not to have children and/or carseats with you for such a purchase.

5. CAN THE ITEM BE CLEANED? Is it still a bargain when including the cost of having an item cleaned? (i.e. dry cleaning)

6. BE PATIENT. If you don’t find a specific item this trip, keep trying! You can’t usually thrift shop with a list. Also, don’t give up if you don’t enjoy thrift shopping the first time you try it. Go more than once before giving up on it.

7. TAKE A FRIEND All shopping is more enjoyable with a friend!

8. BRING HANDWASH OR WIPES for when you leave the store. Sometimes you have to touch and move things just to see what treasures may be hidden on the shelves. This is a good habit to have for after shopping in ANY public shopping area.

January Q & A Winner

A big thank you to Becky for submitting our featured question!

Question: How can I save on groceries?

Answer: First of all, create and use a shopping list. Plan what your meals will be for the week, create a list of what you need to purchase to make those meals and only buy what you need – no impulse shopping! After you have made your list, study your weekly ads for the best deals. Some stores will price-match other store’s ads for the same item (quantity, size, etc) so you don’t have to drive around to all the stores. Use your weekly newspaper coupons or go online to find coupons for items that you need (it doesn’t save money to buy something just because you have a coupon for it). Another tip – if you have the funds, stock up when case-lot sales occur or when you find a really good price for something you use a lot of. If there is a great deal on something in bulk, split the item and cost with neighbors, family, or friends. Case-lot sales are happening now at many of the local grocery stores! Back-to-school sales in July and August also generally have good deals on snack items, cereals and items for school lunches, so stock up on food items as well as your school supplies!

Great Coupons Sites:
Pinchingyourpennies.com
Coupons.com
Smartsource.com
Redplum.com
Gurusdeals.com


If you have additional suggestions or great coupon sites, please share by posting a comment.

This Question and Answer Section addresses the topics that most concern you. The next newsletter will be coming out in April, so start thinking and submitting your questions, ideas and suggestions. If your question is selected, you can earn a small prize (small print disclaimer: reserved for members of the ward). But anyone is welcome to ask questions.

Teaching Your Children How to Save - part 1

Saving money is a hard concept to learn, especially for a young child. I remember hearing often as a child the phrase ‘that money is burning a hole in your pocket’. Thankfully, my parents were able to teach me to save my money and I don’t hear that phrase anymore. As parents, we have a very important responsibility to teach our children to save and prepare them for a stable financial future. With examples to follow and the knowledge we give them, hopefully our children will be prepared to be financially responsible by the time they are young adults.

Teaching our children to save their money is one of the best things (besides the gospel) that we can pass on to our children to prepare them for the future. But how do we do it? Here are a few tips that may assist you in teaching your children to save:

First of all, Start Young. Any child who can hold money can spend it (or save it). The earlier you start, the easier it is to make it a habit and life-long practice. But it is never too late to teach your children, even your grown children, about saving.

Second, Make it FUN. If it’s fun, your child will do it, do it without you telling them to and probably remind you to do it too. Find some fun money banks that interest your child and will make saving fun. Be excited when your child earns money and can put it in their own money bank. My 2 year old loves to find money to drop into his bank. And along with that, find a fun way for them to save and pay their tithing. My kids have a separate jar for tithing and love filling out and turning in their own tithing slips.

Along with making it fun, your child is also never too young to have a savings account. Many banks and credit unions have special savings accounts, CDs, etc available to young savers. Sometimes the interest rates are better, they have lower minimum amounts and also offer incentives to young children or youth for saving. Let the bank or credit union help you make it fun to save. Take a ‘field trip’ to the bank to deposit their money. The more fun it is, the more they will want to do it.

Third, Set Goals. If your child is saving just because you tell them they need to, it’s not very fun or exciting for them. Discuss with your child what they are saving for. Elder Marvin J. Ashton wrote in the One for the Money pamphlet, “‘Save your money’ is a hollow pronouncement from a parent to a child. ‘Save your money for a mission, bicycle, doll house, trousseau, or car’ makes understandable sense.” If they have a reachable goal, then they are more likely to understand the benefits of saving and begin the habit of saving for their wants.

Your child may need to be reminded of those goals on a regular basis. How often have your children, or even you, been tempted to purchase something small like a candy bar while waiting in the check-out line? If your children know that those impulse buys have to be bought themselves and that it will take that much longer to save for their goal, then they (and you) are more likely to save for what really matters.

Related Ensign Articles for more reference and tips:
Margo Johnson, “Lessons of an Allowance,” Ensign, Sept. 1996, 71

Marvin K. Gardner, “Staying Prepared,” Ensign, Feb 1979, 24

Jenniev J. Poulson and John R. Christiansen, “Can Children Learn to Manage Money?,” Ensign, Jan 1971, 57

Kay Przybille, “Stretching Your Dollars,” Ensign, Jun 2009, 36–37

Tax Time

Either you have already done them or you will soon. April 15th . . . and filing your taxes is coming quickly. You won’t be getting a rebate check like last year, but you still might be getting a refund. So, what are you going to do with your refund? Here are some ideas, BUT keep in mind your financial goals and be sure that you and your spouse agree on how to SAVE or spend your refund.

• Pay off your debt – especially credit card or consumer debt
• Build your emergency fund – a great goal is to have 3-6 months living expenses saved in an emergency fund (for example a money market account)
• Open a money market account or CD– start earning interest, instead of just paying it
• Build up your food storage
• Add to your retirement savings
• Fix that home improvement problem that has been waiting for the funds
• Save for your children’s missions or colleges
• Start or add to your car savings account so that you can pay cash for your next car
• Go on a small family vacation and make some memories