Family Finance Principles.

 During this weeks lesson, during my class we were taught a few principles that can be applied to every family and that I wish my family knew early in their life. Sadly, finances are one of the main reason for divorces and can greatly impact a family’s wellbeing, and future of children and partners.

 

The following principles can shape the future of families in a better way and improve the quality of life of a family forever. I myself realized the church was teaching this principles before many people started using them, like Dave Ramsey, By the way I really advise everyone who wants to improve their money management skills to listen to Dave’s podcast, here are the principles I want to share about:

 

1.     Teach family members early the importance of working and earning. 

I started working from a very young age, and realized that getting money in a south American country is pretty hard, it takes effort if you don’t have a degree or bad money management skills, working from a young age can change the way you see your time and money and can help you to learn to wait and not make impulsive financial decisions.

2.     Teach children to make money decisions in keeping with their capacities to comprehend. “Save your money” is a hollow pronouncement from a parent to a child. “Save your money for a mission, a bicycle, a doll house, a trousseau, or a car” makes understandable sense, there is a sense of achievement and purpose when there is a goal and you achieve it.

 

3.     Teach each family member to contribute to the total family welfare. Encourage fun projects, understandable to the children, that contribute to a family goal or joy. There is a sense of purpose and team work when helping in the family finances. I myself started paying my broadband bill since I was 14 years old, it was necessary for me and my sister to study and I always felt so grateful when I was able to see her study using resources found in internet.

 

4.     Teach family members that paying financial obligations promptly is part of integrity and honesty development.

Paying tithing promptly to Him who does not come to check up each month will teach us to be more honest with those physically closer at hand.

5.     Learn to manage money before it manages you. A bride-to-be would do well to ask herself, “Can my sweetheart manage money? Does he know how to live within his means?” These are more important questions than “Can he earn a lot of money?” New attitudes and relationships toward money should be developed constantly by all couples. After all, the partnership should be full and eternal. If you can’t keep your money, it doesn’t matter how much you earn.

6.     Learn self-discipline and self-restraint in money matters. Such conduct can be more important than courses in accounting. Married couples show genuine maturity when they think of their partners and their families ahead of their own spending impulses.

 

7.     Use a budget. Avoid finance charges except for homes, education, and other vital investments. Buy consumer durables with cash. Avoid installment credit and be careful with your use of credit cards. Dave ramsey teaches about a envelope method where you assign an amount of money and you have to abide by that budget. This is the method me and my wife used to be able to save money to buy tickets from Chile to New Zealand, once we realized that staying in Chile was not going to be a viable country for us to live.

 

10.     Make education a continuing process. Complete as much formal, full-time education as possible. This includes the trade schools. This is money well invested. Use night school and correspondence classes to further prepare. Consider doing pathway courses in case you can’t study full time until you can do so.

 

11.Work toward home ownership. This qualifies as an investment, not consumption. Buy the type of home your income will support. Improve the home and beautify the landscape all the time you occupy the premises so that if you do sell it, you can use the capital gain to get a better home.

 

12.Appropriately involve yourself in an insurance program. It is most important to have sufficient medical and adequate life insurance. This depends on the country you live on, pretty much a necessity if you live in the US.

 

13.Strive to understand and cope with existing inflation. Learn to see through the money illusion and recognize the real value of money. Most wage earners today have less purchasing power than they did [a few years ago]. Learn about the miracle of compound interest and how to invest money long term. make sure you have a purpose for that money, otherwise you won’t take it seriously. For example, set a goal to save long term for your child’s university, or get a emergency fund.

 

14.Appropriately involve yourself in a food storage program. Accumulate your basic supplies in a systematic and an orderly way. Avoid going into debt for these purposes. Beware of unwise promotional schemes.

 

By following these 14 principles I can assure almost anyone that their life will be better, that you will be prepared for health crisis and to face life problems in a better position. I know because they have worked for me, and I’ve been using them for the last 6 years.