By following basic financial principles, families can land big returns—in peace and joy.
When Noah J. Garrett (BS ’02, MBA ’13) and his wife, Lindsay, were first married in 2003, Lindsay came home one day with three bags of new clothes. Noah blew up about the expense—then regretted his outburst. As luck would have it, he was taking a personal finance class from Bryan L. Sudweeks (BA ’80), a BYU finance professor. Eight years later, Garrett recounted to Sudweeks in a letter how the class had affected his marriage.
“The next day [after the conflict] we got out your budget template and started our family budget. . . . We each get personal money to spend on ourselves however we choose. Now when she comes home with new clothes, she’s used her personal money, and I can’t wait to see what she’s bought. Please know that living by a budget has made all the difference in the world for our marriage.”
Sudweeks and family life professor E. Jeffrey Hill (BA ’77) have been teaming up for years to teach about the principles and blessings of financial management. In 2016 they published the book Fundamentals of Family Finance: Living Joyfully Within Your Means. They’ve also collaborated on a free BYU Marriott School of Management website.
“A lot of people seem to think personal finance is a big mystery they can’t solve, but it isn’t so mysterious and it isn’t that complicated,” says Sudweeks. “The basic ideas and behaviors that create financial security—not wealth, but security—are within anyone’s reach.”
It’s Not About Money
Sudweeks and Hill don’t see finances as separate from Christian living but rather as a fully integrated part of it. They believe people of faith should acquire the vision that money is “about having a resource that you consecrate to bless your family and yourself,” says Hill. “It’s about faith, freedom, and happiness.”
They start with four key principles, says Hill: “Everything we have is God’s, we’re stewards over everything God grants us, we have agency to choose how we handle this stewardship, and we’ll be held accountable for the financial choices we make.”
They note that some people of faith, including some Latter-day Saints, get hung up on isolated phrases from scriptures, such as “money is the root of all evil.” But the full context—“love of money is the root of all evil”—indicates that money isn’t good or bad, it’s simply well managed or poorly managed.
Sudweeks says that Latter-day Saints sometimes mistakenly believe that righteousness entitles them to financial rewards from God. “I’ll hear people say that if they’re a good person, they deserve a high rate of return on a risky investment and the Lord will bless them to make it happen. Or they’ll think, ‘I pay my tithing, so the Lord will take any dumb, stupid thing I do and help it work out.’”
Instead, they argue, people are blessed when they live the gospel and abide by wise financial principles.
Back to the Basics
Sudweeks and Hill discuss many financial principles in their book and on their website, but they say five are key:
Saving sets you free (eventually). Saving from a young age harnesses the power of compounding interest, the principle that when you save money, you make interest on that money and then, over time, you earn interest on the interest.
Debt enslaves you. The principle of compounding interest applies also to debt. Interest builds on unpaid debt, and the ultimate cost can be many times the original expense.
Budgets work. But they work only if you use them to limit your spending, not just to track expenses. Noah Garrett says that his and his wife’s restaurant budget was less than $20 when they first married 13 years ago. Now it’s about $200 a month. But still, he says, “once that money is out, we stop going out to eat until the next month.”
Wants are not the same as needs. Sudweeks says a couple who asked for his advice recently complained of having no money. “And yet they wore really nice clothes and had the newest iPhones and Macbook Pros,” he recalls. “It’s a question of knowing your priorities and living by them.”
Relationship-based investments are unwise. Sudweeks and Hill say many people turn their money over to friends and family who promise a high rate of return on an investment. Utah is the scam capital of the world, says Sudweeks, and Latter-day Saints should be especially wary when anyone uses a church affiliation in a pitch for a financial opportunity.
Money and Marriage
While Hill notes that nearly all divorces include a financial factor, he says couples can greatly reduce this risk if they are united, open, and honest: “Together you establish the budget. Together you decide on an amount above which you won’t make purchases without both parties agreeing. Together you decide about priorities such as a house, a car, and vacations.” When couples pay their tithes and offerings, live within their budget, have the proper insurance, and don’t incur debt (except for a home and a basic car), they become much less stressed and more at peace, he says.
The “mad money” concept used by the Garretts works well for many marriages, he adds. Together a couple decides on the amount each can spend without reporting to the other, whether it’s $20 or $200. “That avoids a lot of conflict,” he says.
Recently called as a bishop in the Orlando, Florida, area, Garrett has seen that financial issues are a major problem for many married couples. “Each spouse has to understand where the family stands on financial issues,” he says. “You have to figure it together so you’re both on the same page. The blessings of doing this are tremendous. On top of the financial results, you take out a huge piece of conflict,” says Garrett.
Money in the Eternal Scheme
Just as it’s never too late to begin living the gospel of Jesus Christ, the professors say it’s never too late to improve one’s finances. “There’s always a next best step. I have people in their 60s ask me to help them get started,” says Sudweeks. “You decide, and then you do your best from that point forward.”
They believe that everything we do here in life, including financially, can bring us closer to Christ and help us accomplish our divine missions. Wise stewards, they say, will ask the Lord frequently, “Am I using the resources Thou hast given me in a way that is pleasing to Thee?”
Sudweeks says the rewards in this life can be abundant: “You claim joy when you know you’ve done your best. When you make choices to consecrate your resources to your family and to God and God’s children, you feel the Spirit. You feel a feeling of light—and that is pure joy.”
Financial Dos and Don’ts
In their book and courses on family finances, BYU finance professor Bryan L. Sudweeks (BA ’80) and family life professor E. Jeffrey Hill (BA ’77) offer hundreds of pointers for managing family finances. Here’s a dozen.
• Make major purchases when you’re hungry, angry, lonely, or tired (HALT).
• Go into debt for such things as furniture, fancy cars, or a bigger house. Debt slows your financial growth.
• Forget to report tithing as debt when applying for a home loan. Too many tithe payers get approved for loans they can’t really afford.
• Take sole control of family finances or financial decision making.
• Abdicate responsibility for family finances to your spouse.
• Make sure both spouses understand family finances and have equal say in how household income is used.
• Understand that you can’t control the rate of return on your investments, so focus on what you can control—how much you put in and for how long and how much you pay in taxes and fees.
• Determine what level of risk you can tolerate and invest at that level. If you can’t stomach the ups and downs, be broadly diversified and conservative in your investments.
• Invest in no-load mutual funds through a 401K or IRA. Most people do very well without ever buying or selling individual stocks or bonds.
• Share financial goals, successes, and failures with loved ones and close friends. They can help you stay motivated, and they just might catch your vision.
• Enlist the Lord to help you accomplish your financial goals and, in turn, your life’s mission.
• Generously share your financial resources with others when you can.
Sue Bergin is a writer and is an adjunct instructor in the Marriott School.
More Info: Large student groups in Utah county interested in free financial seminars based on these principles may email firstname.lastname@example.org.