- Budgeting
- Cash Management
- Consumer and Mortgage Loans
- Debt and Debt Reduction
- Time Value of Money 1: Present and Future Value
- Time Value of Money 2: Inflation, Real Returns, Annuities, and Amortized Loans
- Insurance 1: Basics
- Insurance 2: Life Insurance
- Insurance 3: Health, Long-term Care, and Disability Insurance
- Insurance 4: Auto, Homeowners, and Liability Insurance
- The Home Decision
- The Auto Decision
- Family 1: Money and Marriage
- Family 2: Teaching Children Financial Responsibility
- Family 3: Financing Children’s Education and Missions
- Investments A: Key Lessons of Investing
- Investments B: Key Lessons of Investing
Financial Plan Assignments
While the previous section helped you determine where you wanted to be, this section helps you to see where you are right now. Financial statements help you understand your current financial position.
Your budget is an important financial statement. If “every family should have a budget,” as President Kimball stated in the April 1975 conference, then you need to put one together. Whether your budget is handwritten in a notebook, input into a spreadsheet program, or stored in a commercially available money management program; the important thing is that you know where your money is coming from, where it is going, and most importantly, whether or not you are living within your means and moving toward your goals. A good rule of thumb regarding spending and budgeting is if it is not moving you closer to your goals, it is not a good idea.
If you are not already living on a budget, your assignment is to begin today. Begin keeping a record of all your expenses, using the recording method of your choice. Your budget is probably the single most important tool that will help you attain your goals. Use it wisely and refer to it often. It is important to remember that recording expenses alone is not budgeting. Recording expenses is just record keeping. You need to plan where your money should go and then see that you follow your plan. Don’t stop budgeting just because it pinches your spending; this shows your budget is working. If your budget is not keeping you from spending money on things not consistent with your goals, it is not working.
In addition to making a budget, put together your own personal or family balance sheet. Be conservative in evaluating your assets and be exact in evaluating your liabilities. Follow the methods discussed in this chapter and see where you are financially.
Finally, calculate your financial ratios regarding liquidity, debt, and savings. Are your assets as liquid as they should be? Are you reducing debt as you should? Are you saving as much as you should?
Financial statements, if used properly, can help us understand where we are financially, see what we have done in the past, and make plans to help us achieve our goals in the future.
