Chapter 1

Pay the Lord first, then yourself

Elder Marvin J. Ashton stated in his talk One For The Money; Guide To Family
Finance the following, Successful financial management in every home begins with the
payment of an honest tithe. If our tithing and fast offerings are the first obligation met following
the receipt of each paycheck, our commitment to this important gospel principle will be
strengthened and the likelihood of financial mismanagement will be reduced.
There is so many blessings that come into our lives when we choose to pay out tithes and
fast offering first from any of our paychecks. These blessings are promised by the Lord, as we
see in Malachi 3:10 Bring ye all the tithes into the storehouse, that there may be meat in
mine house, and prove me now herewith, saith the LORD of hosts, if I will not open you the
windows of heaven, and pour you out a blessing, that there shall not be room enough to
receive it. I strongly encourage each member of the family to pay an honest tithe to be able to
claim these blessings that are promised in Malachi 3:10.
You cannot retire until your Money goes to Work
Interest can work for you as you earn it but it can also work against you when you pay
interest on borrowed money. When you borrow money, you must pay interest, or rent, on that
money. This interest you pay will not stop to eat or sleep or take a vacation either. It will add up
24 hours per day, seven days per week, and will work just as hard against you as interest on
savings and investments did for you. I hope you all understand that saving more and borrowing
less prepares one for tomorrow. As you budget effectively and live within your means you will

find that you have so much money left over to save which when put to work brings forth great
yields in the future for the family.
Prepare Financial Goals
Put some short term, annual and long term goals in place. They should be
realistic,focused on your personal values and outside your comfort zone.

Chapter 2 - Financial Records

You will have to keep track of your financial records because this is so important for both
of you in order to understand your finances, and to be able to stay organized. Keep the following:
Tax records, transaction records, credit records, insurance records, investment records, property
records, personal records, and financial management records. Sometimes that both of you could
do is to put all your documents, such as titles, policies, certificates, etc. in a safe deposit box in
case there is a fire or theft. Also, you could keep this financial record in your computer, however
you have to make sure to have a backup data in case that you may lose these documents in your
computer.
Building a Strong Financial Position
You will have to build a net worth and a sound relationship of assets and
liabilities. This with the purpose of increasing assets and/ or reducing liabilities by: saving
money, paying off present debts, avoiding additional debt, and buying appreciating assets. If both
of you work and this and show that you can do it, you will show that you are able to meet the
current expenses and emergencies. You never know when you will have those emergencies but
we might as well be prepared.

Cash Flow Statement

By doing this and learning how to do it, both of you are going to be able to
keep track of your incoming and outgoing cash. This will allow you to show your income and
expenses over a period of time which is one month. So, basically you will know what happened
with your money, both of you are going to be able to double check your expenses and the money
that came into your bank account. For example, 1- Income: (your cash increases) this has to be
with your payroll check, interest on your savings, rebates, the sales of assets, and more. 2Expenses: (your cash decreases) food, clothing, gifts, housing, and more.

Chapter 3 - Putting Your Money to Work

Understanding and evaluating investments in stocks.
You can either be an owner or a lender or a combination of both. An owner buys assets
such as stocks, or real estate, or other appreciating assets. A share of stock represents ownership
in a corporation. Stockholders may receive dividends from the corporation which is a portion of
company earnings.
The value of stocks is based on supply and demand. When there are more buyers than
sellers, the price goes up. When there are more sellers than buyers the price goes down. Price
changes in stocks are affected by confidence in the company, their specific industry, and the
economy.
Here are some important stock measurements to consider:
Earnings per share: To calculate the earnings per share divide net after-tax profit (earnings) by
the number of shares of stock outstanding (issued).
Book value per share: Divide the companys equity (assets less liabilities) by the shares
outstanding (issued).
Price earnings (PE) ratio: Divide the stock price per share by the net after tax earnings per share.

The best strategy for investing

Stock values go up and they go down. Dollar cost averaging is the best strategy for
investing. You invest the same amount every regular interval in the same investments. When the
stock is up you buy fewer shares and when the stock is down you buy more shares. On average
you will buy stocks at the best possible cost. You do not try to time the market by attempting to
buy low and sell high. Instead you allow the market fluctuations to give you an overall low
average cost.
Dollar cost averaging will not work if the price continues to go down while you buy
shares and does not recover. However, this strategy will always minimize your cost and provide
the best results if you follow the next four steps:
1.

Buy and Hold. You will minimize your risk if you keep your investment for at

least five years. The longer you stay invested, the lower your risk of loss and the higher your
potential gain.
2.

Diversify. If you buy a broad range of securities in various industries and

categories, you will average your results. When some stocks are down, others will be up. The
best way to diversify is to invest in mutual funds.
3.

Beat Inflation. Your investments are only beneficial if you buy securities that grow

at a greater rate than inflation increases the cost of living.

4.

Ignore World Events. Stay invested and keep investing on a dollar cost averaging

basis in a broad portfolio of investments.

The IDEAL investor does the following:

a.

Invests consistently and does not attempt to time the market.

b.

Diversifies and ignores confusing world events.

c.

Expects the market to go up and down.

d.

Always selects investments that outpace inflation.

e.

Looks at investing with a long-term perspective.

Chapter 4 - The Time Value of Money

One of the principles of the chapter 4 The Time Value of Money says money has a
different value depending on the time frame we are discussing and it gives an example of how
money has a different value today than it will have in the future. It is important to point out that it
does not say only about money, but also goods as houses, cars, clothes and furniture.
At the beginning of the chapter is presented a scripture in Luke 14:28 that explain the
importance to think about a great idea or desire, it says: For which of you, intending to build a
tower, sitteth not down first, and counteth the cost, whether he have sufficient to finish it? If we
want to buy a good, mainly the expensive ones, is very important run the numbers before we
decide do it. There are many formulas in Excel as FV, PMT, PV, RATE, and NPER that we can
use to help us in those kind of decisions and them can show us if certain thing is worthy to
purchase or not.
Another principle that is very useful in this chapter is that we must to sacrifice certain
things today so we can be able to have great things later. The book and also the church always
give to us the example of the seed: we have to plant seeds, take care of it, we have to be patient,
invest our time and other things if we want to harvest great plants in the future.
Using these two principles and the formulas above, we are able to compute and calculate
the following financial values:

 FV calculates the future value of an investment or any number that grows at a certain interest rate
for a certain number of periods.
PMT calculates the payment for a certain loan or investment based on a certain interest rate for a
certain number of periods.
PV calculates the present value of an investment or loan based on a future amount of the money
received or paid given a certain interest rate and a certain period of time.
RATE calculates the interest rate per period for a certain loan.
NPER calculates the number of periods for a certain investment or loan at a certain interest rate.

Chapter 5 - Save Now, Buy Later

The chapter 5 explain what is consumer credit, its advantages and disadvantages and also
explain about credit. One of the advantages of consumer credit is to enjoy goods and services
now and pay for them later. In the other hand, the disadvantage of credit cards and other charge
accounts is spending more than you can afford to pay, what results in loss of goods, income,
reputation, peace of mind, and even your health. It results in countless complications as court
actions and bankruptcy. In these days family relations having suffer with financial net worth
diminishes.
To avoid headache it is recommended that you can afford to spend 15 to 20 percent of
your net monthly income (after tax take home pay) on credit payments (excluding mortgage
payments). This chapter also gives other tips to determine the Cost of Credit:

Determine the original loan (the amount you originally wanted to borrow)
Calculate the final loan amount (the original loan + fees, loan processing costs, etc.)
Calculate the payment amount (PMT function on the final loan amount)
Calculate the total amount paid back (PMT * NPER)
Subtract #1 from #4 (the total amount paid back original loan amount)
In conclusion, before starting using your consumer credit, set a goal to eliminate debt,
because our goal is to collect interest. Always pay the total balance on charge or credit accounts
each month or dont use them and the last, but not least make all loan payments on time.

Chapter 6 - You Are Not Your Car

The cost of a car is more than its purchase price. There is a variety of ways a car
gobbles up money, but they can all be classified into two main categories: fixed and variable.
The fixed costs dont change from month to month, while the variable costs. Some of the costs
that are associated with the Hopefuls cars are

Car 1 (used by Brother Hopeful) Car 2 (used by Sister Hopeful)

Fixed
Car payment

$0/month

$200/month

Car insurance (if even split)

$60/month

$60/month

Gas (if even split)

$85/month, variable

$85/month, variable

Subtotal of monthly cost

$145/month ish

$345/month ish

Variable

Routine maintenance
Repairs
Perspective note: Car 2 costs as much in lease payment, insurance, and gas as Sister
Hopeful makes at her day job.
If the Hopefuls want to cut costs related to transportation, the variable costs would be
where those cuts are made. For example, consolidating trips would allow them to spend less
money in gas. Driving more carefully decreases the likelihood of a wreck, and the costs
associated with making repairs.
Cars are not the only way to get around. While they are more convenient, and in most
cases cut commute time, they are costly to maintain. I would highly recommend that Brother and
Sister Hopeful look at the possibilities of carpooling, taking public transportation to work, asking

their kids to take the school bus instead of being driven to school, and walking/bike riding to
piano lessons and other neighborhood activities. Using alternate ways to get around, they would
decrease variable costs related to their cars, and possibly open the option of selling their second
vehicle.
Lease payments may be less expensive than loan payments. Leasing a car costs less
than buying one in the short term. If the Hopefuls would switch their second car for a leased car
for a short while, they would have more money to repay other debts. After they have a better
hold on their debts, they may decide to purchase a car again.

Chapter 7- Amortization Schedule

Paying extra each Payment
My first recommendation is cut out some unnecessaries monthly expenses, and use them
for making extra payments in order to reduce the principal in the first and second mortgage. At
the same time the interest for the next payments will decrease considerably and the loans will be
paid in less years.

For the mortgage 1 of $ 1,149, the family should make an extra payment of $ 200 cutting off the
next expenses.
Cable TV

$95

Home Phone Service

$75

News Paper

$30

Total 1

$200

For the mortgage 2 of $ 582,82 the children should contribute with $155 canceling the particular
lessons.
Several Lessons for each child

$155

Bowling league

$ 85

Refinancing
Explore the refinancing options with the bank. Even in both mortgage already crossed
half of the payments, could be a possibility where the interest rate had decreased even 1 point. If
you find that option, you are going to save a considerable amount on interests.
Keep your house functional and boost improvements in your neighborhood
Your house is your asset, and its value is directly proportional to its wearing conditions.
Consider having your house completely functional. That mean electric circuits , water pipelines,
calefaction system, A/C all of those working in well-conditions. Fix as soon as possible every
new failure, if you dont do it by the time you want to sale your house the realtor will give you a
value with which you could be disappointed. Procure and motivate your neighbors to keep on
really good conditions the neighborhood, remember the location influences directly in the
appreciation of your house.

Chapter 8 - Risk
Health Insurance

Health insurance is so important to daily life because we never know when are we going
to stop being healthy. Having a mandatory health insurance here in America is a blessing because
if you get sick you will not have to pay the whole amount, the insurance will help you to cover
some part of this. However you have to avoid risks by eating healthy, doing exercise, take
precautions on the change of temperature and eating habits. This are some elements that a health
insurance can include: Coinsurance, Deductible amount, Co-Payment, and Stop-loss provision. It
is recommend to you to learn what those elements are, and to have savings to cover those fees.
Life Insurance
We have to be prepared for the worst, either you live too long or too short. A great idea to
be prepare to cover the expenses of a person that is not around us anymore is a life insurance. On
the market there are several of life insurance policies: Easy method, Guideline, Non-working
spouse method, Ding. Each of one has different policies, so you might want to talk with your
spouse in order to be better prepared and covered. Its a myth that only rich people have life
insurance, actually some are really affordable and some of them are offered by some jobs.
Reduce Risks
There are many ways to reduce risk on your life, Im not saying not to life your life at the
fullest; what I want to say is to take preventive actions in order to be less susceptible to any
accidents. For example: Wearing a seatbelt or other protective equipment, installing deadbolt
locks at your house, installing an alarm system and smoke detectors in your home. You have to
remember that you have to do any exercise activity in order to remain healthy through the years;
this also helps you to prevent illnesses in the future also remembered to eat balance to have a
pleasant life.