Lessons on Frugality from the Mormons

by Tiffany
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Pay an honest tithing

In the Church of Jesus Christ of Latter-day Saints, every single person is asked to pay 10% in tithing.  Other churches have similar principles.  God promises in Malachi 3:10 that for those who pay their tithing, He will “open you the windows of heaven, and pour you out a blessing, that there shall not be room enough to receive it.”

Whether or not you pay tithing is between you and God.  But remember, you can do more with 90% and God’s help than you can do with 100%.

Live on less than you earn.

This may seem an obvious statement, but it is incredible the number of people who spend more than they earn.  Mathematically, it just won’t work out in the end.  If you spend $50 more than you bring in each week, where is that money coming from?

It can be difficult to live this way when credit cards are so accessible, and money can be tight.  It will always catch up to you, however.  You need to find a way to either bring in more or spend less.

We know, we know – easier said than done!  But that’s why we started this blog – to help you save money!

Avoid debt.

Avoid debt, with the exception of buying a modest home or paying for education or other vital needs.  You can include a modest car as a vital need (provided you don’t live in New York City, that is!).

We have our mortgage, and we have a small car loan out still from when we bought our second car.  Other than that, we have no debt – not even credit card debt!  (We do recommend everyone have a credit card to build good credit, but think of it as cash – not credit.)

Full disclosure: we took out student loans Phillip’s senior year of undergrad, because Tiffany’s medical expenses were atrociously high.  One ER visit copay cost about as much as Phillip made in a week of work!  However, we worked hard to pay them back, and they were paid off just 2.5 years after graduation!  Phillip is now doing grad school one class at a time to avoid more student loans.

If you do have debt, then the best way to pay them off is with a debt snowball.  Here’s how it works.

Debt Snowball:

  • Arrange your debts from smallest to largest.
  • Make the minimum payment on all debts each month except for the smallest one: on that one, pay as much as you can.
  • Once it is paid off, roll the regular payment you had been paying on that debt to the next-largest debt until it is paid off.
  • Continue the process until the payment “snowball” has grown so large it quickly knocks out debts that stand in its way.

Here is an example, courtesy of the LDS website:

July 2011

Arranged from smallest to largest balance.

Debt

Balance

Payment

Rate

Family Loan

$150

$50.00

0

Credit Card 1

$323

$8.00

17.9

Credit Card 2

$356

$8.00

24.9

Credit Card 3

$402

$12.00

19.9

Credit Card 4

$435

$13.00

18.9

Credit Card 5

$629

$17.00

14.9

Credit Card 6

$1,350

$30.00

13.9

Student Loans

$2,360

$58.00

4.7

Auto

$18,670

$450.00

7.5

Totals

$24,675

$646

October 2011 (3 months later)

Debt

Balance

Payment

Rate

Family Loan

$0

$0

0

Credit Card 1

$313.31

$58.00

17.9

Credit Card 2

$354.12

$8.00

24.9

Credit Card 3

$385.73

$12.00

19.9

Credit Card 4

$416.26

$13.00

18.9

Credit Card 5

$601.09

$17.00

14.9

Credit Card 6

$1,306.41

$30.00

13.9

Student Loans

$2,213.16

$58.00

4.7

Auto

$17,663.80

$450.00

7.5

Totals

$23,253.88

$646

April 2014 (33 months later)

Debt

Balance

Payment

Rate

Family Loan

$0

$0

0

Credit Card 1

$0

$0

0

Credit Card 2

$0

$0

0

Credit Card 3

$0

$0

0

Credit Card 4

$0

$0

0

Credit Card 5

$0

$0

0

Credit Card 6

$0

$0

0

Student Loans

$620.34

$196

4.7

Auto

$6,496.26

$450.00

7.5

Totals

$7,116.60

$646

Learn to distinguish between needs and wants.

As you work to cutting your expenses so you can spend less than you earn, you’ll need to distinguish the difference between wants and needs.

need is something that you have to have in order to survive.  Food, clothing, and shelter are a few examples.

A want is something you would like to have. It is not absolutely necessary, but it would be a nice thing to have.

Each time you spend any money, take a moment and ask yourself, “Is this something I want, or is it something I need?”

Develop and live within a budget.

Part of frugal living the Mormon way is having a budget.  We know, lots of people have budgets, not just Mormons.  But remember, we believe that we will actually be held accountable for what we do with what we are given.  How can we know if we are using our resources wisely if we don’t keep track and make plans?

If you want to learn how to budget, check out our posts on World’s Easiest Budget + FREE Printable! and 9 Simple & Different Budgeting Methods.

Build a reserve.

One things that Mormons are famous for is emergency preparedness.  Our church leaders encourage us to have a few things on hand in case of an emergency or disaster.

Food Reserve

First, they recommend having a year’s supply of food and necessities on-hand at all times.  While natural disasters do occur, there are other emergencies that may necessitate a long-term food supply.  You may lose your job, or someone may become ill and be unable to work.  Having a year’s supply of necessities stored up means you can use your available funds on other things, like mortgage or utility bills.

(This is actually the reason we started couponing in the first place!)

Financial reserve

Second, they recommend to build up a savings account with 3-6 months’ worth of cash.  While this may seem extremely daunting at first, you can do it!  This is actually also one of Dave Ramsey’s baby steps, and he has a lot of ideas on how you can accomplish this!

Be honest in all your financial affairs.

As you deal with money, it is so tempting to want to fudge or hide things.  Some people keep secret accounts from their spouses*, and other people may lie as a way to get a discount (*ahem*, we’re talking to all of you people who practice coupon glittering.)

*Note: if you are in an abusive relationship and are hiding money as a way to help stay safe, then please reach out for help.  There are many who will believe you and will help you.

As we think about honesty in our finances, we can’t help but think of this true account:

Some 30 years ago, while working in the corporate world, some business associates and I were passing through O’Hare Airport in Chicago, Illinois. One of these men had just sold his company for tens of millions of dollars—in other words, he was not poor.

As we were passing a newspaper vending machine, this individual put a quarter in the machine, opened the door to the stack of papers inside the machine, and began dispensing unpaid-for newspapers to each of us. When he handed me a newspaper, I put a quarter in the machine and, trying not to offend but to make a point, jokingly said, “Jim, for 25 cents I can maintain my integrity. A dollar, questionable, but 25 cents—no, not for 25 cents.”

Teach family members.

As you work to put these principles into your life, please make sure that you do it as a family.  Your children will learn more about hard work and the value of a dollar when they see where the money goes.   It will tie your family together when you work as a team to make sure you are managing your resources in the best way possible.

More information about the principles in this article can be found at https://providentliving.lds.org/?lang=eng

An earlier version of this post Tiffany wrote can be found on The Crazy Shopping Cart

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