Our living prophets have taught us to be aware of our personal finance and take

care of it. There are many ways to have a good financially stable life and I have learned a
few ways to do so. First of all and most important is

1. Pay an integral tithing (Ch. 1)

I truly believe that with the payment of an honest tithing, we receive uncountable
blessings for it. Also, our tithing can bless so many others in various different ways. Elder
Hales taught in General Conference of October 2002 that we can express gratitude to the
Lord by paying it with pure intent in our hearts. Tithing is a test of faith with eternal
blessings. It is clear that the Lord doesnt need our money but it is also clear that we
need the blessings from our loving Heavenly Father. By sacrificing to the Lord what we
may think we need or want for ourselves, we learn to rely on Him. As our gracious
Father, He only desires to help us and help those in need thru us. By paying tithing, we
are allowing ourselves to be instruments in the hands of the Lord.

2. Prepare Financial Goals and Make Wise Financial Decisions (Ch. 1)

Goals are so important to make for various reasons. Without goals, we have no
direction to our lives because we dont have a chosen destiny. Along with discipline and
persistence, goals have always helped me to accomplish what I desire. As for financial
goals, it will help to avoid debt and to help get out of it. It isnt news that some goals are
really hard and require a lot of sacrifices however, if we try our best, they will most of the
time be worth it. On the other hand, without the persistence and discipline part, all the
effort you make can become frustrating.

3. Financial independence (Ch.1)

Financial independence is to be self-reliant. In other words, its to be able to provide
for yourself and your family without external help. That includes banks so having debt
doesnt make you financially independent. After paying tithing, the next step to begin the
journey of independence is to pay off the debts and stay away from them. Being
independent doesnt mean being wealthy but it is the way to get there.

4. Budgeting (Ch.2)
Unless you are financially wealthy, budgeting should be your best friend. The three
principles everyone should have in mind are: 1) Spend less than you earn. This is the

recipe for a debt free life. 2) Spend for needs rather than wants. With a low income, it is
extremely important to only spend in what is necessary. This is one of the sacrifices I
mentioned earlier. 3) Save for emergencies, major expenditures, and investments. I want
to add medical expenses. The United States is one of the countries with really expensive
medical procedures. Being so, it is really important to be ready for emergencies. As for
budgeting, it helps to keep track of everything that is going on with your money. It helps
to know how much money you have available, where you need to cut expenses and many
other features that will benefit those who want to get out of financial problems.

5. Building a Strong Financial Position (Ch.2)

Building a strong financial position consist of a few things such as: saving money for
times of need, buying appreciating assets things you own (house, car, investments, etc.),
paying off present debts and avoiding additional debt. Purchasing with cash is in this
category. We should always try our best to buy with cash. Especially if it is for big
amounts. The problem of making loans is the fees. Depending on the interest rate and the
number of periods to pay, the amount to be paid can increase in drastic proportions.
Taking us back to the terrifying cycle of debt.

6. Cash Flow Statement (Ch. 2)

Cash Flow Statement is where you can keep track of what happened to your money.
What was spent and what was saved. In my opinion, this step is important because walks
side by side with budgeting. At the beginning of the period you make a budget and then
during the period you keep track of your progress with the statement. It has two elements:
Income and Expenses. The statement outlines the increases and decreases in the income
(payroll check, interest on your savings, dividends on your investments, the sale of
assets, rebates, refunds and cash gifts, tax returns, inheritances, and funds that you
borrow, and any other sources of income). Also, it tracks the changes from your cash
(expenses such as food, clothing, donations, gifts, housing, utilities, transportation,
entertainment, taxes, insurance, medical expenses, loan payments, and all other purchases
and payments. If updated frequently, you will always know the current situation of your
money.

7. Put your money to work (Ch. 3)

One of the principles I have learned is that you cant retire without having put your
money to work. A way to put your money to work is by investing you money. There are a
few alternatives to do so. One of them is by buying stocks. Summarizing, it is the

ownership of a corporation. In other words, it means that if the value increases, the stock
holders will receive income according to the growth. On the other hand, the stock holder
suffers the risk of losing money if the value decreases but if you invest on stock that
present a constant growth, the chances of losing money may decrease.

8. Dollar Cost Average. Dollar (Ch.3)

It may be considered the best strategy for investing. For it, you invest the same
amount every month. 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.
With this, you will end up having more stocks which were bought in a low price, which
allows you to have even more income when the prices go up. This is one trick to reduce
the risks when investing because, as mentioned, investing can be a little risky if you dont
be cautious.

9. Diversify (Ch. 3)
When I say diversity, I mean that as an investor, it is better to invest in many different
corporations instead of just in one. Because if the value of the stock goes down and you
only invest in a single stock, the loss will be noticeable. However, if you invest in many
different corporations the chances of losing are reduced because while one value goes
down, the other one can be going up. This may even the values but in the bright side, you
didnt lose money which would be a lot worse.

10. Run the Numbers (Ch. 4)

The same way that interest rates can help us and be so useful, it can also consume us
into huge financial problems that we most definitely will regret. To help us avoid these
problems, the tool "Run the Numbers" was developed. Having this knowledge can help
you to avoid disasters that will harm you family. Now, when you decide to purchase
something, you need to will always plan yourself by calculating how much would be the
difference of buying something with a loan or if you save the money and purchase by
cash. Also, it with prepare you for the future because you will be able to save and manage
your money to have a good retiring plan so you dont need to depend as much on the
government.

11. Credit Capacity (Ch. 5)

Credit Capacity in how much you afford to spend I credit per month. Experts say that
we can only afford to spend on credit 15 to 20 percent of our income. To avoid getting
into bigger debt, it is strongly advised to purchase with cash because there are no or
reduced fees in that case. For you to purchase with credit, it is needed to make a few
sacrifices. Otherwise, there are many risks that you might suffer from because of neglect
or by distraction. The importance of running the number goes here. If you run the
numbers, you will see the effect of paying in cash or credit. Unless there isnt interest rate
(which it hardly ever exists). The best option is to avoid it.

12. Earn Interest (Ch. 5)

Earning interest is also a very useful tool. By putting your money in a savings account
for example, you may have a certain interest rate given by the bank. This rate is usually a
small percentage but over time, it will make your money work for you without you
having to do something. Actually, one of the only things you might need to do is to make
a monthly payment or to keep a certain amount in this account. Whatever the case is,
your money will be generating a little bit more of income which obviously can be very
useful for many different situations. However, there is an opposite side of this story. If
you purchase something on credit and you dont have sufficient funds for it, it will start
generating fees and with a rate, you will owe a lot more money than in the beginning. So
you need to do your best to not pay interest by being careful.

13. You Are Not Your Car (Ch. 6)

Cars have a growing importance nowadays making it really hard not to have one.
However, it is important to not forget that You are not your car. The important message
of the phrase is that it really doesnt matter what type of car you have, the brand of the
clothing you wear or the phone you have, what matters is the type of person you are and
the type of people we want to be known for. In September of 1955, Laurie W. Thornton
gave the message entitled Blind Sight where she said: [these things] do not matter to
God: For man looketh on the outward appearance, but the Lord looketh on the heart (1
Sam. 16:7). With this scripture I could learn that the problem is not having a good car.
The problem is to adore the car, give it the wrong attention and how it makes you feel.
Summarizing, the problem is where the heart is placed. As said in the beginning, it is
important to have a car and be able to get around and go places. It all depends in the
intent of our hearts.
14. Purchasing vs. Renting (Ch. 6)

Depending on the circumstances, it may be better sometimes to rent than to purchase.

To discover which of the options are better, it is needed to run the numbers as mentioned
earlier. If you intend to change cars frequently, have a car for a short period of time, or
others, it may be cheaper to rent. However, if you intend to stay with the car for some
time, it is cheaper to purchase a car rather than renting it.
15. Purchasing New Versus Used Vehicles (Ch.6)
This is another option to consider. Sometimes it is better to purchase a used car
because the price is smaller but it may have more maintenance costs. The problem with
new cars is that because of depreciation, it loses almost 50% of its price in only 2 years.
Because of this, in my opinion, it is better to purchase a car that is relatively new.
Purchasing a really old car will only bring loss because of the costs it comes along with
it.
16. Renting Versus Home Ownership (Ch. 7)
Just as renting and purchasing a car, each situation is individual and in each case there
are different possibilities. For example, when renting, there is more flexibility, less costs
for maintenance and less upfront payment compared to ownership. As for owning a
house, there are tax benefits, equity, and others. Also, there are disadvantages for each
one. For example if you are renting, you have to follow a contract and have certain rules
to follow but if you were the owner, you would make the rules for yourself. As for
money, there is no saying which option is best. If your jobs requires you to move a lot, it
may be better to rent instead of purchasing. Also, for this situation, run the numbers.
17. Down payment (Ch. 7)
First of all, down payments are a requisite to qualify for purchasing a house in most
occasions. The ideal down payment is 20% or more of the price of the home.
Generally, people pay that amount to begin the purchase. In my opinion it is great
because it helps you learn to save money and also it makes the rest of the value to be
financed a lot smaller.
18. Health Insurance (Ch.8)
I completely agree that it should be mandatory. Health care in the United States is
really expensive. It is considered one of the most expensive in the world. Also, our health
is really important and we need to take care of it. Two factors that prof this importance is
that Heavenly Father wanted us to come to earth and have a body and second, He created

the Word of Wisdom to protect us. Having health insurance will help us to take care of us
and also help us to avoid another problem the Lord wants us to avoid: debt. Some people
may think that it is expensive but medical expenses can be a lot worse without insurance
to help cover the expenses. Especially if any member of the family gets hurt or sick.
19. Life Insurance (Ch.8)
Also really important to have. Especially for the person who contributes the most with
the familys income. This life is full of uncertainties so we have to try our best to be
prepared for whatever we may need to face as a challenge. There are many different life
insurance plans and for each individual a certain plan may be good or not. It is important
to consider the familys circumstances and needs to be able to choose the best plan for
you and your family.
20. Car Insurance (Ch.8)
Being cautions on the roads arent the only way to reduce risks. You never know when
you might get into an accident and need the insurance. For this reason, you will definitely
have insurance (if it wasnt mandatory, you should have it anyway). You cant afford any
accidents so you will transfer the responsibility to the insurance company. There are also
many different automobile insurances that can be evaluated for personal needs.

21. 401(k) (Ch. 10)

It is a retirement plan that the company that you work for will contribute for. You
should always contribute as well. This plan is what will provide for you when you stop
working. It should be saved or invested so that the value can be enough to sustain you
and your spouse for a few years. You should plan out how you want to live when you
retire and that should determine how much money you need to have, how much you need
to save and how many years you still need to work for. For better results, it is better to
start as soon as possible.

22. Independent Wealth (Ch.10)

A goal to be made is to be independently wealthy. The definition of independent wealth is to

be able to be able to live comfortably without having to work. This should be a long term goal.
Starting to save for retirement early is a great way to begin the journey for this type of
independence. However, it all starts with financial independence. The Hopeful family should
begin by paying off their debts and by doing so they are starting to become financially
independent. Later on they can start saving to achieve wealth.