In spite of the teachings of the Church from its earliest days until today, members sometimes fall victim to many unwise and foolish financial practices. Some continue to spend, thinking that somehow the money will become available. Somehow they will survive.
Far too often, the money hoped for does not appear.
Remember this: debt is a form of bondage. It is a financial termite. When we make purchases on credit, they give us only an illusion of prosperity. We think we own things, but the reality is, our things own us. . . .
President Heber J. Grant said, “From my earliest recollections, from the days of Brigham Young until now, I have listened to men standing in the pulpit. . . urging the people not to run into debt; and I believe that the great majority of all our troubles today is caused thro0ugh the failure to carry out that counsel.”
President Ezra Taft Benson said, “Do not leave yourself or your family unprotected against financial storms. . . . Build up savings.” — Elder Joseph B. Wirthlin, “Earthly Debts, Heavenly Debts,” Ensign, May 2004, pp. 40-41
Be modest in your wants. You do not need a big home with a big mortgage as you begin your lives together. You can and should avoid overwhelming debt. There is nothing that will cause greater tensions in marriage than grinding debt, which will make you a slave to your creditors. You may have to borrow money to begin ownership of a home. But do not let it be so costly that it will preoccupy your thoughts day and night.
When I was married my wise father said to me, “Get a modest home and pay off the mortgage so that if economic storms should come, your wife and children will have a roof over their heads.” — President Gordon B. Hinckley, “Living Worthy of the Girl You Will Someday Marry,” Ensign, May 1998, p. 50
Despite being established upon principles of thrift, frugality and moral integrity Utah, ironically, leads the nation in bankruptcy filings.
The pioneer adage to, “Use it up, wear it out, make it do, or do without,” has given way to enjoying all that the bank’s money can buy – with zero down and 48 months to pay.
Blame it on credit cards maxed-out to their limits, . . [or] simply trying to maintain a certain lifestyle, an increasing number of Utahns are turning to the courts to escape mounting debts.
Many Americans and members of the Church are drowning in a sea of debt. Roughly one home in 34.5 will file for bankruptcy this year, making Utah the insolvency capital of the nation. Nationally, one in 69 homes will file.
Unlike our grandparents who worked on a cash basis and divided their monthly income into envelopes of different expenses, today’s family budgets are often electronic, allowing budgets to be fluid. . . .
Speaking during a devotional June 4 at BYU, Elder Sheldon F. Child of the Seventy quoted from D&C 21 urging students to follow the prophet in “all patience and faith.”
“Does it take patience and faith to follow the prophets?” he asked. “Of course it does. His counsel may interfere with our lifestyle. He may say things that we don’t want to hear.”
He quoted President Gordon B. Hinckley who said, “So many of our people are heavily in debt for things that are not entirely necessary. . . . I urge you as members of this Church to get free of debt where possible and to have a little laid aside against a rainy day.”
Some debt is necessary, Elder Child said. “But there are too many people who do not differentiate between wants and needs. . . . People need to discipline themselves in a way that does not put themselves financially at risk.
“We teach the importance of self-reliance. It is a prerequisite to service and giving. Each of us must become self-reliant before we can effectively help others,” Elder Child said.
“I’m convinced that when we do as the Lord wants, revelation comes,” said a member of the Heber City Stake who, after hearing President Hinckley in general priesthood meeting call on members to get out of debt, came home with a determination to pay off his nearly $80,000 credit card debt. “But if we take care of our wants first, then we get in the way of the Lord blessing us. We are blessed as we follow the prophet.” — “Irony of leading nation in bankruptcy filings,” Church News, August 3, 2002, p. 3
We must listen to the words of our living prophet and take care of our temporal needs. He advises us to stay out of debt, live within our means, be thrifty and industrious, and become self-reliant so that we can reach out and help others. This is good advice for each of us and will bring blessings to our lives. — Elder Sheldon F. Child of the Seventy, BYU Devotional, June 4, 2002
”If there is any one thing that will bring peace and contentment into the human heart, and into the family, it is to live within our means, and if there is any one thing that is grinding, and discouraging and disheartening it is to have debts and obligations that one cannot meet.” President Heber J. Grant made that statement 70 years ago. It is as valid today as ever. (Relief Society Magazine, May 1932, p. 302.) — Church News, October 26, 2002, p. 16
One of the significant obstacles in achieving self-reliance is the accumulation of unnecessary debt.
The most prevalent and most expensive debt is the easiest to acquire – credit card debt. Financial institutions often offer unsolicited lines of credit at seemingly low interest rates, but the interest rates are soon adjusted to the prevailing onerous rates of 18-20%. It is not unusual to see young people with $15,000 to $20,000 of credit card debt at these terribly burdensome rates. The debt payment is often so high that the only way you can provide for yourself or your family is to take on more debt. Thus begins the vicious cycle of lifetime bondage to creditors. . . .
Occasionally I hear of young men and women who are always looking for the easy solution to the comfortable life. Their ship is always just about to come in. However, continued disappointments often result in an unwarranted reliance on family members or an addiction to unemployment benefits. . . .
. . . I do say that those who abuse the government system or inappropriately burden parents or others for support offend the very principles of the gospel….Self-reliance is and always has been a sacred obligation and an important principle of the gospel.— Bishop Richard C. Edgley, 1st Counselor in Presiding Bishopric, CES Fireside, November 3, 2002; Church News, November 9, 2002
First, and above and beyond anything else, let us live righteously. . . . Let us avoid debt as we would avoid a plague; where we are now in debt, let us get out of debt, if not today, then tomorrow. Let us straightly and strictly live within our incomes, and save a little. Let every head of every household see to it that he has on hand enough food and clothing, and where possible fuel also, for at least a year ahead. You of small means put money in foodstuffs and wearing apparel, not in stocks and bonds; you of large means will think you know how to care for yourselves, but I may venture to suggest that you do not speculate. Let every head of every household aim to own his own home, free from mortgage. Let every man who has a garden spot, garden it; every man who owns a farm, farm it. — President J. Reuben Clark , Jr., Conference Report, April 1937, p. 26
Interest never sleeps nor sickens nor dies; never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; . . . it never pays taxes; it buys no food; it wears no clothes; it is unhoused and without home and so has no washing, it has neither wife, children, father, mother, nor kinfolk to watch over and care for; it has no expense of living; it has neither weddings nor births nor deaths; it has no love, no sympathy; it is as hard and soulless as a granite cliff. Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.
So much for the interest we pay. Whoever borrows should understand what interest is; it is with them every minute of the day and night. — President J. Reuben Clark, Jr., Conference Report, April 1937, pp.102-103
Live within your means. Get out of debt. Keep out of debt. Lay by for a rainy day which has always come and will come again. Practice and increase your habits of thrift, industry, economy, frugality. Remember that the parable of the ten virgins, the five that were wise and the five that were foolish, can be just as applicable to matters of the temporal world as those of the spiritual. — President J. Reuben Clark, Jr., Conference Report, October 1937, p. 107
Joseph was doing business in Kirtland, and it seemed as though all creation was upon him, to hamper him in every way, and they drove him from his business, and it left him so that some of his debts had to be settled afterwards; and I am thankful to say that they were settled up; still further, we have sent East to New York, to Ohio, and to every place where I had any idea that Joseph had ever done business, and inquired if there was a man left to whom Joseph Smith, Jun., the Prophet, owed a dollar, or a sixpence. If there was we would pay it. But I have not been able to find one. I have advertised this through every neighborhood and place where he formerly lived, consequently I have a right to conclude that all his debts were settled. — Brigham Young, Journal of Discourses, 18:242, June 23, 1874
I realize that young families find it necessary at times to purchase on credit. But we caution you not to buy more than is truly necessary and to pay off your debts as quickly as possible. When money is tight, avoid the extra burden of additional interest charges. Investment debt should be fully secured so as not to encumber a family’s security. Don’t invest in speculative ventures. The spirit of speculation can become intoxicating. Many fortunes have been wiped out by the uncontrolled appetite to accumulate more and more. Let us learn from the sorrows of the past and avoid enslaving our time, energy, and general health to a gluttonous appetite to acquire increased material goods. — Elder N. Eldon Tanner, Ensign, June 1976, p. 4
The lessons taught by the Savior differ widely from these actions. For He taught, in effect, Do unto others as ye would have them do unto you (see Matthew 7:12; 3 Nephi 14:12). He taught, “Behold it is my will that you shall pay all your debts” (D&C 104:78). Yes, even if it takes years, pay your debts. — Elder James M. Paramore, in Conference Report, October 1992; Ensign, November 1992, p. 10
D&C 136:25: If thou borrowest of thy neighbor, thou shalt restore that which thou hast borrowed; and if thou canst not repay then go straightway and tell thy neighbor, lest he condemn thee.
“In other words, do not take the bankruptcy act unless somebody knocks you down.
. . . Now, I am not condemning those who have to take the bankruptcy act; but I know of men whom I have begged and pleaded with to not take the bankruptcy act, who, if they had only had the nerve, the faith, and the willingness to work, would have come out all right. — President Heber J. Grant, Conference Report, October, 1933, p. 7
. . . excessive debt. It is a human tendency to want the things which will give us prominence and prestige. We live in a time when borrowing is easy. We can purchase almost anything we could ever want just by using a credit card or obtaining a loan. Extremely popular are home equity loans, where one can borrow an amount of money equal to the equity he has in his home. What we may not realize is that a home equity loan is equivalent to a second mortgage. The day of reckoning will come if we have continually lived beyond our means. — President Thomas S. Monson, “True to the Faith,” Ensign, May 2006, p. 19
Life is fragile, peace is fragile, civilization itself is fragile. The economy is particularly vulnerable. We have been counseled again and again concerning self-reliance, concerning debt, concerning thrift. So many of our people are heavily in debt for things that are not entirely necessary. . . . I urge you as members of this Church to get free of debt where possible and to have a little laid aside against a rainy day. [Gordon B. Hinckley, “The Times in Which We Live,” Ensign, Nov. 2001, 73]
You might have thought when you heard this counsel that it was good advice for your parents or for others. But, my dear brothers and sisters, it is great counsel for you and for each one of us. Our economy is particularly vulnerable. Today the world in which we live is much more complex than ever before. So many external influences, as well as internal influences, affect us. No one can accurately predict what will take place in even a few months from now–let alone a few years. Consequently we must make preparations for whatever lies ahead. — Elder Sheldon F. Child, BYU Devotional, June 4, 2002
I commend to you the virtues of thrift and industry. In doing so, I do not wish you to be a “tightwad,” if you will pardon that expression, or to be a freeloader, or anything of the kind. But it is the labor and the thrift of people that make a nation strong [and] the family independent. [Gordon B. Hinckley, “Thou Shalt Not Covet,” Ensign, March 1990, 4] — Elder Sheldon F. Child, BYU Devotional, June 4, 2002[That trust [see other excerpts from this talk under “Trust”] has blessed my life and the lives of my family. Years ago I heard President Ezra Taft Benson speak in a conference like this. He counseled us to do all we could to get out of debt and stay out. He mentioned mortgages on houses. He said that it might not be possible, but it would be best if we could pay off all our mortgage debt. (See, for example, Ezra Taft Benson, “Prepare for the Days of Tribulation,” Ensign, Nov. 1980, 33.)
I turned to my wife after the meeting and asked, “Do you think there is any way we could do that?” At first we couldn’t. And then by evening I thought of a property we had acquired in another state. For years we had tried to sell it without success.
But because we trusted God and a few words from the midst of His servant’s message, we placed a phone call Monday morning to the man in San Francisco who had our property listed to sell. I had called him a few weeks before, and he had said then, “We haven’t had anyone show interest in your property for years.”
But on the Monday after conference, I heard an answer that to this day strengthens my trust in God and His servants.
The man on the phone said, “I am surprised by your call. A man came in today inquiring whether he could buy your property.” In amazement I asked, “How much did he offer to pay?” It was a few dollars more than the amount of our mortgage.
A person might say that was only a coincidence. But our mortgage was paid off. And our family still listens for any word in a prophet’s message that might be sent to tell what we should do to find the security and peace God wants for us. — President Henry B. Eyring, “Trust in God, Then Go and Do,” Ensign, October 2010
My brothers and sisters, avoid the philosophy that yesterday’s luxuries have become today’s necessities. They aren’t necessities unless we make them so. Many enter into long-term debt only to find that changes occur: people become ill or incapacitated, companies fail or downsize, jobs are lost, natural disasters befall us. For many reasons, payments on large amounts of debt can no longer be made. Our debt becomes as a Damocles sword hanging over our heads and threatening to destroy us.
I urge you to live within your means. One cannot spend more than one earns and remain solvent. I promise you that you will then be happier than you would be if you were constantly worrying about how to make the next payment on nonessential debt. In the Doctrine and Covenants we read: “Pay the debt thou hast contracted. . . . Release thyself from bondage.” (D&C 19:35) — President Thomas S. Monson, “True to the Faith,” Ensign, May 2006, p. 18
Now, brethren, I want to make it very clear that I am not prophesying, that I am not predicting years of famine in the future. But I am suggesting that the time has come to get our houses in order.
So many of our people are living on the very edge of their incomes. In fact, some are living on borrowings.
We have witnessed in recent weeks wide and fearsome swings in the markets of the world. The economy is a fragile thing. A stumble in the economy in Jakarta or Moscow can immediately affect the entire world. It can eventually reach down to each of us as individuals. There is a portent of stormy weather ahead to which we had better give heed. . . .
I repeat, I hope we will never again see such a depression. But I am troubled by the huge consumer installment debt which hangs over the people of the nation, including our own people. In March 1997 that debt totaled $1.2 trillion, which represented a 7 percent increase over the previous year.
In December of 1997, 55 to 60 million households in the United States carried credit card balances. These balances averaged more than $7,000 and cost $1,000 per year in interest and fees. Consumer debt as a percentage of disposable income rose from 16.3 percent in 1993 to 19.3 percent in 1996.
Everyone knows that every dollar borrowed carries with it the penalty of paying interest. When money cannot be repaid, then bankruptcy follows. There were 1,350,118 bankruptcies in the United States last year. This represented a 50 percent increase from 1992. In the second quarter of this year, nearly 362,000 persons filed for bankruptcy, a record number for a three-month period.
We are beguiled by seductive advertising. Television carries the enticing invitation to borrow up to 125 percent of the value of one’s home. But no mention is made of interest.
President J. Reuben Clark Jr., in the April 1938 general conference, said from this pulpit: “Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you” (in Conference Report, Apr. 1938, 103).
I recognize that it may be necessary to borrow to get a home, of course. But let us buy a home that we can afford and thus ease the payments which will constantly hang over our heads without mercy or respite for as long as 30 years.
No one knows when emergencies will strike. I am somewhat familiar with the case of a man who was highly successful in his profession. He lived in comfort. He built a large home. Then one day he was suddenly involved in a serious accident. Instantly, without warning, he almost lost his life. He was left a cripple. Destroyed was his earning power. He faced huge medical bills. He had other payments to make. He was helpless before his creditors. One moment he was rich, the next he was broke.
Since the beginnings of the Church, the Lord has spoken on this matter of debt. To Martin Harris through revelation He said: “Pay the debt thou hast contracted with the printer. Release thyself from bondage” (D&C 19:35).
President Heber J. Grant spoke repeatedly on this matter from this pulpit. He said: “If there is any one thing that will bring peace and contentment into the human heart, and into the family, it is to live within our means. And if there is any one thing that is grinding and discouraging and disheartening, it is to have debts and obligations that one cannot meet” (Gospel Standards, comp. G. Homer Durham , 111).
We are carrying a message of self-reliance throughout the Church. Self-reliance cannot obtain when there is serious debt hanging over a household. One has neither independence nor freedom from bondage when he is obligated to others.
In managing the affairs of the Church, we have tried to set an example. We have, as a matter of policy, stringently followed the practice of setting aside each year a percentage of the income of the Church against a possible day of need.
I am grateful to be able to say that the Church in all its operations, in all its undertakings, in all of its departments, is able to function without borrowed money. If we cannot get along, we will curtail our programs. We will shrink expenditures to fit the income. We will not borrow. — President Gordon B. Hinckley, “To the Boys and to the Men,” Ensign, November 1998, p. 51
Avoid debt. We used to talk about that a great deal, but today everything is seemingly geared toward debt. “Get your cards, and buy everything on time”: you’re encouraged to do it. But the truth is that we don’t need to do it to live. . . . We encourage all Latter-day Saint families to become self-reliant and independent. The greatness of a people and of a nation begins in the home. Let us dedicate ourselves to strengthening and beautifying the home in every way we can. — President Spencer W. Kimball, “Family Preparedness,” General Conference, May 1976
A man who will not pay his honest debts is no Latter-day Saint, if he has the means to pay them. A man who will run into debt, when he has no prospect of paying it back again, does not understand the principles that should prevail.— Brigham Young, Journal of Discourses, 11:258
It is bad enough, quite bad enough, to borrow from an enemy and not to repay him; to do this is beneath the character of any human being; but all who will borrow from a friend, and especially from the poor, are undeserving the fellowship of the Saints if they do not repay. — Discourses of Brigham Young, 304