Utah Families and Their Finances

Here in Utah, I’ve observed:
1.) Families getting approved for 30-40% debt-to-income mortgage payments without the banks taking into account that these families are paying 10% of their income to their church (I had a financial planner once ask if I was a full tithe payer. When I answered affirmatively, he said he always advises his tithe-paying clients to only get a mortgage that’s 20% DTI. Few families talk to an independent financial planner before getting into a house payment . . . ),
2.) People living paycheck to paycheck with no savings to fall back on in the event of illness, accident, or layoff,
3.) Large families relying on a single breadwinner (father) despite the family’s inability to afford that luxury (mom staying home),
4.) Little affordable housing for low-income families (I have a friend who’d love to move her family back to Utah but can’t afford to since housing is quite expensive here–She lives in Illinois),
5.) A proliferation of pay day loan shops being built (People must be turning to these lending institutions to weather a temporary hardship, only to end up further and further in the hole. Why Utah allows such shops to charge their exorbitant fees and 30+% interest rates, I cannot understand . . . ),
6.) Few older vehicles on the road, lots of leasing of brand new vehicles, expensive SUVs galore, 3- and 4-car families (plus insurance for all those cars), almost no self-discipline to save in order to pay cash for a car, very little use of public buses, etc.,
7.) Consumer (credit card) debt for luxuries,
8.) Faith that the checkbook will balance if members just pay their tithing first.

Duh, people! God isn’t going to save us from our own stupid financial mistakes!!!! Just because banks allow people to live beyond their means via credit doesn’t mean that we should do so (in the naive faith that God will protect us financially because we always pay him first)– The banks don’t offer us credit cards and home equity loans because they like us, and God doesn’t bail out every person of faith who makes a bad financial decision after Sunday offering! In former generations, people stopped spending when they ran out of cash. Now, people make compulsive purchases long past the point of prudent living and then pray that their prosperity will persist. (How’s that for a Maxwellism?) I could soap box for hours on this! . . .

Why do people expect the church to subsidize them in a house (or cars) they cannot afford?! Rather than turn immediately to the church when money gets too tight, they need to do some serious soul searching to find solutions for their financial problems. I know many feel hopeless when it comes to their finances, but there are always choices to be made: move to cheaper housing, sell one’s cars and take the bus or bike or carpool, cancel credit cards, re-negotiate with creditors, send mom to work or have her work out of the home, move back in with family temporarily to work on debt elimination, plan for additional education to improve one’s marketability and earning potential, stop eating out, learn to cook from scratch, change insurance policies to a higher deductible (provided you put the premium savings directly into an “emergency” fund), have your teenagers get a job to pay for their clothing/car insurance/gasoline/lessons, etc. Only after careful planning should we go to the bishop for financial help, expecting that it will only be TEMPORARY as we make the necessary transitions to a sustainable standard of living.

If people have no savings, no “rainy day funds,” they are NOT prepared to get into a mortgage, car loan, or voluntary consumer debt. Period. They need to have savings with which to make their monthly payments in the event of interrupted earnings. (It’s not the bishop’s responsibility to be our “emergency” funds . . . ) Likewise, even if people can meet the monthly obligations of their debts and other expenses now, if they can’t afford to also set aside some money each month towards their “emergency” fund, they are living beyond their means (because emergencies WILL come up–whether it’s a root canal, deductible on the house, major appliance repair, new tires, bereavement flight, or emergency room co-pay).

I wish passing a financial planning course were required for high school graduation (as well as for approval on any loan or line of credit). But again, banks are banking on our stupidity . . . As Erik always says: “People who understand interest earn it. People who don’t understand interest pay it. People who understand math run casinos. People who don’t understand math gamble there.”

I’ve always liked that the church encourages its members to live within their means, save for a rainy day, and avoid unnecessary debt. But, of course, they couple that with “Don’t delay having children while you’re in college,” “The Windows of heaven will open if you pay a full tithe [20% is even better!],” “Mothers, stay home”. . . We need to be wise. Paying tithing does not mean we will be free from the consequences of our lack of planning.

Best wishes, all who are struggling in this difficult economy. It’s a time that requires wisdom, frugality, planning, and discipline–and inspiration/introspection to know where to focus our time, means, and talents.

Wanted to share . . .
_________________
Happy moments, praise God.
Difficult moments, seek God.
Quiet moments, worship God.
Painful moments, trust God.
Every moment, thank God.

About Shaunalei

Sometimes working toward peace is a serious business; other times it's just a whole lot of fun. I created "Peace by Piece" as a storehouse for some of my thoughts. (Aren't you lucky to have found them?!) Enjoy!
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