The purpose of this website on Personal Finance is to instruct members of The Church of Jesus Christ of Latter-day Saints and others around the world about personal financial management from "another" perspective. This instruction is provided through a series of lessons delivered over the Internet and available through free personal finance manuals. While there is no college credit given for reviewing this material, there is a wealth of information provided that can help you learn about personal finance.
These lessons are designed to help you do the following:
- Understand the purpose of wealth, and apply the counsel of the scriptures and Church leaders regarding wealth.
- Set personal goals that will help you progress toward financial and spiritual self-reliance.
- Identify your past and current financial situation, and learn basic tools to help you solve current financial problems and prepare for the future.
- Learn key areas of financial responsibility and the need for constant vigilance in financial matters.
Major advantages to developing this material at the Marriott School of Management at Brigham Young University are:
- Fewer copyright restrictions, allowing freer distribution of material for non-commercial purposes.
- No hidden agenda, avoiding biases that may prevail in other personal finance information and training materials.
- A correct perspective, with materials presented in the context of modern revelation and therefore higher goals than traditional wealth maximization.
Material for this series was originally developed for an undergraduate student audience, so non-college students may find this information helpful. Additional personal finance courses have been added that target different age groups, such as high school and college students using the same Internet and database infrastructure. In addition, those working in Marriott School research and advisement centers and others outside the university may be interested in adapting the material used in this series to accommodate people with more basic personal finance needs. By partnering with these groups, this series can reach an even wider audience, including those in other nations.
In an effort to meet the financial needs of the community for the Church of Jesus Christ-latter Day Saints, this series includes critical, pertinent, relevant, and unbiased (as much as possible) financial information via the Internet. We began by compiling information from faculty and students inside the Marriott School of Management and professionals outside the School. We then prepared the information and submitted the material for review to the Marriott School Finance and Managerial Economics faculty who added their comments and approved the material. We have received endorsement from the Marriott School to allow us to publish this website with the Marriott School of Management name.
We hope that you will take the time to read all of the sections, as each section provides valuable information about managing your personal finances from "another" perspective. Please feel free to comment on the sections as well: let us know what we can do better, which sections need to be strengthened, and how we can make this a more useful and worthwhile Web site.
Welcome by the Dean
Welcome to the BYU Marriott project on personal finance. A solid understanding of basic financial principles and the ability to manage finances wisely are important factors in the well-being of individuals and families. This project is one of our many efforts to increase the financial literacy and self-reliance of our students as well as of families and friends outside the University.
As you work through your material on this website, I hope you will take the time to do three things.
First, read and study the material. Each chapter offers valuable information that will enrich your understanding of personal finance. The chapters have been carefully reviewed by the faculty and staff at BYU Marriott. We think they are informative and clearly written. They are organized to be useful to young people with little financial knowledge, people who have extensive experience in financial matters, and everyone in between.
Second, as you read, focus on the principles taught in the course. We emphasize principles because principles don’t change over time. Types of financial assets, investment vehicles, and even financial theories may change, but principles do not. This focus will help you stay on course as you make financial decisions for yourself and your family over time, even as the financial environment around you changes.
Finally, apply these principles to your life by developing your own “Personal Financial Plan.” Spencer W. Kimball has counseled, “To be sure your life will be full and abundant, you must plan your life” (Ensign, May 1974, 86). Think through and write down your vision and goals, the things you want to achieve in life. Develop a financial plan to help you accomplish your goals and then work to implement your plan. Such planning may be the most important tool for achieving your personal and financial goals.
Thank you for your interest in the material on this website. May this be the start of even greater learning and understanding as you work toward greater financial self-reliance.
Brigette C. Madrian
Dean and Marriott Distinguished Professor
Brigham Young University Marriott School of Business
How This Website is Different
Dave Ramsey, a nationally syndicated radio talk show host, commented, “Personal finance is more personal than it is finance: it is more behavior than it is math” (KNBR, May 23, 2007). Learning about personal finance requires more than learning the languages of finance and math and more than just a change in spending habits—it requires a change in behavior. The four characteristics that make the courses on this website different from other courses on personal finance can help effect this change in behavior.
First, we take a different perspective on personal finance. Perspective—the way we look at things—influences our financial self-reliance because it influences the choices we make. Concerning perspective, the historian Will Durant wrote, “We need ‘to seize the value and perspective of passing things. . . . We want to know that the little things are little, and the big things big, before it is too late; we want to see things now as they will seem forever—‘in the light of eternity.’”
Our perspective throughout this website is unique. It is that personal finance is not separate from our Christian lives. Rather, personal finance is simply part of our Christian lives, and part of living the gospel of Jesus Christ. On this website, our perspective on personal finance is based on a long-term view of what truly matters, which will guide you as you make financial choices.
Second, we take a principles, doctrines and applications-based approach to personal finance. This helps us change our perspective on what we are doing. Unlike investment theory, investment vehicles, and financial assets, principles and doctrines never change. A sound understanding of the correct principles and doctrines of personal finance will act as a compass to guide you as you work toward achieving your personal and family goals. Richard G. Scott commented:
[The] inspired statement, “I teach them correct principles, and they govern themselves,” still applies. The Lord uses that pattern with us. . . Your consistent adherence to principle overcomes the alluring yet false life-styles that surround you. Your faithful compliance to correct principles will generate criticism and ridicule from others, yet the results are so eternally worthwhile that they warrant your every sacrifice.
Through the material on this website, you will learn how principles, doctrines and application relate to every aspect of your personal finances. Understanding correct principles and doctrines helps increase our motivation to act and makes it easier to follow and apply the concepts discussed on this website to our personal lives.
Third, we don’t just talk about what you can do, we give plans and strategies to help you in creating your own personal plans in 16 important areas. Seeing what others have done and are doing in specific areas can give you ideas and strategies on how you can create your vision in those areas.
Finally, we take an applications-based or creative approach to personal finance. Application is an invitation to learn and create. We discuss the creative process in terms of how we are all creators of our vision, goals and lives. It is not enough to know what you want to do in our lives and families—we must do it. Accordingly, the final difference is that we apply the things learned in this manual in the creation of your individual or family Personal Financial Plan. This is part of Ezra Taft Benson’s advice to “Plan your financial future early, then live your plan.”
To help you apply your learning and planning, we offer this website. With multi-disciplinary courses, this website includes course manuals, PowerPoint presentations, learning tools, videos of personal finance classes taught at BYU, and other personal finance manuals compiled and developed by the faculty and staff at Brigham Young University. These tools will help you catch your vision, set goals, and develop plans and strategies to help you create a budget, work toward getting out of debt, evaluate different investments, buy a house or a car, invest wisely, save for retirement, and more. You will also receive extensive instructions for developing your own Personal Financial Plan, including helpful examples of completed financial plans.
We believe that by changing your perspective, learning the doctrines, principles and applications that support successful financial management, giving examples of visions, goals and strategies in each key area, and then having you apply this knowledge to your own life in creating your own personal Financial Plan with the tools we’ve provided, will increase your financial literacy and motivation, and will help you achieve the vision and goals that are most important to you and your family. If you do this thoughtfully, carefully and prayerfully, it will help change behavior. Best of luck to you as you begin this wonderful journey to increased financial self-reliance.
Copyright and Other Restrictions
We have prepared this website along with accompanying manuals and courses as free resources to help students, faculty, and families both inside and outside the University become more financially self-reliant. As such, we encourage use of these materials under the fair use clause of the 1976 Copyright Act (See Section 107 of Chapter 1 of the Copyright Law of the United States of America). Unless otherwise noted, the individual images, text and objects from the website are available for nonprofit and educational purposes, such as research, teaching, and private study. For these limited purposes, you may reproduce (print, download, or make copies of) these materials without prior permission.
We also encourage the free use of these materials by educational, non-profit, and other institutions. Please feel free to download and copy these personal finance manuals, Learning Tools, PowerPoint presentations, and all other materials from the website as needed for your schools and colleges. We have also included lesson plans and PowerPoint presentations on this website that are used here at Brigham Young University’s Marriott School of Business to help in the teaching of these materials.
Use of a particular item for other purposes, including commercial purposes, requires prior written permission. Materials and content contained in this manual and website may be protected by U.S. copyright law (Title 17, U.S.C.) and/or by the copyright or neighboring-rights laws of other nations. Additionally, the reproduction of some materials may be restricted by privacy and/or publicity rights.
Unless otherwise indicated, the material on this site is copyright (c) Bryan Sudweeks and is shared with you under the terms of the Creative Commons Attribution-Noncommercial-Share Alike license.
You are free to share, copy, distribute and transmit the work as well as to remix or adapt the work under the following conditions:
• Attribution - You must attribute the work in the manner specified by the author or licensor (but not in any way that suggests that they endorse you or your use of the work).
• Noncommercial - You may not use this work for commercial purposes.
• Share Alike - If you alter, transform, or build upon this work, you may distribute the resulting work only under the same or similar license to this one.
For any reuse or distribution, you must make clear to others the license terms of this work. The best way to do this is with a link to the Copyright web page of the website. Any of the above conditions can be waived if you get permission from the copyright holder. Nothing in this license impairs or restricts the author's moral rights.
Welcome to this website and the manuals on Personal Finance. We have compiled information on what we consider the most important areas of personal finance for students, individuals, and families. We have developed a principles- and applications-based framework that we hope is clear and concise, and that applies the best practices used in the industry. While there may be differences of opinion as to what are the best practices in the areas discussed, this platform was developed to facilitate review and discussion of those practices.
The ideas presented on this website were written for a Christian audience with membership in The Church of Jesus Christ of Latter-day Saint; however, the principles taught can be extended to members of any Christian faith. Readers who are not of the this faith may encounter a few unfamiliar terms within this text. While these terms may provide valuable insights to members of the Church of Jesus Christ, a thorough understanding of these terms is not required to understand the financial principles taught here. If you have questions about any of these terms, feel free to contact me at firstname.lastname@example.org, or visit The Church of Jesus Christ of Latter-day Saints’ website by clicking here for more information.
This website and the accompanying manuals are updated every year for new information, changes to tax laws, improvements in teaching methodologies, etc. As such, I would appreciate feedback to help make the manual and website better and more useful. While I have tried to present the material in as fair and balanced a framework as possible and am incorporating changes as they become apparent, there may be errors of omission or commission. While this personal finance manual and the website have been approved by Brigham Young University’s Marriott School of Business for distribution, they remain the work of the author. Any errors are solely my responsibility and are not the responsibility of the Marriott School of Business, the faculty, or Brigham Young University.
Bryan L. Sudweeks, Ph.D., CFA
I express appreciation to the Rollins Center for eBusiness of the Marriott School of Business for its help and support in maintaining the website, the H. Taylor Peery Institute of Financial Services at the Marriott School for its help and support with the content, and the BYU Center for Teaching and Learning for its help with website hosting, design and implementation. Thanks also to Laura Dearden for the cover photos and design of the printed versions.
I particularly want to thank the wonderful professors and staff who have helped in this process, specifically Jim Brau, Grant McQueen, Steve Thorley, Bernell Stone, Scott Sampson, Brent Wilson, Barrett Slade, Andy Holmes, Craig Merrill, Jim Engebretsen, Bruce Burgon, Skip Koller, Mike Pinegar, Steve Nadauld, Dean Longmore, Hal Heaton, Phil Bryson, Bob Crawford, Keith Vorkink, Brian Spilker, and Joan Young of the Marriott School of Business; Madison Sowell, BYU Honors Program Director; E. Jeffrey Hill, Ashley LeBaron and Craig Israelsen of the School of Family Life; Todd Martin and Marilyn Miner of BYU Financial Aid; Michael C. Johnson, Dave Egbert, Blake Herzinger, Lynne Allred, David Hellewell, Andrea Velasquez, and David Eves of Center for Teaching and Learning; Michael Orme and Steve Sandberg of the BYU Legal Department; Dann Battistone of the BYU Athletic Department; and Melvin Thorne, Laura Rawlins, Kim Sandoval, Taylor Rouanzion, Christina Champenois, Denise Remy, Camille Hartwig, Katie Newbold, and Jennifer McDaniel of the BYU Faculty Editing Service for their help and guidance.
I also appreciate the thoughtful comments of Jim Seaberg, Lodestar Capital, Stan Benfel of Beneficial Life; Claralyn Hill, attorney-at-law; Rick Hutchins of Novogradac; Fred Hockenjos of BJ Associates; Jason Payne of Payne Financial Management; Creed Archibald and Phil Sudweeks of Farmers Insurance; Dan Wilson of the Church of Jesus Christ of Latter-day Saints; Tyler Vongsawad of Northwest Mutual; and David Clark of Intermountain Healthcare.
I am thankful for all the hard work and suggestions from my many teaching assistants and students who have helped on this project, including Dallin Anderson, Steve Ashton, Josh Ashworth, Hannah Ballard, John Beck, Will Beck, Mark Bohne, Dan Brown, Craig Bench, Jamon Clark, Hunter Christensen, Derek Collette, Mark Cope, Steve Forsyth, Randy Francis, Nick Greer, Armando Gutierrez, Joshua Flade, Steve Forsyth, Benjamin Hafen, Spencer Hafen, Brian Harris, Sam Hawkins, Matt Herbert, Tanner Hiatt, Greg and Heather Hirschi, Lindsay Johnson, Charlotte Larson, April Lindgren Jones, Joseph Lunt, Grayland Martin, Nathan Mickelson, Megan Palmer, James Pearce, Randy Francis, Monte Schaffer, Preston Taylor, Jeff Willson, Breckyn Wood and Daniel Xu. I am also very appreciative of the many students who have added ideas and comments that have helped improve this manual, classes and website.
Finally, special thanks goes to my wonderful wife, Anne, and our seven children, Kimberly (and Lane, Logan, Ryan, and Marcus Aldrich), Natalie (and Taylor, Halle, Dylan, Jordan and Wesley Barrett), Laura (and Devin Dearden), Clinton (and Abby), Emilee, Ashley, and Kaili, for all their love and support. They have been wonderful to put up with a dad who asks too many questions and makes too many comments on the topic of personal finance. Without them and their love and support, this project would not have been possible.
Recent Website Updates
As part of our efforts to provide clear, principles-based, and updated information, we have completed three major activities.
First, we have finalized the new website. This format is easier to understand, follow, and should help users get more out of the website. I appreciate so much the help of the wonderful staff at BYU's Center for Teaching and Learning for all their thought, help, guidance, and counsel. It is a much better product because of their work.
Second, we have updated all eight personal finance manuals for August 2013 including all tax, investment, retirement, and estate planning information. This is our sixth edition of this material, and we appreciate all the comments and help that have brought it to where it is today. Thank you for your help and support.
Third, we have been working closely with the professionals at MoneyWise Financial Workshops. Those materials have also been updated for 2013 and are now available on this website under the intermediate lessons. We strongly encourage their use.
Thank you for your consideration and use of this website. If there are other things you would like to see in this location, please contact the webmaster at email@example.com. We are trying to be a consistent, unbiased and valuable resource to those looking to understand personal finance from a correct and principles-based perspective.