Living Beyond Your Means?

In light of recent events that have garnered the bulk of the national media's attention, I have decided to share my own thoughts on the state of the economy. It's difficult to sift through the garbage in Washington, but one thing is for sure: Too many people are living beyond their means. It is precisely at a time like this that I am glad to have the knowledge of a living prophet. It's a shame that not everyone can comprehend the benefit of having someone in this generation called to speak for the Lord the same way Moses, Abraham, and Isaiah did many years ago.

While those that do not share similar beliefs may read this with distain, let me explain why I feel this way. On 27 February 1833, the Word of Wisdom -- a law of health revealed for the physical and spiritual benefit of His children -- was revealed by the Lord through a living prophet. Again, to those that do not share similar beliefs, that may not mean anything to you. But couple that bit of information with the fact that the lethal dangers of smoking were not known until the 20th century and you can begin to see the importance of modern-day revelation.

This leads me to the topic of the poor economy that this great nation is struggling with right now. I listened to talk radio shows, watched the news, and talked with co-workers to learn from other points-of-view. The more I thought about it, the more I realized that we were warned about the causes of this many years ago.

In the mid-1970s, Spencer W. Kimball shared this great counsel:

Avoid debt. ... 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 wonder what our people will do who have been spending their all and more. If employment and income should reduce, what then? Are you living beyond your means? Do you owe what you cannot pay if times became perilous? Are your shock absorbers in condition to take a shock? Plan and work in a way that will permit you to be happy ever as you do without certain things that in times of affluence may have been available to you. Live within your means and not beyond them. ... Purchase your essentials wisely and carefully. Strive to save a portion of that which you earn. Do not mistake many wants for basic needs.

In October 1998, Gordon B. Hinckley gave us this warning:

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 manyof 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.

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. 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.

I urge you, brethren, to look to the condition of your finances. I urge you to be modest in your expenditures; discipline yourselves in your purchases to avoid debt to the extent possible. Pay off debt as quickly as you can, and free yourselves from bondage. This is a part of the temporal gospel in which we believe. May the Lord bless you, my beloved brethren, to set your houses in order. If you have paid your debts, if you have a reserve, even though it be small, then should storms howl about your head, you will have shelter for your wives and children and peace in your hearts. That’s all I have to say about it, but I wish to say it with all the emphasis of which I am capable.

The warnings do not begin or end with these two; there are many more. It seems to me that -- from top to bottom -- there was/is too much greed (or perhaps envy for what others have?) to acquire things outside of our means. Why do our tax dollars have to "rescue" the bad practices of rich CEOs? Why don't the tax payers get "bailed out"? Why does a 3-page bill have to increase to a 451-page bill? Why can't these banks/institutions simply take out a loan from the government the same way they granted balloon mortgage loans to people they knew would not be able to afford it? Time will tell how this turns out. I hope all of us can learn from the mistakes that were made so something like this does not repeat itself. I hope for the best, but I fear the worst.