Learn—Maximum Time: 45 Minutes

“Learn—Maximum Time: 45 Minutes,” Personal Finances for Self-Reliance (2017), 146–54


Today’s Discussion:

2 Protect Your Family from Hardship


Financial Stewardship Success Map

Budget and Spending Checkpoint


Review and update your budget. What is working well? What categories do you need to adjust, if any? Can you spend less in some categories to more quickly save up for your emergency fund, become debt free, or save for the future? One of your commitments this week will be to discuss the following activity during family council.


What will you do if you encounter a financial crisis? What financial crises have you experienced in the past?


In the Old Testament, Joseph forewarned Pharaoh of seven years of plenty, followed by seven years of famine. Immediately, Pharaoh appointed officers to set aside extra from the good years to prepare for the bad (see Genesis 41:1–37). While we may not always have a clear prophecy of when the good and bad times will come, prophets today have encouraged us to prepare for crises, especially when things are going well.

In this chapter, we will learn what to do when we face a financial crisis and how to prepare for crises before they occur.


What types of financial crises might you encounter? Write down the group’s ideas below.

1. Learn to Manage Financial Crises


Like an emergency or fire escape plan, in the event of a financial crisis you should have a course of action that is simple to follow. About managing trials, Elder Marvin J. Ashton asked, “Can you quietly sit down, review the facts, and list all the possible courses of action? Can you identify causes and determine remedies? Quiet contemplation can solve problems more quickly than frantic force” (“Give with Wisdom That They May Receive with Dignity,” Ensign, Nov. 1981, 88). Determining how to handle financial crises beforehand will allow you to be emotionally and financially prepared when hardship strikes and can help you prevent some crises in the future. Managing a financial crisis requires two steps: assess the situation, and take appropriate action.


Why is it important to decide now how to manage a financial crisis? How has the Spirit helped you handle crises in the past?

Assess the Situation


To assess a potential financial crisis, you may want to ask the following questions:

  • Are you faithful in paying your tithing and offerings? Are you living your life in such a way that you are worthy of God’s blessings?

  • What emergency precautions have you already put in place that will help you face the current challenge? Do you have food and water storage? an emergency fund? proper insurance?

  • Where do your emergency preparations fall short?

  • What insurance policies do you have that may cover some or all of this challenge?

  • How long will you be able to stretch out your emergency fund?

  • Is there room in your budget and debt elimination plan for temporary adjustments, if needed?


Why is it important to thoroughly assess a situation before you take action?

Take Action


Depending on the type and severity of your financial crisis, there are different actions you might be able to take to help you overcome your financial challenges. While these actions may not make sense for all situations, the following steps should give you an idea of what can be done in the event of a financial crisis.

Call Your Insurance Company


Some financial crises may involve a health emergency, an automobile accident, home repairs, or job loss. For such situations, before you panic or take other actions, call your insurance provider to check coverage. Asking them about coverage doesn’t mean you are filing a claim. But if your situation is covered, you should be able to get a sense of what your personal expenses are going to be.


What financial crises merit a call to your insurance company?

Use Your Emergency Fund


The purpose of your emergency fund is to help you get through financial crises. Do not feel guilty for using it for these situations. You can use your emergency fund for whatever you need—from living expenses to insurance deductibles. Be wise about using it for the right things at the right times. Replenish your emergency fund as fast as possible if you have to use money from it.

Pay Your Most Important Expenses and Bills First


Closely examine all of your expenses and bills and determine which must be taken care of immediately and which could be delayed for a short period without great penalty. It may be necessary to call your billers to see if they have temporary hardship grace periods, interest-free payment plan options, or due-date extensions. Be wise about which expenses you take care of first, and research the adverse effects of deferring the payment of other bills before doing so. You may need to cut unnecessary expenses for a time, if possible. Focus on food, shelter, utilities, and necessary transportation before paying other expenses.


Why would it be most important to pay the expenses just listed first?

Call Your Creditors


In extreme circumstances, it may be wise to call your creditors and explain your current situation. Depending on the crisis, you may want to ask them to:

  • Temporarily delay or reduce payments.

  • Extend or permanently modify the terms of the loan.

While this may be the only viable option in extreme cases, beware that delaying payments or modifying the terms of your loan can trigger additional fees and make the loan more expensive in the long run.

Identify Other Resources That Can Help


Our responsibility is to provide for ourselves and our families. However, there may be times when we must temporarily rely on others. As you seek other resources, be cautious of becoming dependent on assistance long-term—such dependence will stunt your spiritual and temporal progress. As we read in chapter 2, President Spencer W. Kimball taught that there are four tiers of temporal help we can turn to:

  1. Self: You should first do all that you can yourself to provide for your family and alleviate immediate threat.

  2. Family: If you are unable to meet basic financial needs yourself after doing all that you personally can, you should reach out to close or extended family if needed for temporary financial assistance, whether for housing, food, or other needs.

  3. Church: After doing all you can yourself and then seeking assistance from family, you may need to meet with your Church leaders (bishop, branch president, or Relief Society president) to explore additional options. Remember that your Church leaders are wisely instructed to help people sustain life when necessary, not lifestyle.

  4. Community: Various community or government support programs may be available to you that may offer aid in the form of financial or employment counseling, housing assistance, nutritional support for newborn and maternal health, and so forth. Remember that these programs are designed to provide short-term assistance. Do not rely on them long term.


Why should we seek help from our family before seeking help from the Church and community? What resources that your group has identified are available in your area to help cope with crises?

2. Increase Your Emergency Preparations


You should have or should be working on building a one-month emergency fund. Your preparations should not end there! Work to become free from consumer debt and to then build a three- to six-month emergency fund and acquire insurance to protect your income.

Build a Three- to Six-Month Emergency Fund


After you have paid off all of your consumer debt, the next step is to grow your one-month emergency fund into a three- to six-month emergency fund. Remember to keep the money for your emergency fund in a safe place that you can access without penalty. Grow this fund as quickly as you can so that you are better prepared for financial crises. One of your commitments this week will be to evaluate your emergency fund and to continue to pay off your consumer debts.

Acquire Appropriate Income Insurance

Note: This information may not apply to your region or area.


One of your most important assets is your income. Research reputable disability and life insurance policies in your area, and obtain adequate coverage as quickly as possible.

Discuss Preparing for Financial Crises in Your Family Council


One of your commitments this week will be to discuss your responses to “Budget and Spending Checkpoint” (see page 147) and your preparations for financial crises. Discuss emergencies that may occur in your family, how you can prepare for them, what insurance you may need to obtain to help protect yourself, and plans to call billers and creditors should the need arise. You may want to use the “Sample Family Council Discussion” outline below. Remember, if you are not married, your family council might include a roommate, friend, family member, or mentor.