Hard times have lead to many of us thinking of our finances. Members of The Church of Jesus Christ of Latter-day Saints (also known as Mormons), like anyone, are not immune. In fact, there are some very unique things Mormons have to think of which those of other faiths don't when it comes to finances. This article was written by Devin Thorpe, author of "Building Wealth for Building the Kingdom: A Financial Planning Guide for Latter-day Saint Families". Devin has owned and operated an investment-banking firm, which included an investment advisory business, a mortgage brokerage and having served in a variety of corporate finance positions. He has unique experience in this area. You can buy his book here.
There are many people both within and without of the Mormon community that might ask “how is financial planning for Mormon families different from that of other families?”
There are five key differences:
- Larger families: Members of The Church of Jesus Christ of Latter-day Saints on average have larger families than other people in America. This not only means that there are more mouths to feed, but more college tuition to plan for and at least a desire if not a need for larger homes.
- Tithing: Mormons are not alone in the world in making contributions to their church, but devout members of the faith donate more than 10% of their income to the Church—more than three times the average charitable contribution deduction taken by those who itemize their deductions in the U.S.
- Missions-Young: Male members of the LDS faith are expected to serve two-year missions—at their own expense—at age 19. While optimally, this expense would be born by the 19-year-old who serves, most often the expense falls to the family. Young women are also invited to serve missions at age 21 if they choose, again, at their own expense.
- Missions-Senior: The LDS Church asks senior couples to serve another mission when they enter retirement. This requires not only good financial planning but other sacrifices as well; the time when seniors are entering retirement is exactly the time when their children are typically having children—something that no grandmother ever wants to miss.
- “Consecration”: Latter-day Saints believe in the principle of consecration, of devoting all of their resources to building up “the Kingdom of God.” In the 1800s, the Church experimented with literally taking title to member’s assets. While that practice was not continued, members continue to avow their belief in the principle, leading some to place much of their assets in trust for the benefit of the Church. Others find that simply living a life that includes a large family and lots of missionary service leaves substantially all of the assets spent anyway.
When approaching financial planning, Mormons are wise to seek counsel from financial advisors who are familiar with LDS financial planning—not necessarily Mormons, of course. Everyone who seeks financial advice is wise to remember that it is your money—not your adviser’s money—and that you make the financial decisions after obtaining good counsel.
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