Chapter

Managing Economic Resources

Chapter 8

Chapter OverviewI. Introductory “Quiz”II. Thought for the WeekIII. Handout PacketIV. Consider the FollowingV. A Simple Budget & Homework AnalysisVI. Critical ThinkingVII. Homework

I. Introductory “Quiz”

1. Financial concerns are less commonly sources of stress to the

upper classes as they are to the lower classes.

False

2. Wealth and happiness are strongly correlated.

False

3. Happy couples are significantly less likely to have major debts

than unhappy couples.

True

4. Money arguments in the home are usually about power, not about

money per se.

True

5. During financial difficulties, one’s coping abilities (the sense of

confidence in their abilities to meet changing situations) are

crucial.

True

6. Money is often a taboo topic during courtship.

True

7. The meaning of money is often different between family members

and even spouses.

True

8. The difference between the incomes of males and females in

Black and Hispanic families is smaller than that in White

families.

True

9. It could be a very good idea for a couple to pool most of their income and keep smaller but

separate checking accounts and credit cards.

True

10. By saving a few hundred dollars a month over 30 or 40 years, a person can become a

millionaire.

True

II. Thought for the Week:Fix it up.

Wear it out.Make it do,

Or do without.

III. Handout Packet:What Does Money Mean to You?

IV. Consider the Following

A. The Nature of InterestB. The Ferrier’s “Deal”C. Mental Set

“Interest is a good servant but a terrible master.”

Joseph Wirthlin

“Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation…Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.

J. Reuben Clark Jr.

“Once you understand the nature of interest, you want it coming in, not

going out.”Douglas Busaith

IV. Consider the Following (cont.)

A. The Nature of InterestB. The Ferrier’s “Deal”C. Mental Set

C. Mental Set

• Spend less than you earn. • Learn to save. • Honor your financial obligations. • Buy life insurance• Teach your children to follow your

example

V. A Simple Budget & Homework Analysis

A. The BudgetB. Analyze “Expenses” HomeworkC. Big DiscussionD. Collect Homework

VI. Critical Thinking:• Do not leave yourself or your family

unprotected against financial storms…Build up savings.

Ezra Taft Benson • Get out of debt and stay out of debt.

• The great majority of all our troubles today is caused through the failure to stay out of debt.

Harold B. Lee

In light of the above, when is it OK to go into debt?

VII. HomeworkA. New Couple BudgetB. Reaction Paper