Financial Peace

I am a firm believer that everyone has a story and everyone’s story can benefit at least one other person. I have been encouraged, inspired, and challenged when I hear the stories of others, and I hope my blog and the conversations I have with others can be just as inspiring and challenging to you. Over the next few months, I want to share what some others have to say, and since I’ve recently focused on a financial mini-series on my blog, I’ll start with Dave and Melody Kutch.

I’ve known Dave and Melody for many years. I taught their son LJ in fifth grade. Dave and Melody also led a small group Bible study that I attended, and over the years we have become good friends. In addition to leading a small group, Dave has also led the Financial Peace University series at Parker Hill Community Church for several years. I asked Dave how that came about.

“That is one of those cool ‘God things’ that you hear people talk about. Finances have played a big part of my spiritual journey; God has used money to get my attention, break and reshape my heart. I was not looking for something extra to occupy my time or a ministry to lead, that’s for sure. After returning home from a temporary tour of duty to Kandahar, Afghanistan, I just didn't feel like God was calling me to be a small group leader anymore, but on the other hand I really felt that He had some other plan for me. To be perfectly frank, after spending a year in a war zone I just wanted to take a break and spend some time with my family. I asked for a meeting with Jason Castelli, who at the time was overseeing the small group program at Parker Hill. We met and talked about my personal testimony and at the end of the meeting Jason agreed that I should take a sabbatical from being a small group leader for a year. Two weeks after our conversation Jason sent me an email asking for my help. The current leaders of FPU, Steve and Jenny Mann, were not going to be able to attend all of the classes and were looking for a Co-leader to help with those few weeks where they would be traveling. After hearing my personal testimony, which centered around personal finance, Jason thought this might be a good fit and it would ONLY require a 9 week commitment.” Dave laughed and added, “A 9 week commitment; that still cracks me up!”

That was several years ago, and Dave has taken on the full responsibility of teaching FPU. Financial Peace University focuses on creating a plan to get out of debt. Dave told me how a plan has helped him and Melody get out of debt. “I have always been allergic to debt. I don’t like owing money, or anything else for that matter. Dave Ramsey’s Financial Peace University gave us something that I never had before: a plan.” Dave and Melody sat down, evaluated their income and how much they needed to spend to live, and pretty soon they were shredding “tangible amounts” off their debt. Dave said, “After we realized how effective a plan could be, it was just a matter of sprinting to the finish line.” They paid off $18,000 in just eighteen months, once they had a plan in place.

Dave Kutch believes in Dave Ramsey’s Financial Peace University because he has seen it work. It works because it helps a person or household create a plan, following what Ramsey calls “Seven baby Steps.” Dave Kutch points out that the steps must be followed in order. “It’s not a buffet,” he said. We’ll address those seven steps later.

Dave told me, “Way too often, we sit in church or read someone’s post of Facebook or maybe even open our Bibles and read something like, ‘The rich rule over the poor and the borrower is slave to the lender.’ (Proverbs 22:7) Immediately after reading that, if you are like me, you say to yourself, ‘That’s nice but how do I get out of debt?’ Well, let me tell you the key. The key is not to just read it but to accept it as truth. Then allowing that truth to move about two feet from your head into your heart, to the point where it changes your life.”

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What changes would you like to see in your life and in your family’s life? Do you wish you could spend more time with your kids but find yourself working extra hours at the office to make ends meet? Do your kids have to give up sports or other activities because the expenses are too great to absorb into the budget? Would you like to take a family vacation but can never swing it?

Having a plan is the first step. It's not out of reach! Start with a plan, and you’ll see progress soon enough, and as with all such plans, a little success translates into motivation. Motivation feeds success, and the cycle continues. And rather than a downward spiral into debt and struggle, it will be an upward spiral into freedom.

Here are Dave Ramsey’s Seven Baby Steps to get you started:

1. Starter Emergency Fund of $1,000 ($500 if your income is under $20K a year)

2. Work your Debt Snowball

Start by paying off the smallest debt. If you have a credit card bill of $2,000, put extra money towards it while still making minimum payments on everything else. Let’s say you pay $35 minimum and $100 a month more than the minimum on the credit card. Then, when it's paid off, take that $135 and apply it toward the next bill, along with the minimum $35 you’ve been paying. You won’t miss that $135, because you’ve already been paying it, just on something else. When that second bill is paid, now you have $170 to apply toward the third bill, and so on.

1. Fully funded Emergency Fund of 3-6 months-worth of expenses.

2. Invest 15% of your income for retirement

3. Save for college (if applicable)

4. Pay off your house early

5. Build wealth and give

That last step is the end goal: to have enough to serve and help others. God does not want us to simply survive. He wants us to thrive in this life. Dave told me, “Dave [Ramsey] has a saying I just love: ‘Live like no one else…’ I absolutely love that saying. ‘Live like no one else…’ is just the first part of the sentence however; there is a second part that says, ‘…so later you can live and give like no one else.’” It is not our money, anyway; the Bible tells us that we are only stewards. Being debt free – taking the first step towards debt freedom – allows us to be good stewards of what God has entrusted to us.

It can seem overwhelming. If you feel overwhelmed by your debt, getting out can seem impossible. Dave Kutch has showed us that it’s not. I asked Dave, if a person or family can only do one thing right now, what should it be? “Get a plan,” he said. “Managed money goes further than just having a plan in your head. When I get paid and I break down my paycheck and tell my money where to go, it’s amazing how far I can stretch my money. I have a plan for every dollar of income coming in, it’s just a matter of executing that plan. Every single person who comes up to me and says, ‘Dave, we did it, we are out of debt!’ All of them stuck to a plan.”

Dave loves to hear success stories when he is leading FPU. Leave comments or questions for Dave Kutch, and if you have a financial success story, we’d love to hear it!