Bobservations: Financial Priorities During COVID-19

If you have read any of my posts over the past few years, you know that my wife Diane and I are passionate about helping people get out of debt, stay out of debt, and providing the tools to create a financial future that is filled with generosity and peace. On January 26, 2020 we launched our Winter session of Financial Peace University.

By far the largest class we have ever hosted at Sunridge, there were over 100 people that committed themselves to this 9-week program. As a class, they had over $2.8 million dollars in non-mortgage debt and over 265 credit cards. From my perspective, they were so engaged and so excited to start working through the 7 Baby Steps toward financial peace. The class was ready to learn about retirement planning and that is when the COVID-19 pandemic disrupted everything. Not just FPU was disrupted, but the way we all were accustomed to doing everything.

As I crafted an email to the class trying to explain that we would not be able to finish the 9-weeks together, it hit me really hard. I kept telling myself that this is why it is so important to have your finances in order, why getting out of debt and staying out of debt matters, and why having an emergency fund is so critical. Prior to this crisis, it may have been hard to imagine that something of this magnitude could happen and totally alter our way of life so drastically.

My reminder to the class is the same financial advice I want to share with all of you during these unprecedented times:

• Create a plan for your money every time you get paid – Stop wondering where your money went and tell it where to go! If you don’t know how to do a budget, click here to get a crash course. If you are still stuck, email me; I would love to try to help. It is the foundation of being a good manager of God’s money.
• Get out of debt and stay there – With a budget in place, the focus is to get out of debt as soon as possible. I recommend using “Baby Step 2” from Dave Ramsey’s Financial Peace University. List all of the non-mortgage debt you have. Using your budget, pay the minimum on all debt and put every bit of extra money on the debt with the smallest balance. Once that is paid off, put that amount plus the minimum on the next smallest balance, and keep that snowball rolling until all your non-mortgage debts are paid off.
• Build an emergency fund – The COVID-19 pandemic is unique in that we are not just fighting a deadly virus; we are fighting for our health and our economic well-being at the same time! This pandemic has revealed how many are living paycheck-to-paycheck, without any reserves for such a time as this. Let’s learn from this experience. Build an emergency fund that will cover 3 to 6 months’ worth of expenses. This happens after you are debt free.
• Take care of the basics – If this pandemic caught you unprepared financially, you are not alone; many are in the same difficult spot. Here’s some solid advice, again from Dave Ramsey, on what to do if you need to prioritize how you are going to spend what little money you may have left after losing your job:
  • Food
  • Utilities
  • Shelter
  • Transportation

In addition, the Federal Government passed a $2 trillion relief package to help get us through this crisis. Our Congressman Ken Calvert’s website has an excellent list of resources for those who are sick, seniors, workers, families, military, and small business owners.

In times like these we often look to science for a cure or to our finances for security, but those who follow Jesus know that hope is found by grace alone, through faith alone, in Christ alone. If these uncertain times have you wondering who God is, I suggest you take a step to find out. It’s never been easier; our services are now live streaming on Facebook at 10:30 AM on Sunday mornings.

“Be joyful in hope, patient in affliction, and faithful in prayer” ~Romans 12:12