Kurtis Kube is the Director of Columbia’s new Diploma in Social Entrepreneurship and he also leads Columbia’s fundraising efforts as Director of Development. Kurtis is a great money coach, so we asked him for solid money tips that will help new grads get a good start.
Each of us has a relationship with money. Is it a good one? Do we think about it from a Biblically-integrated worldview? Have we heard Jesus’ counsel on the role of money and the position it ought to take in our life?
I am often asked for counsel regarding personal financial matters. Given my training and background, I really enjoy the conversation (perhaps too much), as long as the individual or couple I’m coaching is willing to work. If the willingness and effort isn’t present, the conversation never moves to action.
Being willing to take ownership and to make the effort towards financial freedom sits with you.
What should my financial priorities be during this next season of my life?
There are a plethora of great priorities, but it all depends on your situation and goals. I don’t want to leave it at the typical ‘advisor’ response and not give some tangible ideas. The universal points of application remain creating and living by a budget and praying about and writing down your goals. Then simply work backwards and get after it. Consistency and diligence win the day.
I suggest taking stock of where you are at financially, spiritually, and in your career. Ask yourself what your values are and what you need to live. Make a list and determine where you are on that list. A couple of great aspirations are (I am borrowing heavily from Dave Ramsey and “The Total Money Makeover”):
1 month emergency fund
3-6 months of savings
5% down payment on a house
Start at the step you’re at. Once completed, move to the next step. If you find yourself in a position where you need to return to the previous step, don’t panic. Work at it. Complete it. Move forward.
One thing that we emphasize in the Social Entrepreneurship Diploma is to always seek opportunities to “add value” to society by offering solutions to problems, or by filling gaps in service. Perhaps this means starting a small business, or a new division within an existing business or ministry. This can be done at any step. In fact, the sooner you can do it and really serve people by making their life better, the faster you’ll likely move to the next step. Working hard at your job and being a blessing to others breeds success; the Golden Rule would be sufficient customer service training if we just lived by Jesus’ words!
This is NOT a plug to give to Columbia. In fact, our Alumni Association has decided not to solicit grads for a minimum of seven years, and even then, our goal is to pray and discern with you on how God is leading you. We want you to thrive, and we understand you’re likely in a tight spot. We’ve been there ourselves.
Having said this, practicing generosity with your time, commitment, involvement, and finances (to your church and ministries you value) is very important in developing contentment and faith. I have walked alongside people who have an ABUNDANCE of resources, and observed that many are miserable. Having money and stuff does not lead to contentment. Practicing generosity fosters trust in God, and puts our focus in the right place. Pray and listen to God’s leading in this area. Make generosity a priority.
I graduated with student loans and I’m feeling a little overwhelmed. What’s the first thing I should do?
It’s going to be okay. You’re not alone….many of us have been through the same experience.
The most important part of the journey is to start. Too many people see objectives and give up before even starting. You can do this!
As with any goal in life, the best place to start is by writing it down, and setting a realistic timeline.
This is your map to freedom (it may not feel like it at first). Create a budget using free online tools from Crown.org or download an app that will help. Without a budget, it’s very difficult to plan ahead.
There are no magic formulas. Once you have your goal and budget, work backwards and determine how much you would need to pay per month or week to reach your goal.
I love coffee as much as the next person (perhaps even more), but in these circumstances we must ask ourselves the question, “Do I really need this?” Each one of us makes choices regarding how we spend our money. Take ownership of your decisions and determine what is most critical to you. For my wife and me, being debt-free was a priority, so we found fun and inexpensive activities that we could do together, and we paid our debt off as fast as possible.
All the effort in focusing on expenses and budgets will not produce results if we aren’t willing to work hard. Be the employee who goes the extra mile (I’m pretty sure Jesus is on board with this), who takes additional responsibility and who adds value. Employers will recognize the effort. If possible, work more than one job (I had to do this as a student, and I still maintain this attitude). It really pays off in the end financially, and you build your resume in the process by serving people well.
Some people say that student loan is ‘good debt,’ and I can pay it off slowly. Some people say, “Pay it off as quickly as you can.” Who’s right?
I am of the conviction that there is no such thing as “good debt,” but there is “permissible debt.” When one thinks of debt, the only permissible option is one that produces a greater return on investment (ROI) than it costs to carry (and even within this simple statement there are plenty of caveats). Permissible debt also leads to future returns. Student loans do nothing in the present to produce additional income, therefore, they are a sunk-cost and should be paid off in accordance with your budget and stated goals.
Snowball Your Debt.
If you are currently carrying credit card debt, the interest on those loans will be significantly higher. Be sure to make your minimum payments on your student loans, then focus on paying off your credit-cards first. Once those are out of the way, roll the payments you were making on your credit cards to your student loan and focus on your loans with the highest interest rate. This strategy is what Dave Ramsey calls the “debt snowball.” His book Total Money Makeover is a great tool.
If I have to choose between accumulating savings and paying back my loan – which should I pick?
Being debt-free brings a level of freedom that savings can’t buy. As an example: If you want to serve the Lord in mission overseas, being debt free gives you the opportunity to move without hindrance. Having said that, it is good fiscal management to maintain a small balance in a savings account (1 or 2 months of living expenses), in case of an emergency. Life happens, and if we don’t have some savings to deal with the hiccups, we’ll be tempted to revert to credit cards or other more expensive loans (pay-day loans as an example).
A good rule of thumb is to build your savings account to 1 or 2 months, and then move all additional funds to pay down debt. If you need to borrow from your savings, replenish the fund and get back to the loans.
Forget savings – I’m struggling even to make ends meet right now. What should I do?
Don’t give up.
Work hard. Keep moving your feet. All wonderful clichés, but the message is true. An Income Statement (Revenue – Expenses = Net Profit or Loss) is the same for a business, charity, or individual. Start with your budget and get after it.
Seek help and advice.
If you feel stuck, reach out to someone who you know has made it a little further on the journey.
Many of us are in the same position or have been, but we put on a good front. Talk with trusted friends about your goals and ask them to encourage you. Invite them to practice being creative about cheap activities. Many of your peers are likely in the same position as you.
How can I pay back my loan and still feel like I have a life? (Do you have any advice for how I can learn to live within my means and enjoy it?)
Contentment is something we learn and practice. The Apostle Paul offered great advice to Timothy and us about how we ought to walk; Christ-centered, recognizing our value in Him…not in what we have and do. A really practical approach, which may seem a bit draconian or old school, stop watching TV or whatever medium feeds you advertising/marketing. Targeted ads work for a reason! And while I actually believe in good marketing which creates value for the consumer, most of the marketing we face is simply about feeding our insatiable desire for wants.
I have found that I cannot simply practice contentment without replacing my love for something with something else. We often want to focus on eliminating things, but we fail to recognize that we must replace it with something greater and lovelier. This is as true with money as it is with other aspects of life. If you have a dream and vision that is grander than your current circumstances, write it down and keep it somewhere you’re reminded on a regular basis. Let that grander vision guide you. Simply saying “no” isn’t enough. You’ve got to have something to say “yes” to.
Kurtis Kube holds an MBA from Azusa Pacific University and a BA in Biblical Studies from Columbia Bible College. He’s the Director of Columbia’s new Diploma in Social Entrepreneurship and he also leads Columbia’s fundraising efforts as Director of Development. Ask Kurtis a question.