PROVO, UTAH
"Getting into debt is amazingly easy — getting out is much more difficult," noted Bryan L. Sudweeks, associate professor of finance, as he conducted a class during Campus Education Week at BYU on Thursday, Aug. 18.
He recalled a hike to Mt. Timpanogos in which he and his wife took the wrong path. They came upon loose rocks, water and even a dead animal. Brother Sudweeks said his wife did not feel good about continuing so they said a prayer. They turned around and were able to find their way back to the main trail. As they continued along the correct path, they met a man who advised them that when they reached the snow, they should stay on the path that led to the right. They were able to continue but came to a glacier, 300 yards of ice and snow. They realized they could not cross so they turned around.
Brother Sudweeks related this story because debt is sometimes like the journey along the path but there is help. He counseled:
1. You need to watch the signs in the road
2. When you realize you are off the path, get help
3. Listen to those along the way
4. Use tools necessary to get the job done
He shared five thoughts on personal finance:
1. Financial management (personal finance) is not separate from the gospel of Jesus Christ, it is the gospel
Brother Sudweeks said that financial management could encompass three of the four-fold mission of the Church. He anticipates a time when non-members will come to the Church for help with their finances. This will offer the opportunity to preach the gospel. He also sees financial management as a way to perfect the Saints and take care of the needy.
"We can't take care of others if we are poor," Brother Sudweeks stated.
2. Financial management is just as much a part of the gospel as is family history, food storage, employment, welfare and other areas of membership and activity.
"The things we have and own are our Heavenly Father's," Brother Sudweeks said. "We are stewards. Stewardship is a temporal and eternal principal" (Doctrine and Covenants 104:13; 72:3).
3. It is critical that financial management be part of a Christ-centered life.
4. It is critical to feast upon the words of Christ and live worthy of the Holy Ghost which shall tell and show all things members should do.
"If we are living close to the Spirit, the Spirit will teach us, scriptures will tell us and the Spirit will inspire us," said Brother Sudweeks.
5. The only things that are truly ours are our minds and our will.
Brother Sudweeks quoted Elder Neal Maxwell who said, "The submission of one's will is really the only uniquely personal thing we have to place on God's altar. … When you and I finally submit ourselves, by letting our individual wills be swallowed up in God's will, then we are really giving something to Him!"
There is reasonable debt but it is important to understand why people go into debt and the "debt cycle." That is:
Brother Sudweeks suggested that some reasons for the debt cycle include ignorance, carelessness, compulsiveness, pride and necessity.
"I believe the challenges are here to help us," he said. "To help us and to teach us to become more like Him."
"I'm trying to give you the tools to help yourself and help others get out of debt," Brother Sudweeks told the class. The first thing to do is accept you've got a debt problem. The second thing is to stop incurring new debt. After this, make a list of all your bills. Then look for one-shot ways of reducing debt and, finally, organize a debt repayment or debt elimination plan and follow it.
There are 3 different types of strategies for reducing or paying off debt.
1. Debt elimination: Expensive debt first.
This is the article recommended in Elder Marvin J. Ashton's "One for the Money"
2. Debt elimination: Smallest debt first
Target in on one debt at a time until it is paid off. Then continue paying the same amount on your remaining debts until they are all paid off.
"It really doesn't matter if you pay off the highest interest rate first or the smallest," Brother Sudweeks said. "What matters is that you pay it off.
3. Home equity loans
"People have found that their homes could be ATM's and use that to pay off their credit cards," Brother Sudweeks said. "Experience has show that 80 percent of those that take out home equity loans are back to where they were in debt within three years. The habit hasn't changed, the spending will continue again and now they lose both their credit rating and their house." He said since mortgages have gone down, people can't take money out of their homes. But he believes it is a financial blessing because it forces them to get their money in order.
Brother Sudweeks said there is help to get out of debt. He noted credit counseling agencies and non-profit CCAs but advised be on the watch for warning signs. These include high up-front fees, pressure to sign up and the promise to cut principal.
In February 2001, Elder L. Aldin Porter spoke at a fireside at BYU. Brother Sudweeks quoted Elder Porter: "Utah is the No. 2 state in the nation for per-capita bankruptcy filings." Brother Sudweeks said there are two questions to consider when thinking about bankruptcy: Is it honest or is it a way to get out of debt legally and is it really necessary?
He noted there are things that can be done to help others:
1. Teach them the importance of perspective and the key principles of understanding wealth.
2. Help them determine what was important to them — their goals — so they can know what they are working toward
3. Help them realize where they are financially. Get them on a budget.
4. Help them understand why they went into debt in the first place so it doesn't happen again.
5. Help them find ways of reducing debt.
6. Help them determine a course of action, a debt reduction plan, and commit them to that course of action.
"Our purpose here is not just to make money," said Brother Sudweeks. "Our purpose is to become more like our Savior."
