Our Financial Peace University Class is $2 Million in Debt

by Kevin on September 18, 2009

I told you facilitating Dave Ramsey’s Financial Peace University was teaching me a lot about debt.

This past Wednesday I learned a lot more as we hit the 4th and likely most critical lesson in the entire series: Dumping Debt.

The previous week one of the tasks the entire class participated in was writing their total non-mortgage debt on an index card and turning it in. No names, no identification on the cards. The pastor in charge of the class promised to total up the amounts and share it with the class the next week.

Well he shared this week and I wish you could have heard the gasps from the 74 people in the class.

Our class of 74 is $1,998,000 in debt. That is $27,000 per person or $54,000 per couple. (Oh, and we are debt free and I know there must be a least one other couple debt free… so the numbers just go up and up.)

Remember this is consumer debt. This isn’t even including the mortgages!

That is a ton of money. But when you look at it on a per person basis I can actually see how it got that high.

I imagined two categories these individuals might have debt from without even mentioning the word credit card:

  1. student loans
  2. car payment

Now imagine half the class has a really nice car (with a lot of debt to go with it) and a few smaller student loans. For example they might have $20,000 in car debt and $7,000 in student loan debt.

And now imagine the other half of the class is just the opposite. They have a smaller car debt, but their student loan debt is much higher. So $7,000 in car debt and $20,000 in student loan debt.

I can easily see how you could get to these numbers. $20,000 in student loans sounds like it could be a small amount for a lot of people.

You Can Walk Into Debt

Dave Ramsey said this during the lesson: You can walk into debt. It’s so easy, and there are people all along the way that will help you in “achieving” this. They will tell you that you needneed a new car, or that new dining room set. Come on, put it on payments… it’s so easy and you could have it today!

Yet the exact opposite is true of getting out of debt.

You Must Run to Get Out of Debt

The gazelle and cheetah example from the video is one of the sadest yet most hilarious ways of convincing people to get out of debt I’ve seen in a while. I really think it is the highlight of the class so far. (If you want to find out what I’m talking about, go find a Financial Peace University class to sign up for.)

The bottom line is as easy as it is to walk into debt with people helping you along the way, it is just the opposite trying to get out. Not only are you now paying interest on things sitting around your home, but those same people that helped you get into debt have grabbed some baseball bats and are hammering away at you. They want you to stay in debt. Instead of giving you a helping hand to get out of the hole that you’re in they try to keep you pushed down.

Eye Opening Experience

Hearing that $2 million number come out was an eye opening experience for me. It makes me sad because I wonder what that group of people could do in their community if they were debt free. Free from the interest, payments, and harrassing phone calls. Imagine the impact they could have on the world.

But we’ve got to get them there first. At the end of the class we are going to do the same exercise to see how much debt the group as a whole has knocked out. We’re hoping it is significant!

{ 7 comments }

Bible Money Matters September 18, 2009 at 9:52 am

When we facilitated a FPU class at our church, our smaller class had an astounding amount of debt as well. While ours wasn’t in your range since the class was so much smaller – our class was still in hundreds of thousands of dollars of debt – pushing one million if I remember correctly. It really is sobering to hear those numbers and to see the shock on people’s faces.

Good news is that during the class people were able to pay of tens of thousands of dollars of the debt because they buckled down and got with a financial plan. It can be done!

James Aguilar September 18, 2009 at 11:21 am

I would be interested to see a calculation of the total/average APR on that debt. If it’s less than two or three percent, it might be quite a good deal.

Matt Jabs September 19, 2009 at 12:44 am

It is amazing how much debt all of us carry in this country.

I keep telling everyone that before they point fingers at the overspending and financial mismanagement of our government… they need to consider their own lives and get them in order first and foremost!

Godspeed on your teaching.

Kevin September 19, 2009 at 12:00 pm

Yea guys I am really looking forward to seeing how much the number drops.

I wish we had two numbers… one with mortgages, one without. I bet with mortgages it is astounding.

Holland September 19, 2009 at 5:22 pm

Our FPU class has 17 participants. It’s going to be interesting to find out our collective debt amount. I’ll keep you posted – we have two more classes to go.

SailboatFamily September 20, 2009 at 4:55 pm

What is always amazing to me is that all those same people, whom are servicing that debt, show that they are capable of so much wealth. $56,000 per couple. Put another way, if you are able to pay off $56,000 in debt, you are just as capable, from a wealth earning perspective, of putting that same $56,000 into your own account. Maybe that $2 Million number will wake some of them up. Thanks for sharing your experience in the class.
-Bill

Jeff September 25, 2009 at 10:55 am

Wow! Awesome wake up call. So, tell me, have you been moved at all to change your approach to using credit cards (even if only for the points)?

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