Setting Your First Finish Line with Cody Hobelmann

This faith in finance podcast is underwritten in part by Guidestone. Guidestone envisions a world transformed by Christian investing.

Through screening, corporate engagement, and impact investing, our investment strategies allow investors to be more proactive with their investment dollars to make a meaningful difference in the world while preparing for their financial future. Learn more at guidestonefunds.com slash faith. Beware lest you say in your heart, my power and the might of my hand have gotten me this wealth. You shall remember the Lord your God for it is he who gives you the power to get wealth. Deuteronomy 8, 17 and 18.

I am Rob West. This passage powerfully reminds us that God owns everything and we're merely stewards of what he has entrusted to us for a season. Today Cody Hobelman joins us to discuss how you can establish your first financial finish line and then it's onto your calls at 800-525-7000.

That's 800-525-7000. This is faith and finance, biblical wisdom for your financial journey. Well, we are absolutely delighted to welcome Cody Hobelman to the program for the first time. Cody is a certified financial planner and a certified kingdom advisor. He has an article in our new publication, Faithful Steward that I can't wait for you to read.

He's also the founder alongside his brother Keelan of an incredible movement that you can find at finishlinepledge.com and we'll talk about that a little later in the broadcast. But first, Cody, great to have you here. Thanks Rob.

I'm glad to be here. All right, Cody, your article is titled setting your first finish line, which I don't think many people do, but they should because prosperity is challenging to say the least. And we certainly experienced that living in the most prosperous nation in the history of the world. But I love where you start this article because you point out this really isn't unique to us, is it?

You know, Rob, it's really not. And in this passage that you kicked us off with from Deuteronomy, the Israelites have been wandering for 40 years in the desert. They're standing across the Jordan River from the promised land, their destination that they've been working towards this whole time. And Moses takes time to address the entire nation of Israel. And he knew something about the promised land and he wanted them to be prepared that as they enter in, they would be facing a challenge that was more difficult than hunger, disease, or even attacks from rival nations. And that is prosperity. You see, Moses knew they would be tempted to rely on their own strength and take credit for the abundance that God was about to give to this nation. And he wanted to remind them that this is actually God's provision.

It belongs to him. And we would only ever be stewards of that gift. However, today we face that same test. And I faced it in my own life, I would say at times, not very well. I'm learning. But in recent years, there's a tool that I was introduced to that has dramatically changed the way that I see finances.

And that is a financial finish line. Well, I appreciate your transparency on that and the great work you've done to encourage God's people to really lean into this idea. I want to dive into the nuts and bolts of the various approaches to giving first though, because you provide a really helpful, what you call allocation framework in the article. Share these ideas around giving.

Yeah, I'd love to. So allocation simply refers to how do we answer the questions? How much should I give or how much should I keep? And we've seen five major ways that people answer these questions. It's spontaneous giving, a giving goal, percentage giving, incremental percentage giving and a financial finish line. Spontaneous giving is exactly what it sounds like. It's giving without a whole lot of planning beforehand. A giving goal is picking a number. I want to give X dollars this year, for example. Percentage giving, this is a pretty common one. You pick a percentage of whatever you earn and that's what you give. Incremental percentage giving builds some growth into that. So you're increasing the percentage of your income that you give over time.

And we've probably heard of many of these frameworks. However, a financial finish line flips everything on its head. This is where we define a maximum for our spending, which forces you to recognize that this is all God's.

We are stewards. We only need so much of his provision for our own needs. And everything above that number can be used to build his kingdom.

That is powerful. And I'm sure our listeners found themselves in one of those giving models that you unpack there. They're giving spontaneously or they set their annual goal or they say, you know what, 10% is that number. Or maybe they get a little more advanced to say, right, it's 10% this year, but next year it's going to be 11 and then 12 after that. But this idea of a financial finish line, recognizing it's all God's and then saying, how much are we going to keep actually flips the whole paradigm upside down. So when we come back here, Cody, I can't wait to walk through the mechanics of what this actually looks like. Folks, you might be able to set your very first financial finish line.

Cody Hobelman is going to help you do just that. He's here today. He's a CFP and a certified kingdom advisor, and we got a lot more to come just around the corner. You're not going to want to go anywhere.

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Have you ever thought about creating a financial finish line? What is it? Well, we're going to help you understand that today. Cody Hobelman is here. Cody is a part of a movement called the Finish Line Pledge. You can check it out at finishlinepledge.com alongside his brother Keelan.

He's also a certified kingdom advisor and a certified financial planner. Cody has an article in the new Faithful Steward publication titled Setting Your First Finish Line. If you'd like to ensure that this incredible publication arrives at your door each quarter, you can head to our website, faithfi.com, click give. You'll help us reach more people with this message and ensure that you get this every quarter. But today we're talking about finish lines and Cody, before the break, you shared with us various allocation frameworks. You called them like spontaneous giving or percentage giving, even an incremental percentage giving approach that allows you to increase that over time. But as we said, the financial finish line is really the only approach that says it all belongs to God and I'm just going to decide how much I keep.

So let's walk through the mechanics of what this actually looks like to set a finish line. You know, Rob, it really starts by building and maintaining a solid plan for your finances. And the way I see it, you can break down your personal finances into four categories. That's personal spending, taxes, planning for the future, and kingdom building. Personal spending is anything that you spend to maintain your current lifestyle. That's things like transportation, housing, clothing, food. These are things that we're used to budgeting for. Planning for the future involves savings for things that you're not spending on today.

So this could be a car purchase you see coming up in the future. It could be your saving up for a home or some kind of real estate, or even retirement, for example, sure. Taxes, we all know about taxes.

I don't think I need to explain that one. And then kingdom building is really anything that is focused on others. So that's usually in the form of giving to a ministry or to an individual, or some other kind of impact work that's not focused on yourself.

Okay, yeah, that's helpful to put it into those buckets. And we're going to dial into personal spending or what we might call lifestyle spending. And we often say, Cody on this program, that lifestyle is the primary determinant of financial success.

And so this really is the area we need to zero in on, right? Exactly. And that's why, in my own story, and in our recommendations, we always say you should start with your lifestyle finish line because of the level of importance that has for anyone on this journey. So that looks like setting a maximum that you're willing to spend on your own lifestyle. And it's easy to think about that as a monthly amount. So what this really accomplishes is it protects you against lifestyle creep, or just the rising cost of your lifestyle, when that's not what you intended. It keeps you aligned with God's purposes for your finances. And there are several ways that people arrive at how to set their spending finish line. But I want to give you three of the most common ways that people have done this from my own experience.

Okay. The first is a maintenance spending finish line is probably the simplest because it simply is locking in your current spending. So if you believe that your current spending on your lifestyle is appropriate, and you don't intend for it to grow beyond what you intended, what you can do is say, I'm drawing a line, that is your maintenance spending finish line, I'm not going to increase from here. Yeah, and that's a big idea in and of itself, Cody, because as we know, our level of spending always rises to our level of income unless we protest to the contrary. So drawing that line would ensure that additional increases in income would not just be gobbled up in more lifestyle spending, right? That's right.

Excellent. The second method, this is actually how Keelan and I set our own finish lines. And it's a somewhat popular method is to look at what is reasonable. And that's using census data. There's all kinds of ways to arrive at this. But we call it a benchmark spending finish line, because you're not making this decision purely from your own opinion, you're looking out and trying to get objective data to help inform your decision of where to set a benchmark. And what we've done is actually created a website that you mentioned finish line pledge.com.

On our website, you can find a calculator that we use when setting our own finish lines. And many people have found that to be a helpful tool as well. Yeah, and I would really encourage you to check that out finish line pledge.com slash calculator, they've really taken the guesswork out of this. All right, you mentioned there was a third approach. There is and this is what we call your prioritization spending finish line. And really, the long and short of it is, once you have an idea of what you're currently spending, you can look at where that money is flowing. And you can start to build out categories and decide which one of these are really aligned with my values and what God says is important, and what is actually distracting me from that. And as you start to whittle away at the things that are not helping you align your heart with God's will for your life, you can zero in on a more targeted budget. So it's working your way down, cutting the fat and focusing your finish line on the things that are highest priority in your life. Yeah, that's really helpful. Well, of course, to get started, folks can go to finish line pledge.com slash calculator, but I'd love for you just to talk about where they go from here beyond the website, because by virtue of the title of this article, your first finish line, it means this is a living process that is going to happen over time.

So where do they start? That's absolutely right. And it can feel like a really big decision. And honestly, for me, it felt like a sacrifice when I first heard of this concept. So what we recommend is try it out for three or six months, we've talked to several people who have done just that. And you know, Rob, I'm not sure I've seen anyone actually turn back after a trial run. That's because there's a significant transformation that happens on a spiritual level. Once you actually put structures into align your finances, and submit it to God and say, What do you want for my life?

And what have you given me to pursue that. So that's why we use the language set your first spending finish line because nobody expects to master something the first time they try it. So this is something that's meant to be dialed in and adjusted throughout time.

And there are very legitimate reasons to do so. But it is so much better to start somewhere and adjust over time than to never start at all. Yeah, that's well said is this only for ultra high net worth clients, Cody? You know, Rob, when I set my first finish line, I was actually 26 years old, my wife was in school working part time, we were so far from what we thought was enough. And what happened in my my own story, is it actually radically broadened my view of what God had for my life, because I saw, I'm actually way closer to having enough than I ever thought, if you never defined enough, you'll never reach it. So by actually having a number where I could say I don't need more than this, it allowed me to really explore what God had for my life. So I believe there's there's a real spiritual significance to defining enough even if you don't feel like you have enough today.

That's well said, we've got just about 20 seconds left. Is this a conversation you should have with your advisor as well, Cody? I think it is because advisors, especially CKAs will have training in how to do this, they may even have a finish line themselves.

And they're used to helping you implement something like this, not only for your income, but for your net worth as well. Wow, that's so good. We're gonna have to have you back. But I really appreciate these insights, folks, check out finish line pledge calm, take the pledge, jump into the calculator, you will be glad you did. Cody, thanks for stopping by. Thanks, Rob. That's Cody Hoberman certified financial planner and certified kingdom advisor.

Check out his article in the latest edition of Faithful Steward. All right, your calls are next the number 800-525-7000. I'm Rob West and this is faith and finance.

We'll be right back. Are you looking for a financial professional who aligns with your biblical values? Certified kingdom advisors are trusted financial, legal or accounting professionals who have completed a rigorous certification program to ensure they provide biblically wise financial advice as part of their practice. You can find a local CKA professional in your area by going to faithbuy.com and clicking find a CKA.

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Give now at crossinternational.org slash faith or 866-843-9500 and help kids go from barely surviving to thriving. Great to have you with us today on faith and finance. So what's on your mind financially today?

Did you have something you were debating with your brother-in-law over the weekend or maybe just something you haven't been able to wrestle to the ground in your own life or mind? Maybe you've been talking about a financial decision with your spouse and you just can't get on the same page. Well, we'd love to help you with whatever you're considering in your financial life today. You can call right now 800-525-7000. Our team is standing by 800-525-7000. We're going to begin today in Mississippi. David, I'm so glad you called today.

How can I help you, sir? I had a question about credit cards and paying those off and it seems that when I pay my credit cards off, my credit score goes way down for some reason and I don't know if that's going to change as I show a zero balance in the future or what? Yes. Well, you point out a great point here that you do see a decline in a credit scores when you close a card. It's primarily because of a few reasons and it all goes back to the algorithm that generates your score and we know at a high level what the categories are that ultimately drives that score. And the biggest one is what's called credit utilization. So credit utilization is 35% of your score and that term speaks to the percentage of your available credit. Okay, so if your limit is 1000 and you've got a balance of 300, you know, you've got a 30% credit utilization. Okay, now when you close a credit card, you lose that available credit making any balances you're carrying on other cards a higher percentage of the overall limit or overall credit that's available to you.

Okay, so I think, you know, that's the first issue is just looking at what kind of balances am I carrying and is that now going to push that percentage up and if it pushes it up over 30%, then that's where it's really going to start to bring your score down. So let me just stop there and ask, are you carrying any balances month to month or are you paying everything off, you know, before the due date? So until just recently, I've had a almost maxed out credit, you know, credit cards.

Yeah. And so here recently, I've just been and I've been paying a month a month, just every month I pay the minimum and so this isn't going anywhere. So I just ended up just saving up and just paying them off.

And I still have the credit cards open, but they have a zero balance. And then when I look on the credit karma, you know, it just said, well, your point went down, you know, 39 points because your balance on this credit card went down. I got it. Yeah. And so I'm wondering if, you know, that's just kind of an initial hit.

And then eventually, you know, that will correct itself. Yeah. So yeah, it's a good question. So maybe I misunderstood.

So you're talking about the credit score declining, because you paid it down, not necessarily because you closed it. Is that right? Right. Right. I haven't closed it.

They're still they're still there. Okay. Yeah. So that's it. That's a different issue.

So first of all, you did a great thing. There's no reason to ever pay any interest when you don't have to. So I would say absolutely pay them in full, I would probably go ahead and leave them open for the reasons that I mentioned. The second reason I was going to get to was that it changes your credit history. And so by closing an account, it can be removed from your credit history, which means you have less history, which in the eyes of the credit score is not a good thing.

So that's why you'd want to keep them open. So it's probably just because it changed the credit mix. You know, in that, you know, the amount of, you know, if you stop using your credit cards, or you pay it off, score could dip because credit activity is is lower. So that would be one issue, it could just be, you know, a very temporary thing that has to do with the reporting, the timing of it. But you know, the idea that you've lowered your credit utilization, and you've kept that account open is generally a good thing. And so I wouldn't worry about it, that 17 point hit is going to come right back up.

And you absolutely did the right thing. So I would say if you check it again, in another 30 days, I think you're going to be right back where it was. Now, if you stop using those cards, and therefore you have less now recurring activity, then that could unfortunately penalize you. And so the way around that is, what I would say is use the cards for maybe there's a budgeted recurring charge that you have, you know, a subscription to something or something that you're planning to spend money on, go ahead and put that as an auto charge on that credit card, and then just pay it off, you know, every month. And that small charge is just going to keep that account active and show you as an on time payer month to month. And that will be a good thing because it'll be good current activity on time payments and low credit utilization, which will all reward you over the long haul.

Okay, that sounds good. Okay, so that was a good financial move, that drop is temporary. If you just continue to maintain, you know, good active credit habits, you're going to be rewarded for that. And that will maximize your score. And listen, at the end of the day, that score moving around even 50 points up or down doesn't really matter unless you're out there, you know, getting ready to buy a house or a car and you're trying to get up above a certain threshold to qualify for the very best terms and rates. Apart from that, it really doesn't matter. Doesn't really matter. Yeah, I guess that my thinking was just in case an emergency happened and I needed to have some out, you know, maybe, you know, and I had a good credit score to back it up.

So yeah, no, that that's very wise. Hey, last thing I'll add is if you haven't done this recently, I'd go to annual credit report and just pull your three credit files. That's the government website.

It's free. There's no hit to your credit when you do it. But I would just look and make sure there's not any erroneous or inaccurate information that's driving these scores down.

Probably not, but worth a check. Annual credit report.com. Pull all three bureaus reports, TransUnion, Equifax, and Experian. Thanks for your call, David. Well folks, we're nearing the end of the program today. You know, as we think about applying God's wisdom to our financial decisions and choices, we want to look back to God's word and here's what we will find. You know, apart from the big idea that we're stewards and God is owner and he gives us the power to create wealth, I think we need to remind ourselves that there are plenty of admonitions in scripture around how we should handle money. The fact that we should avoid debt, the importance of goal setting, the importance of paying our taxes, the fact that we should be training the next generation, our kids in these principles and a biblical worldview of money management and certainly living within our means.

And we want to remind you of those principles and ideas that are very practical, but rooted in God's word each time we gather together. And by the way, and speaking of living within our means, if you're struggling with that, like I am, and so many of us are in the midst of high inflation, check out the Faithfi app. It's what Julie and I use to manage our budget every day.

And it's really helpful to know what's left in each envelope. When you take a look at that app in real time, you can download it today at faithfi.com. Just click app. Well folks, that's going to do it for us. A big thanks to my team today, Devin Patrick, Robert Youngblood, Jim Henry, and everybody here at Faithfi that makes this possible. You have a great day and hope you'll come back and join us tomorrow. We'll see you then. Bye bye. Announcer 1-800-Finance is provided by Faithfi and listeners like you.