How Santa "Paid" for Christmas

This was our second Christmas not using credit cards and it felt great!  Usually, every year, we would purchase items on the card and end up paying part of it with the money we received for the holidays.  So, these past couple of years have been nice to actually buy ourselves something with that gift of money. 

As I watched more and more items being added to our son's "Wishlist", I started thinking of a way I could pay for all of that new stuff he wanted.  Sell!  He had toys he no longer played with, so why not try to sell some of them.  I asked him about each toy I wanted to get rid of and he agreed.  The trick was to let him know that he needed to make room for all of his new toys he would be getting from Santa.  I posted some of the items on Facebook for my local friends and some on Craigslist.  Not only did I sell everything I wanted to (and paid for everything he wanted from Santa!), but I was also helping people get some great deals on their gifts, too!  It was a win-win situation. 

As for the rest of the holiday gifts, we had budgeted for that throughout the year.  And, I hit some great sales!!  

Giving Feels Great!

It's true! Giving does feel great. We recommend trying it out for yourself when you have the ability to do so. This year, on top of our annual donations through work, we decided to give a little more of not only our money, but time. And, it was even more fun to involve our son. He is learning the importance of helping others.

One of our projects was for our local food bank. We purchased items to make three complete Turkey Dinners for families in need. This was a project to teach our son of how lucky he is to have what he does and to never take it for granted. And, to show him how it feels to help others in need. He really got into the whole process.

In the end, our food bank ended up getting more dinners that what was needed locally and was able to share with families in other counties.  And, A is now volunteering his time for the food bank.  He does weekend pick ups at local restaurants. 

All of the food for the dinners. 

Another giving project we did this year was all about our boy.  In a previous post where we discuss our son and Financial Peace, Jr., we mention that he has to put at least a quarter in his Give envelope each week.  Halfway through the year, he had seen a commercial for the ASPCA and asked why the animals were so sad.  After a discussion about why some animals do not have homes, he told us he wanted to save his Give money for the "puppies and kitties with no homes".  We agreed to match whatever amount he had saved by the end of the year.  The time came and he had $14.00 in his envelope, so we gave him the other half and headed to Costco for some shopping.  I contacted our local Humane Society and told him about what he had to donate and how hard he had worked to save up for the treats.  They were so impressed by his generosity that they offered a behind the scenes look of the shelter, so he could see some of the animals he would be helping.

 All of the treats he was able to purchase. 

 Putting his donations under the shelter's tree. 

One last way that I like to give is randomly paying it forward to a stranger.  I cannot tell you how good it feels to purchase the coffee of the person behind you in the drive thru!                                                            

Baby Step Summary

1) $1000 baby emergency fund - completed 3/09
2) Pay off debts smallest to largest (excluding mortgage) - completed 7/09
3) 3-6 months expenses (fully funded emergency fund) - completed 3/10
4) Save 15% of income for retirement - Ongoing since 3/10
5) Save for kids college - Ongoing since 3/10 (currently $2000/year)
6) Pay off house early - in progress
7) Build wealth and give like nobody else - can't wait!!!

Paying It Forward....

Once we were Debt Free (and loving it!), A and I decided that we should "Pay It Forward" to our friends and family.  The best way we figured we could do this was to get everybody to read "The Total Money Makeover" and came up with the idea to purchase books to pass on to people.  We waited until they went on sale and purchased five copies of the book and started handing them out to anybody who asked or anybody who listened to our experience and wanted to be debt free, too.

Our rules:  Take the book and keep it as long as you needed to but you needed to be working on getting debt free and building wealth.  Once  you were debt free (or bought your own copy), you could pass it on to somebody else or return it to us.  However, if you were not actively doing The Total Money Makeover, you needed to return the book to us, so we could pass it on to somebody who would use it.

As of today, all five copies of the books our on loan!  I hope they are all getting closer to that debt free success!

ELP's??

The first time my husband said, "We need to contact an insurance ELP", my reaction was...."What the heck are you talking about?".   ELP stands for Endorsed Local Provider and they are WONDERFUL!!!  These are professionals that Dave Ramsey recommends for certain types of business (Insurance, Investing, Real Estate, Taxes, etc.) and these people must have "the heart of a teacher" as Dave puts it.

Our first visit with an ELP was with our new insurance agent.  It was a different experience working with him because you could tell he really cared about his clients and was not just out to make a buck.  Plus, he ended up saving us over $500 a year on our insurance and we got more coverage!  Our second visit was with an Investment Agent and he was also wonderful to work with.  The plus is that these professionals are going through (or have gone through) the Financial Peace University and know exactly what you are talking about and looking for.

I would recommend checking out a local ELP to see what they can do for you.  You can find the information on Dave's site.  It is on the homepage on the right hand side.

My Fancy Envelope System....

Here it is, my fancy envelope system. Actually, it is the Financial Peace University Deluxe Wallet Envelope System. They no longer carry this specific wallet, but you can see what else they offer in Envelope Systems. I was lucky and caught this on sale for $10.00, so keep an eye out for that!

The wallet has a built in envelope system.  As you can see from the picture, mine has a bit of cash and a TON of coupons in it.  And, no....those are not credit cards!  There is not a spot for credit cards, but there are spots for debit cards, grocery cards and insurance cards.

I love this wallet and it is much easier to handle than a ton of envelopes or a coupon holder.

But What About Your Credit Score?

This is a question that a few people have asked me.  "How is closing all of your credit cards and paying off all of your debt affecting your credit score?....Doesn't it hurt it?".

Well, so far it really hasn't done much to our credit score as we still have a mortgage.  We had a great (I Love Debt) score when we started this program and I am sure that as time goes by and we have no credit sitting out there, it will go down.  How sad that our credit score is based on how much credit and debt we have out there and not on how much we DON'T have?  Your FICO score is based on having debt and making regular payments to the bank, not how wealthy you are, or your ability to repay a loan.

However, we are not worried.  Why?  Because we will NEVER take out another loan besides a mortgage and we will have no problem with that.  That is your goal with doing this program:  pay off your debt and never have any again!!  How sweet is that?

What about a new car?  New furniture?  We are planning to drive our cars for as long as we can and until that time, we have a "Car Replacement" fund in our budget and a "Furniture Replacement" fund.  We just keep building it up and someday when we need a new car (or should I say slightly used car) or some new furniture we will hand over cash.  And, we hear that paying with cash can sometimes get you a nice deal!

So, if you are truly wanting to become and stay debt free...don't worry about that dumb I Love Debt (FICO) score!

Click here for a video about driving free cars for life