If you are thinking this is going to be another Dave Ramsey pitch on why you should stick to the baby steps – it’s not. You can check back to this post on our thoughts on credit cards and the “why” behind us ditching them. This post is more about what actually happened in our day to day life when we cut up all our cards. How it changed our purchasing habits. How it changed our mindset on budgeting. And most importantly – how it changed my mind on contentment.
If you read the last credit card post you know we went on a few trips last summer and our credit card bill got racked up a bit. It’s not fun to go out with friends and have to think about what you can afford to order or how much you have spent on the trip so far. We had been wading into the baby steps but last fall we said enough is enough and stopped using our cards altogether. We actually cut up the one hidden in the desk drawer during our FPU class. (R.I.P Southwest Rapid Rewards Card!)
Disclosure: I will admit that I have a Nordstrom credit card and used it for the Anniversary sale but I paid it off immediately. (You aren’t allowed to shop the sale without one.) If you think this disqualifies us, you can stop reading now and stamp this post with #hypocrite! Hopefully, I’ll get a little credit for my honesty! 😛
The first big change we noticed was our purchasing habits. You throw a lot fewer items in the cart at Target when you only have your budgeted spending money in the bank. We walk into stores without grabbing a cart more often than not and only buy what is on the list. Sometimes we even skip items because we know we can get through the week without it. We also cut way back on the random Amazon purchases, eating out, and buying clothes. What we do end up buying is rarely an unplanned purchase. If I have to buy an outfit I really think about what is in my closet already. There have been quite a few times where I sold clothes in order to have extra money to buy something new. We are also way more conscientious about our grocery bill and only buy enough food to get us through the week. We have a great income and sometimes it’s hard to wrap our head around not being able to afford something. It’s not that we can’t afford it – it’s that our goals for our financial future are usually more important!
Secondly, when you are on Dave’s plan you hopefully are or are working toward being “gazelle intense.” This means you don’t have a lot of extra money in your checking account because you are throwing everything at your debt snowball. This is a JR and Kylie #truthbomb right here. (I’m being super honest so be kind!) We budget down to the dollar every week and start our new budgets on Friday’s. More than likely we only have $20-30 in our checking account from Tues-Friday. So if you ask me to grab a coffee on a Thursday – plan on buying! 😛
How did you handle that truth bomb? Ready for another one? Our card get’s declined sometimes. Yeah, EMBARASSING. JR switched the preferences on our checking account to decline it and not overdraft. We did the cash+envelopes for a while but have reverted back to just using our debit card. We always make sure we have money for groceries and gas but sometimes (9/10 on an impromptu dinner eating out) we forget how much is in the bank or that we made a purchase earlier in the week. One time it was declined for $23 at dollar taco night. LAME! We have a great online banking app so when we slip up we just transfer some from our emergency fund and restock it on Friday/payday.
Is this a super responsible way to budget? Heck no! Are we Dave Ramsey shining stars? Nope! Have we paid off $75k in the past two years? YEP! It’s not always pretty guys! Think of it in a medical sense. When you use credit cards you are numbing yourself and refusing to acknowledge your current financial situation. When you have to pay with your own money in your own bank account there is no hiding – there is no numbing. I’d rather get a prick of a thorn in the side to tell me I’m slipping up every once in a while than to hurl myself blindly through life to wake up entangled deep in the thorny bush.
The last and most substantial change I have seen in ourselves is our level of contentment. If you compared my purchasing habits a few years ago until now you would think you for sure had the wrong girl. We still buy things that are non-necessities and sometimes go on vacation but overall we very rarely make an impulse purchase or splurge. Having a joint goal to work together toward makes us so much more accountable toward each other. Also focusing on people and relationships rather than things or how our life may or may not look to others makes you realize the rationalization behind why you purchase things isn’t always healthy.
As the saying goes “use it up, wear it out, make it do, or do without.”
Our current debt snowball:
Starting Amount: $134,711.10
Currently Left: $60,013.64
Total Paid Off: $75,605.46
Don’t miss a post!