No Credit Cards - Year One Complete!

Last April, I finally skimmed through Dave Ramsey's "Total Money Makeover" (which I had bought the prior December) and took over the task of bill paying with the goal of getting us to live within our means more responsibly. After we got married, I left bills to Andrew and kind of lived in a world of ignorance regarding how much was coming in and how much was going out, so my spending was pretty much all over the place. When I sat down to look at it finally, it wasn't a fun reality. We were doing OK, but we could do SO much better, especially when it came to preparing for our family's future.

Dave's philosophy is pretty simple - don't spend more than what you make, don't use credit to "pay" for purchases and instead use cash you actually have in hand, get rid of your debts and save for your future. Our toughest obstacle is debts, especially as two college graduates who both accumulated plenty of school debt. And then, of course, there was Alivia's 3-week hospital stay and numerous follow-up doctor visits (thank God for insurance!!), which occured right after we bought a new house...and then I decreased my working hours by 10-15 hours per week (however, we also quit daycare and used grandparents for childcare, so that probably evened things out).

As of last May, we stopped using credit cards. I successfully never had to reach for a card; Andrew, however, cheated a few times for a few gifts and also uses one card for all of his travel expenses (which we reimburse as soon as the money comes in and then use his "points" to stay at hotels for free).

I learned a lot of lessons over the past year, beyond just realizing how to better balance the intake and outgo of our earnings. I learned about cutting costs - we set a fairly low grocery budget that I tried my best to stick to by using coupons and shopping sales; adjusted our life insurance coverage; changed cable/Internet companies; and opted to trade in one of our gas-guzzling SUVs for a more ecofriendly sedan. I also learned about necessities and wants - does Tyler REALLY need new Tshirts just because the season is changing? No, not if he has plenty that still fit. Do we need to buy each other large gifts for holidays? Nope, definitely not a need.

Now, a year later, our budget looks a lot more like it should for two theoretically responsible adults. We're certainly not debt-free, but we have a foundation in place to get there sooner than later. I really like this way of living - I feel in total control of our finances, even when there's not much there to control! ;)