Before I get too far…in this case, “debt-free” means that we did Christmas this year without going into any additional debt for our family. We do have debts that we are working towards paying off in Dave Ramsey’s “Baby Step #2 Debt Snowball”. But, we are working towards financial freedom and this was the first year we have done Christmas without credit cards. How did we do it? Well, for this year, we put some money in savings for emergencies (Baby Step 1), then we worked hard to pay off a few debts and then got ahead on the debt we are currently working to pay off next. Being ahead of our payment schedule allowed us to miss a payment and spend that money on Christmas. This may not be totally Ramsey-kosher, but it worked for us. And now that I’ve had more than a week to reflect on Christmas, I wanted to share my thoughts.
Doing Christmas without going into debt…
1. Forced us to put more thought into our gifts. When you are playing with “Monopoly Money” or “spending money like a drunk congressman”, you just buy whatever feels good and worry about how you will pay for it later. But doing Christmas on a budget, we really tried to do the best we could with the money we had, which meant getting the most meaningful gifts within our budget.
2. Allowed us to open our gifts without a sense of guilt wondering “how long is it going to take to pay this off”? I literally remember opening some gifts last year with that thought in the back of my head and it made me feel bad about getting Christmas gifts. Did you hear me? I felt BAD about getting Christmas gifts! Doing Christmas on a budget, eliminated that.
3. Forced my wife and I to communicate more about money. Working together toward a common goal tremendously reduced the tension in our home. Being deceitful about buying Christmas gifts can be devastating if it’s not done with the family’s best interest in mind. But when we communicated about Christmas, there were no surprises except the good kind, i.e. the Christmas gifts we knew were already paid for.
4. Allowed us to focus more on our daughter and on each other than on the gifts. Sure, it would have been nice to have gotten ourselves a 50″ LCD HDTV. But what would we remember about this Christmas-the memories or the TV? Well, we’d probably remember the TV because we’d get a bill every month until it was paid off.
With all this being said, I do not mean to imply at all that we are where we need to be financially. We still have a way to go in eliminating all of our debt and moving on to Baby Step 3 and saving for a home. But we are happy about where we are now. And even though we are not completely out of debt, there is a bit of financial freedom that comes with making your money act right. Proverbs 22:7 says that the borrower is slave to the lender. I’m looking forward to being free. I hope we will continue to do this.
What are your thoughts on debt and finances?