When we were first married my sister gave us some of the most useful advice that we’ve ever received. Way back before I had ever heard of Dave Ramsey, she told us all about how they never put Christmas presents on credit cards. She said they determined how much they needed to spend and then divided it up by 12 months and set that much aside each month in a Christmas account. Then when Christmas rolled around, it was never stressful – just fun! Then she told me that she does that with many other things too – any kind of recurring annual expense. Instead of putting these things on a credit card and paying for them month after month with interest, pay yourself the money in advance. It was so contrary to the way I knew that most of the world did things… I thought she was brilliant.
We’ve used that advice throughout our marriage and it has helped us tremendously. We find new ways to put it into practice regularly. Last year when I conveyed to my husband what our curriculum expenses would be, his response was, “how are we going to come up with that much money?” We decided that instead of letting it take us by surprise again, we would create a curriculum fund. He started saving a little each month. This year I started shopping for curriculum again and went to him with the total and he said, “okay, the money is all there, go for it.” It was wonderful.
I know that when things are tight it seems like there is no way to save. But it doesn’t have to be a lot. Just $10 a month is $120 toward next year’s curriculum. $25 a month will give you $300. $300 that you can just spend without thinking about where it will come from.
There are so many opportunities to use this idea. You can set money aside for clothing, birthdays, vacations, or household projects. When the kids need shoes or the flower beds need some pine straw, the money is already there. Everyone knows Christmas is expensive, but what about Easter, Thanksgiving, and Halloween? It is a good idea to set some money aside for those as well. Have a family with vision trouble? Dread the annual trip to the eye-doctor? Save the money in advance and don’t worry about it anymore. Okay, I realize I sound a bit like an infomercial, but this concept really has been a life-changer for us.
Love it!! Just a little planning, a little dreaming. I love your curriculum example. Brilliant advice indeed.
Hi there. I’m a bit of a lurker…but I’m trying to say hi more and lurk less!
This is a great suggestion! We started doing it with Christmas and now we do it for a birthday fund, our vacation fund and for any big house expenses we’re anticipating (like the new fridge and stove I hope to find in the next few weeks!). It works so well that other big annual and even semi-monthly expenses we have have their own accounts – our property taxes, home insurance and even our electrical bill (it comes every two months). We just put the money aside and it’s there and much more stress free! I’ve found the one that was the best stress reducer was the electrical bill. I figured out what we usually spend in a year and each month we put 1/12 of it in an account. Then we can save a little in the summer months so that in the winter the extra is already waiting in the account.
We’re pretty fortunate to have a (virtually unheard of) plan with our credit union that allows multiple accounts under the same number at no charge.
Anyway. Hi again and I enjoy reading your blog!
That is great that you can have multiple accounts with your credit union. Some of the online banking services like ING also offer multiple accounts free of charge. It makes it so much simpler to keep track of your savings.
Thanks for visiting!
Thanks for this sound advice. Long before Dave Ramsey came along there was Larry Burkett who founded Christian Financial Concepts. Larry passed away several years ago but I am so thankful for all his good advice in several of his books. Dave Ramsey has influenced me as well. I can’t say I’ve always lived by those financial principles but I am working towards a goal of being totally debt-free by the time I’m 50, which is a little more than six years away. Including our house. This will come in the midst of three boys starting college, hopefully the oldest will finish by then! I use debit card pretty much exclusively and we paid cash for our last car. Every month things ease up a little bit. I can’t wait to feel the burden lifted in a few more years!
I think my sister got a lot of her financial insight from Larry Burkett.
It is fantastic that you could be totally debt free in just a few years. What a wonderful way to begin that season of life. Congratulations!
Great Kendra!!! That is the way to do it NOT paying monthly interest on a credit card!!!