Our Total Money Makeover

Patrick REALLY didn't want me to post this picture anywhere where people would see it, but here it is.  What is it, you ask?  This is a pile I made yesterday when I shredded every single credit card we had in our house.  Patrick thinks it makes us look pathetic, and I guess maybe it should...but in my own defense, here are the need-to-knows about this pile of used-to-be credit cards:  99.9% of them were kept in a file box in the closet where they still had that little sticker on them with the phone number you have to call to activate them...and they were never activated.  Most of them were expired anyway.  When we got them years ago I tucked them away "in case of emergency" and they stayed there...so I AM proud of that.  Unfortunately, there were a couple that we have been using...but no more...because they are in that pile too.
For the last several years, we have bought every single thing we buy with a credit card--including groceries, gas, etc.  The bill comes, and I pay it in full to avoid interest...yada, yada, yada.  We have racked up a really nice amount of rewards points doing this, and we redeemed them all for Home Depot gift cards and spent all of that on the basement.  It was a good idea in theory, but there are many problems with this scenario.  First of all, when you're using a credit card it's really easy to spend more than you planned.  It doesn't feel like real money, and it doesn't hurt (until the bill arrives).  I tried all sorts of ways to budget and make sure we didn't spend more than our allotted amount each month so that when the bill came I would have the money to pay it in full.  The problem arose when the bill arrived, and month after month I was surprised at the total.  Something had to change.
So, a little over a month ago a friend told me that they had started Dave Ramsey's Total Money Makeover.  I have listened to Dave Ramsey on the radio for years and I've always liked his advice and his program, but I never really thought I needed the program for myself until my friend told me about how it was working for them.  So we decided to read the book and see what it was all about.  It was very eye opening.  Now we're on the program ourselves and it's AWESOME...so far.
Here are some of the eye opening things I learned from reading the book:

• Credit card users spend 12-18 percent MORE when using credit instead of cash.  It hurts to spend cash, so you spend less.
• You DO NOT need a credit card to rent a car, check into a hotel or shop online.  Debit cards work the same way.
• According to the American Bankruptcy Institute study, 69% of people filing bankruptcy say credit card debt caused their bankruptcy.

But the Money Makeover is not just about credit cards or debt... it's also about getting control and planning for the future.  I want to pay off my house and be prepared for retirement.  Here are some things I learned that are somewhat disturbing concerning retirement:

• 56% of Americans do NOT prepare for retirement, yet 80% believe their standard or living will go UP at retirement.
• 40% say the best way for them to have $500,000 at retirement age is to win the Lotto.
• 97% of people age 65 can't write a check for $600 because they don't have the money in checking or savings.

So...this is what led me to shred the cards yesterday.  No more crutches...no more "just in case of emergency" credit cards.  We're all cash, all the time now.  After one month, it turns out we spent almost half as much as we normally do on things like groceries, entertainment, and even gas.  Simply amazing!