Several months back I started to listen to Dave Ramsey’s radio show, and decided to practice what he preaches. If you don’t know who Dave Ramsey is, he is a personal money management expert who discusses personal finance topics on his popular syndicated radio show. He helps others get out of debt, instructs folks not to use credit for anything and if you can’t pay cash for it, you shouldn’t buy it. What qualifies him to teach these principles? He rose to the top financially at a young age, and then crashed and burned and was forced to file bankruptcy. He rose from the ashes to build an empire based on what he learned in his journey, and passes this information on to all who want to follow his philosophy and live a prosperous life.
In the past, we’ve paid for Christmas gifts, decorations, wrapping paper, a Christmas tree, and everything Christmas on credit card–like most Americans. Then, in January and February, get the big fat credit card bills in the mail and wipe out the checking account paying them off in full to avoid any fees and charges. Often we “robbed” another account to accomplish this.
We may not have debt like many of the folks that call into Mr. Ramsey’s radio show, but I think we could benefit from paying attention to where and how each dollar gets spent, including not being so reckless with our money around the Holidays. How are we going to do that this year? By making it an all cash Christmas–Dave Ramsey style.
At the beginning of this past summer, we started eliminating the use of our credit cards and developing a budget at the beginning of each month so we could know where all our money was being spent during the month. This is the toughest part! This worked for June and then fell apart in July and August when we took several vacations to the beach. We stuck to our budget in September but it fell apart again in October (November’s budget is set up and we are committed to sticking to it). However, just knowing that a budget was set up, made us at least more aware of how we spent our money. For me, that meant less meaningless trips to Target. For my husband, it was less lunches out in the city. We may not have been counting every dollar, but we were more conscious where it was going every time it left our wallets.
A couple of months back, we decided how much money to set aside per month for gift purchases. I set up a separate savings account with our bank just for “gifts” which includes birthday and special occasion gift money in addition to Christmas gift money. I have a set dollar amount automatically transfer from our main account to this separate account on a daily basis. For me, it’s easier if a small amount of money comes out on a daily basis, instead of a lump sum once a month. In addition, gift buying may occur at different times during the month and to know I always have money in that account keeps us from robbing the main account, and also doesn’t allow us to overspend in our gift buying which we have done in the past.
In addition to the gift savings account being set up, I’ve taken it upon myself to see what other ways we can come up with extra cash for Christmas. Maybe I’m just plain weird, but I get a kick with coming up with new ways to make a few bucks without becoming an employee. I don’t use any money that I make online for the purchase of gifts. That money goes into a SEP IRA, or back into my business (Which includes an almost daily Starbucks Mocha drink–needed for sustained energy and alertness on business tasks. Try it and you will see!) so I can’t rely on any of that money for gift buying at Christmas. I just need to get creative.
One of my stops yesterday was to Plato’s Closet. Plato’s closet is a consignment shop with franchises in the Northeast where you can take your gently used name brand clothing and exchange them for cash or credit to shop in the store. I took three pairs of jeans and an older pair of gently used Uggs (the knit ones) to sell.They were crowded, so I dropped off my things, ran some errands and returned within the hour to see how much they were willing to offer me. They offered me $48 so I accepted it. Maybe I could have made more selling those items on eBay, but I don’t know for sure. Plus, there was very little hassle involved and I had the cash in my pocket the same day.
How much Plato’s Closet will offer you for your items will depend on whether your items are in demand, the style, the condition they are in, and the store’s current stock level. If you don’t have one of these consignment shops in your area, you may have another consignment shop local to you that does pay cash on the spot. Do a little research and call around if something like this is of interest to you. I definitely will go back with more things to sell!
I’m also going to check around the house for some things I can sell on Craigslist. I personally have had great success with Craigslist when selling items, but you do have to be careful of scams–especially at this time of year. If you do find a buyer, see if you can make the exchange at either yours or their place of employment, or at a public location (not in a parking lot). I have done a couple of transactions at my house but these were for children’s items that I sold to local moms, and the items weren’t worth hundreds of dollars. Sometimes it’s just a gut feeling on where you think is the most appropriate place to make a transaction.
I do have a few things I can list on eBay, but I much prefer Craigslist because I don’t have to give up a percentage to eBay’s PayPal when I accept money. I may try to list these items first on Craigslist, but if they don’t sell, then I’ll try eBay.
In addition, I’ll try some Amazon arbitrage. OK, here’s where I go against Dave Ramsey’s philosophy about using credit cards, but maybe not. I’m not sure where he stands on credit cards for business. I do have an Amazon credit card that I use for purchases I make on Amazon.com, other websites and local stores that I can buy and resell. When I use this card, I get points which transfer into dollars–dollars I will use for, you guessed it…Christmas gifts! As long as the balance gets paid off each month, I make money with my arbitrage scenario, AND I earn dollars back that I can use towards Christmas gifts, what’s the harm?
Dave would say the harm is in the risk. The risk being how do you know what you are buying is going to sell for a higher price or sell at all? This takes a little bit of experience but if you can make your worst case scenario that you break even, then you still walk away with your Amazon points. This sometimes can be a little too much work for the pay off, but if you turn a profit on the majority of the items you sell, then this could be a fun and lucrative way to earn your cash for Christmas. However, I highly suggest that if you want to try this method and be successful at it, you keep a spreadsheet of some sort to keep track of your purchases, sales, and Amazon credit card points. I also suggest getting experience using the arbitrage method with buying less expensive items at first. There is a learning curve involved.
November and early December is the perfect time if you’re crafty to sign up for selling your wares at craft fairs. If you can sew, paint, bake, build, or anything else that has an end result people will pay money for, you can earn some extra cash for Christmas. Don’t think you can make enough inventory in time for an upcoming fair? Contact a friend or two who are also crafty and sign up together and share a table. Between two or three people, you will have enough stuff to sell. I’ve done craft fairs in the past and sold hand painted items. I was able to make $100 or more on a weekend afternoon.
If you aren’t crafty but know someone who is who might not want to personally set up at a craft fair, suggest that you can sell their handmade goods for them for a percentage of the sales. What if you approach several people about this– you automatically become a mobile consignment shop earning commissions from several different crafters. That’s cash in your pocket and extra money for Christmas!