How I am Giving Gifts for FREE!

Ok, I am sure a lot of you are skeptical or thinking this is a DIY blog, but actually, I am going to tell you how I am purchasing all of our gifts this holiday season for $0 out of pocket. 

1 year ago my husband and I signed up for a Discover Card.  Now before you exit out of this blog, this is NOT a "free gifts - just put it on a credit card" blog but is actually a blog about using credit to earn you money WITHOUT CREATING DEBT!  We signed up for the discover card because of the Cash Back Bonus that discover offers.  Discover pays 1% cash back on ALL purchases but also has 5% cash back on different categories each month (ex. Gas, Travel, Groceries, Dept. Stores, etc.).  By making our purchases on the discover card instead of a debit card or checking account we are earning money on things we would be buying any way.  We were even able to earn cash back on things like home repairs and medical bills!

How We Did It

1. Make All Purchases on Discover Card - Ok, so when we got the discover card, we decided to put all purchases that we could on the card.  There are some bills and things that we can't, but for the most part we put all of our purchases on the discover card.
1. Keep Track - We make sure to keep track of ALL of our spending just as we would do with a debit card.  I continue to keep a check book ledger and balance it regularly.  I also go to the Discover website to check our purchases each month to make sure things have cleared and everything is in order.
2. Pay it off EVERY month - This is the trick to not losing money and not incurring debt.  If you don't pay it off you are not making money because you are paying interest.  For this reason, I would encourage you not to do this if you are not good at monitoring your spending.  It is a slippery slope into debt and my husband and I strongly believe in living a debt free lifestyle.  When you pay it off you earn the cash back without paying any interest.
3. Accumulate Your Cash Back Bonus -We decided to save all of the money we earned over the course of the year to use for Christmas.  It was always hard to pay for all of the gifts we wanted to give and had heard Dave Ramsey talk about budgeting for Christmas.  Our budget is pretty tight and we just didn't know how we would be able to do that so instead we saved all of our Bonus for Christmas.  We now are keeping a ledger for our Christmas purchases and will just directly apply our cash back bonus to our account for the amount we spend.  This also means that we are still earning cash back on our Christmas purchases too!  

I want to caution all readers that this will take discipline.  You will still have to have a budget and I still live frugally but this has helped us save in our finances.  Oh, and you better believe that I am still scouting the best deals for Christmas gifts (yes, I am a black-friday-aholic)  but it's so nice to not have to stress about being able to give gifts to those we love (which is a great joy for me).  If you are nervous about this (I sure was when we started!) or have questions about it feel free to let me know.