FINANCIAL FREEDOM, ONE STEP AT A TIME

1. Begin saving for emergencies. Dave Ramsey recommends saving $1,000 as quickly as possible by selling unwanted items or working extra jobs.

2. Create a thorough budget with top priorities of transportation, food, utilities and housing. Ramsey says to plan in advance how you will spend every penny you earn.

3. Use a cash envelope system to buy food, gas, clothing and personal items.

4. Create a snowball plan to pay off debts by listing them smallest to largest in amount due. As you pay off the smallest, add that payment to the next debt payment, creating a snowball effect that will pay down debts faster.

5. Check your credit report annually for incorrect information and for credit or loan accounts you did not open.

6. Make sure your family has adequate health and life insurance.

7. Save three to six months' salary. Save for major purchases and repairs.

8. Save for retirement, kids' college and other major life events.

Credit cards: To cut or not to cut?

Ramsey says that if you save as he suggests, plan for purchases and vacations, and learn how to make great deals, you should never need a credit card, especially with the availability of debit cards. A credit score can be built by paying your utilities, bills and rent or mortgage on time, he says.

"Have the emergency fund and let go of the credit card," Sandi Enzminger said. "As you build the emergency fund, there's more security."

However, Boise financial educator Robin Hollingsworth said credit cards are an important part of a credit score, which measures financial health and character. They also provide security for folks who may face an emergency beyond their ability to save. The key, she says, is to use debt wisely, be proactive about your finances and pay bills on time.

Wisdom from the Enzmingers

"Change your attitude about having to have things now."

"Things are sweeter when you've saved to buy them, especially a vacation."

"Eliminate excess; be content with what you have; be patient with purchases (i.e., save up to pay cash); and plan for the future and emergencies (because they will come). In addition, evaluate your resources, skills and abilities, and barter for goods and services whenever possible."

"This is a good way to live."

BUDGET STRATEGIES FOR A HAPPY HOLIDAY

A happy holiday season depends on family financial planning and communication, according to social worker Gary Direnfeld, of Ontario, Canada.

"Many kids have parents convinced that life will just be a bust without the latest video game or hottest cell phone," Direnfeld said. "With the recession looming large, though, parents are struggling to shelter the children from their financial and employment woes, yet bestow upon them a memorable Christmas. As parents withhold their concerns, their children continue to up the ante. ... The risk is either a disappointing Christmas or overwhelming New Year's bills."

Direnfeld said the challenge is for parents to resist the tide of expectations and follow these financial planning strategies:

Be honest with teenage children about your financial and employment concerns, without instilling fear. Let them know your plans to survive the economic meltdown including cutting back on the Christmas gift-giving budget. This may actually put them at ease despite their upset at the impact of the current economic situation.

Inform your children of your budget and ask them for their gift preferences in line with the budget. When expectations are clear on both sides, there is less room for disappointment.

Involve your children in cost-cutting decisions and plans for Christmas celebrations. It just may be that if included, they come up with some good ideas. Being part of the planning process, they will then likely enjoy what you mutually determine.

Pool resources. You may not be able to afford that one special gift yourself. However, if you join with a few relatives, it may be affordable. The answer may not be how many gifts are given and received, but how many people contribute to that one special present.

Children typically respond and adjust better to change when they are part of the process, Direnfeld said.

"The recession is real and discussing it with them can help them to cope better and you to feel better," he said. "Children may be initially disappointed and that would be normal and reasonable. However, they too must learn to live within their means and make the best of life and circumstances. A memorable Christmas may just be one where everyone came together with a workable plan to enjoy the day."

Sandi Enzminger's personal story

Sandi Enzminger shared her family's experience and her advice with the Idaho Statesman in this e-mail:

"When we were turned on to Dave's teachings, we were expecting our first child, and I wanted to be a stay-at-home mom, but we still had three more years of $500/month truck payments to go. On top of that, I was laid off from Micron PC (June 1, 2001) and didn't have a job to return to. We had no idea how we would make ends meet on less than $40,000/year, and I was very frightened and angry.

"So, we got fired up and started selling things, taking on extra jobs (i.e. delivering pizza and babysitting), and utilizing our resources (acreage) by offering horse boarding. Thus, we were able to pay off $13,000 in 18 months and I have been able to be a stay-at-home mom ever since our first (of three) child was born (September 2001). We have cut up all of our credit cards, closed all of our charge accounts, and stopped borrowing money (even from family); and we have paid cash (on time) for everything including maternity expenses. In addition, having an emergency fund has helped us deal with the stress and expense of having our home surrounded by water for 14 days (May 2006); and, allowed us to calmly and decisively deal with the injury and death of a newly acquired horse without the constant gut wrenching of payments for a dead horse.

"My advice to others who find themselves frightened and angry about their financial situation is to eliminate excess, be content with what you have, be patient with purchases (i.e. save up to pay cash), and plan for the future and emergencies (because they will come). In addition, evaluate your resources, skills, and abilities and barter for goods and services whenever possible. For instance, I would baby-sit my hairdresser's kids in exchange for her services, and my husband (Adam) has traded horse training for a new horse or dental work. Also, since we live on acreage, we offer horse boarding and raise beef, which we trade for all kinds of goods and services (i.e. Avon cosmetics, hair care, photographer, birth dula, chiropractor, computer work). In addition, we know people who salmon fish, raise hens/eggs, grow produce, smoke turkeys (and other game) and we trade beef with them as well.

"As for our vehicles, we purchased a brand-new 1998 Dodge Cummins Quad Cab (which we still have) and paid about $35,000 after financing (and it is now worth about $9,500). Then, in April 2007, we paid $6,000 cash for a 2001 Chrysler Town and Country with leather seats and DVD player. Although we had the pleasure of being the only owner for our pickup, our minivan is newer and nicer and cost us a lot less."

She also shared Dave Ramsey's Amazing Free Car Story: Say we buy an $18,000 car with $300 payments over seven years at 10 percent interest. The car's value after seven years is $800. Or instead, we could buy a $6,000 car over seven years at 10 percent; payments of $100; value after seven years, $400. And save the other $200 per month at 10 percent for seven years, which would equal $24,190.

At year seven, the car is junk in either plan, but in the second plan savings equal $24,190, and purchasing a one-year-old car for $16,000 cash leaves $8,190 in savings and no car payments.

In another seven years, if we save $300 per month from year seven to year 14 and add it to the $8,190 plus 10 percent interest, we'll have $52,245 in savings. So we can buy a one-year-old car for $25,000 cash, and have $27,245 left in savings with no car payments. We will have free cars the rest of our lives just because we purchased a lower-priced car one time 14 years ago.

"This is a wonderful program, which eliminates stress, brings hope and peace, and strengthens and enriches marriage," she said.

Adam and Sandi Enzminger facilitated Financial Peace University at Ten Mile Christian Church, formally Cherry Lane Christian Church, in the spring and fall of 2006; and plan to do it again once the church gets into a new building on Ten Mile and Franklin roads in spring 2009.

In the meantime, they are assisting with the course at Capital City Christian Church in Downtown Boise.