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How I Went From Being Broke to Being Cheap


My financial life: Oh boy has it changed

Good morning Yes, I am Cheap friends.  My name is Kristina and I’m the daily blogger over at Dinks Finance.  Today Sandy has graciously invited me over here to share the story of how I went from being broke to being cheap.  I turned my financial life around in three years and this is how I did it.

My out of control spending ended in $50k of debt

From my mid to late twenties I was living the high life, or at least I thought I was.  I had a wallet full of credit cards and I spent money whenever I wanted something.  I would spare no expense and I didn’t care how much anything cost.  Why? Because I was making a six figure income from my personal finance job and I thought I could control my finances.  Thought was the operative word.

Then the market crashed.  One day I woke up and realized my excessive spending landed me over $50,000 in debt.  I hit rock bottom and knew my income could no longer support my spending.  So I had to make changes in my financial life to decrease my spending, lower my expenses and increase my monthly debt payments.  That’s exactly what I did.

This is how my life changed from being broke to being cheap:

I only keep one credit card.  Right now I only keep one credit card in my wallet.  It is a no fee credit card with a $2,500 limit.  I no longer have several credit cards with $5,000 or $10,000 limits. 

Help A Reader: I’ve Got Serious Student Loans


I’ve been stuck, seriously stuck with the worst case of writer’s block.  I could not get one word on a page…that is until I received an e-mail from Terri.  Here goes!

Hi there! Your story is inspiring and I could use some practical, objective advice. I will give you the outline version of my situation.

- Graduated from college with $90k in student loan debt *anxiety strikes just from typing that number*
- That is for both undergrad and grad school
- Employed full-time but only making $19/hr
- No credit card debt (thankfully)
- Car is paid off. Nothing too fancy, a dependable 2005 Jeep
- No outstanding medical debt
- I definitely do not live beyond my means. Cook dinner at home 90% of the time, no fancy vacations or shopping sprees

I’m actually quite sensible with my money but the student loans are overwhelming! With my current salary, I am only making enough to pay bills and meet living expenses. I’ve been looking diligently for a better job but that hasn’t happened yet. I know my earning potential is great, but right now I feel stuck.

Advice, please!!! Thank you in advance.

I loveeeee some reader advice.  It makes the writing juices flow.  Here goes my advice.

Video: Stop Giving Uncle Sam A Free Loan

With Tax Day only a month away if you haven’t already filed your taxes, you’re probably thinking about it. According to the IRS, of the 48 million tax refunds processed through the end of February, the average tax refund was $3034. That’s a pretty healthy amount of money!

Finance experts argue that with such a large return, you are doing yourself a disservice throughout the year by reducing your take home pay and giving Uncle Sam an interest free loan all year long. I’m of the opposite mindset since I’d much rather get a tax return than learn that I owe the government thousands of dollars. Having been there and done that, I’d never like to do it ever again.

With that said, short-changing yourself all year especially when you might actually need the money is not a good idea. Need some convincing? Check out the video below.

Grow Your Own Dough Challenge 2 Months In

woman and money

Way back at the beginning of the year I hopped into a friendly little wager among personal finance people to see who would have the highest value portfolio at the end of the year.  Now that we’re passed two months, it’s time to see how my investments are doing.

First, let’s recap a little.  Unlike most of the challenge participants, I am not relying on stock for the bulk of my wealth building in this challenge.  I split my $1,000 initial investment into peer-to-peer lending (25%), stock investing (25%) and my own little side business (50%). I’m going to go in order of returns.

Share Builder

I managed to transfer $250 into the account aaaaand nothing.  I haven’t touched it at all. I don’t even remember the password.  There is some serious work to be done in this area.  Here’s the problem, I have never been able to invest in stock outside of my 401(k) because I traditionally worked for investment banks.  I hated jumping through hoops to get permission to invest, so I never bothered.  Now that I can do it, I am so not used to the freedom that it’s a bit daunting.  This is a mental hurdle to get over. But, I did earn 7 cents in interest.  Hey, it’s something.


Share Builder Result

How I Doubled My Net Worth In Five Years On A Crappy Salary


With all of the things that I share on this site my net worth has never been one of them.  It’s not like I’m an incredibly private person, but I always felt as if I should hold at least ONE thing close to the chest.  That’s about to go right out the window.

Blogging buddy J. Money asked bloggers if we were willing to share our net worth and I guess I felt challenged enough to (1) calculate that number and then (2) share that with the world (okay, the three of you who read this site).

You already know about my debt.   This blog was established with the sole purpose of documenting my way out and upward and it’s been some ride.

When I started this blog way back my very first post detailed my debt of $105,665.31 and optimism.  I started owing less money than I do now but the circumstances are so much more different (grammatically incorrect, but it stays) than they were then.  Back in 2009 the only thing that I owned was my debt and two degrees…and a lemon of a newish car that I had to have constantly repaired at the dealer.

February Debt Check


January came and went so quickly that I didn’t write my monthly summary. Big whoops, so here it is.

For those of you who are new, the entire reason why this blog exists is to chronicle my way out of debt and into freedom on a beach in Bora Bora.  The second part is a lie, but if I win the lottery, you’ll know where to find me.  This blog has been running for five long years and I’ve been doing this every single month since we started. Okay, there was one month where I was going to change to doing this every other month so I didn’t do the monthly check in.  That was last February.

This Is A Stick-up. Gimme Your Financial Aid

Performance artist Carvens Lissaint robs to get his financial aid…well, he does so verbally anyway.  His TedYouth video below is inspiring in just how desperate students are for financial aid and how important financial aid is for students.

One of the most stirring lines in this entire video is when he said, “My ancestors did sit-in just so I can sit in a classroom.” He then goes on to say that student loan debt “sounds like the rust of shackles locking their way onto my degree.”

Have a minute? Watch Carvens at work.

Bill Payment Practices of Gen Yers

Remember when you used to buy envelopes and stamps and then spent time writing out bills, licking and sealing all those envelopes and then mailing them in just to pay a bill? Yeah me neither.  It seems like you Generation Y people are taking advantage of the technology available to you to pay your bills as well.  According to a survey by Western Union 64% of this age group receive more than half of their bills online.  I’m not in that age group but I get 100% of mine online.  Why deal with paper when you don’t have to?

When was the last time that you wrote a check? 21% of Gen Yers have never written a check in their lives.  Honestly though, I don’t even have a check book for my checking account.  Everything goes through the online bill pay with me.  Ain’t nobody got time fo’ checks!

Even more impressive, Gen Y is smart with their cash, probably because they’ve got massive student loans. 71% of Gen Yers in the survey planned on cutting unnecessary spending within the next six months. Smart!  If you’d like to learn more about how Generation Y handles their money, check out the infographic below. Click to enlarge.

2013 Retrospective and January Debt Check


As usual there are no resolutions for this blog, but we are going to take a look back on 2013 to review how I did with my finances.

I began 2013 owing creditors exactly $144,224.79. It wasn’t bad but it wasn’t too good either.  I really didn’t have a goal number in mind to end the year with and so I plodded along just paying the overall debt down.

March 1 stuck and I was not so suddenly but very happily unemployed.  While this didn’t halt the debt repayment, it did slow down considerably.  That was fine because I had planned for it.  I had a decent severance  package, an emergency fund, passive income from my rental homes and income from this blog.  Combined, it was enough to make me comfortable enough to take six full months off doing what I wanted to do.