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Wednesday, August 15, 2018
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. 

I used to think I was lucky when I received a credit card offer in the mail. I thought “Yes, my credit must be good because I was approved again.”  Now that I have cleaned up my finances I don’t accept all credit card offers in the mail. When I do receive a credit card offer in the mail I think “WOW they would be lucky to have me as a client.”  It’s no longer the other way around.

I never pay full price for anything.  I used to spend money and never think twice about it.  Now I contemplate all my purchases to the point of obsession. The other day I was in the book store and I thought about buying 3 books for $10 for 35 minutes. I couldn’t possibly need three books at the same time. However I didn’t want to buy the books later for $5 each when I could get them for much cheaper right now.

Some people think I’m cheap because I always look for the best deal possible but I just think I’m frugal because I don’t like to overspend. I don’t mind if people call me cheap because in my mind being cheap isn’t a bad thing. It has helped me get out of debt and stay debt free.

Controlling my spending and limiting my credit card purchases helped me start a new financial life. Now I can afford to pay cash for the things I want instead of living off credit cards and accumulating debt. If that makes me cheap then so be it. I will be cheap every day, all day if it helps me live a happy financial life.

This article is by Tanya who writes at DINKS Finance. She writes about being in a dual income, no kids relationship and how she, along with her spouse, managed to go from debt to a net worth of over $1 million! She’s graciously filling in for me as I am taking a mental and physical break.

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Personal finance bloggers the world over are always welcomed to share their ideas on this blog. This article was written by one of my blogging friends. I hope that you enjoy the article and consider subscribing to automatically get updates delivered straight to your inbox.

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Anneli @thefrugalweds April 17, 2014 at 1:59 am

Tanya, your younger self sounds like she woulda gone shopping with my younger self! (And they woulda dropped a fortune on shoes!LoL!) Now I get excited about no-spend days and nothing gets me more pumped than looking at our investment accounts. My husband and I are fortunate that we escaped our twenties with minimal debt – now we’re just building towards retirement 🙂 You live and your learn!! We’re not quite at $1million net worth yet (far from it!) but we’ll get there! Thanks for sharing…

    Tahnya Kristina April 26, 2014 at 11:30 pm

    @ Anneli – My how our lives have changed. I look back at the way I used to spend money and honestly I can’t believe we lived like that. We learned about saving and planning the hard way, but it was worth it.

Marie @ My Personal Finance Journey April 22, 2014 at 5:13 pm

I can relate with you Tanya, I was totally broke too before. I love buying things that I didn’t necessarily, eating to some expensive restaurants together with my social friends. And then suddenly I realized, how broke, I was, I didn’t even have a small savings!

The Wallet Doctor April 23, 2014 at 12:39 pm

Looking for a good deal is simply a smart way to live. In today’s world, no one should be taking their money for granted. Its simply too risky. Its better to learn to look for deals and manage money than hope that everything works out. Thanks for the insightful post!

Tahnya Kristina April 26, 2014 at 11:31 pm

@Marie – Food was a killer for me. It’s still my biggest expense after rent, but it’s a lot less now than it was back then.

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