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.