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How I Went From Spending Addict to Super Saver

Living paycheck to paycheck was one thing. But learning I’d charged $100,000 on my credit cards was a wake-up call. Three years later, I’d dug myself out of debt. Use what I learned to change your habits, get your money right — and keep it that way.

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Back in 2001, at age 33, I decided to face the financial music and tally all my credit card bills. I knew I owed a lot after years of living paycheck to paycheck, but I was shocked to discover that I’d racked up $100,000 worth of bills.


Talk about a financial wake-up call. I was so stressed about money. I wish I could say that I had a game plan. I didn’t. I just knew that I had to tackle all that debt somehow.


To start, I turned it into a challenge. Could I go a week without buying anything frivolous? What about 30 days? Becoming conscious about what I did with my dollars on the daily made me re-think my choices. Dinner comes from the fridge, not a menu. Do I really need another little black dress? A pricey vacation? Out of the question.


Then I opted for a little plastic surgery — meaning I started paying for things in cash. That kept my debt from growing larger. To shrink it as quickly as possible, I didn’t rely solely on the portion of my paycheck saved with my monthly spending challenge. I also earmarked any additional financial windfall — an income tax refund, a holiday gift or a year-end bonus — toward paying down those balances.


By 2004, I was debt free.


I no longer worried about money, anxiously awaited payday or fretted about my credit rating. I even wrote a book, Zero Debt: The Ultimate Guide to Financial Freedom, about all the strategies I used to conquer my debt, and it became a New York Times bestseller.


But I can honestly say now that getting out of debt was nothing compared to staying out of debt.


It’s like losing weight. Most people can lose weight: Eat healthier, exercise more and — voila! The harder part is keeping the pounds off. That requires a lifestyle change. So does staying out of debt. What’s toughest, I found, is controlling spending while shifting your perspective.


After 15 years working as a money coach, I now realize that developing a zero-debt mind-set happens over time and involves four phases:


Phase 1: Admit you’ve got a money problem.

The turnaround can't happen if you’ve got your head in the sand about the issue. Change can happen once you’ve had that “aha” moment — or even that “Oh my God, what have I done?” reckoning like I did.


Phase 2: Commit to change.

Driven by emotions from determination to disgust at past mistakes, we tend to accept no-spending challenges, decide to stop using credit cards and live more frugally.


Phase 3: Work past frugal fatigue.

Dieters get tired of restricting calories or never eating sweets. People who slash their spending may also feel deprived and lose motivation. Phase 3 is pivotal: We either backslide, give up or evolve our thinking. Being conscious means we align spending patterns to our personal goals and priorities.


Phase 4: Remain financially enlightened.

Recognize that you’re not on a financial fast, which can lead to yo-yo dieting, but rather setting financial priorities, letting go of unimportant things and not caring what others think.


I’m now more intentional about what I spend money on (such as when I hire a housecleaner on occasion to save me time) and what I don't (I don't have a nice new car). My kids’ education, a secure retirement and travel are more important to me. That’s why I drove my last car for 16 years then replaced it with a used model. Meanwhile, I'm maxing out my annual 401(k) contributions. I prioritized saving for a recent 50th birthday celebration in Europe.


Lacking a consciousness about the “why” behind my purchases, I allowed temptations to trip me up during my 20s and 30s. Smart spending, I’ve since learned, depends on knowing when to say enough is enough and to be perfectly content with what we already have.


Lynnette Khalfani-Cox, aka the “Money Coach,” is the author of financial planning books, such as Zero Debt: The Ultimate Guide to Financial Freedom.