Life in contemporary America is a roller coaster ride on the great consumer economy. The value of money has surpassed everything else, and our desire for materialistic things always increases with each passing generation. The mad rush for money and all the things it can buy has reduced us to mere rats, running in a weird rat race. I don’t want to speak for others, but I think most of us have faced some kind of money crisis. As I explored the world of debt cycles, I met a lot of people and realized my story is just a drop in this vast ocean of debt in which we all live.

Right now I have attained economic stability and peace of mind enabling me to sit down and write about my journey. But not so long ago, I did hit that bottom that many of us only get in nightmares. I not only was out of cash, but I was deep in debt.

I was so broke the bank started charging me money for being poor. A lady from the bank called me up one day and said I didn’t have the minimum balance to make my account sustainable,  so the bank was going to charge me money for that. I was speechless. That was the saddest moment in my life, and the irony never was so well played.

I deeply regretted how I had wasted away the fortune I had inherited from my mom. I won’t mention the amount, but I can tell you that every restaurant, every bar and every nightclub in town knew my name. The shopping malls loved me. And my friend circle grew bigger. Spending money became an addiction. It was the sweetest poison I ever had tasted.

I became depressed and was admitted to the hospital. That’s when I realized I had to act fast and take action that would save me from wasting away. After being discharged, I decided to stop wallowing in pity and instead began my financial journey afresh.

I decided to venture into freelance writing. With my laptop, I signed up with an online writing website and started pitching for writing tasks. After six months of working hard to create an impressive profile and portfolio, jobs began trickling in. This time around, I decided to save a percentage of all the money I earned.

With my savings, I managed to create a website in 2006. The internet was booming back then, and I was having the time of my life, earning way too much. It was a good website, and I put in a lot of effort and money. The money went into hiring web developers, buying a domain, hiring a hosting service and then bloggers, etc. I put in all the money I had saved during the last two years. The fruit of my labor bloomed, and I enjoyed a lot of web traffic after six months of being online.

With that traffic came lots and lots of dollars. My website was about bodybuilding. I thought, ‘Why not exploit the traffic?’ I decided to create an online portal for supplements. I thought of buying in bulk and then selling at the lowest price in the market. I made baby steps and exercised a lot of frugality. Instead of thinking of the next day’s profits, I thought of the long term. Everything went well, and I was able to pay all my debts, which saw my credit score improve tremendously.

Although my online business greatly helped, I achieved my goals faster as a result of being frugal. It has become my lifestyle. I also continue to save ten percent of any money I earn.

Another habit that accelerated my growth was cutting back on unnecessary purchases. I have learned to shop as a necessity and not for fun. I also sell items I no longer need. I had to avoid expensive vacations. I’m a creative person, and so I’m equally creative with my vacationing. Visiting local parks and having picnics has proved to be refreshing. Eating at home instead of expensive restaurants not only has cut down on my expenses but has given me a golden opportunity to bond with my family. I also have a small garden where I sometimes get fresh vegetables.

Looking at the big picture now, I think we always should have an idea of what to spend and what to save. I realized the best thing you can buy with money is money itself. So invest in some secure place and never shy away from being frugal. People who suddenly make money overnight and then go off on a spending binge never can accumulate wealth, no matter how much they earn. Take it from me. I have been there, done that.

Have you gone from being an overspender to leading a more frugal lifestyle?  How have you changed your money habits?

Linda Hoffstader is a former mortgage banker, real estate investment advisor and loan underwriter for financial institutions such as Prudential, Merrill Lynch and Franklin First Financial. Now semi-retired and living in Boca Raton, Florida, she spends her days sitting poolside educating people via her blog about the current state of economy and financial affairs.

P.S. Ready to get out of debt ASAP? Check out the Spending Fast Bootcamp!