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Skint to Mint: How We Messed Up Our Finances and Came Out on Top

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[The following is a guest post from Maria Nedeva, owner of The Money Principle. I met her at Fincon a couple of years ago and we just hit it off. She's the proverbial smartest person in the room, so I knew she was going to deliver an awesome guest post. When I read it, I thought, "This is exactly how we've been able to save hundreds of thousands of dollars over the last decade."]

I have a story to tell.

But first I want to say ‘respect’ to Lazy Man. I’ve long admired the honesty, passion and moral stance of Lazy Man and Money: love the blog and like chatting to the man behind it. Oh, and I have wanted to guest post on it for about a year: I just never got the guts to ask. This is why I jumped at the opportunity when Lazy Man asked me to guest post. Of course I wasn’t going to miss talking to you.

And as I said, I have a story to tell.

In January 2010 we were approximately $160,000 (£100,000) worth in consumer debt. At the end of January 2015 we have approximately $160,000 (£100,000) worth of liquid savings and investments.

We went from financial ‘suck’ to ‘rock’ in five years.

People ask me how we did it and expect a story of epic struggle and sacrifice.

What they get is the story of a university professor who researched, learned, analysed and worked out hacks.

What they also get is the story of a woman who had had enough of debt and acted on every single hack she worked out.

That’s me!

Maria Nedeva, Owner and Mistress Supreme of The Money Principle.

Now you have to make a choice.

You can either go on The Money Principle and try to find your way around the nearly 800 blog posts I’ve written and published on paying off debt, money management, saving and investing, making money and retirement;


... You can stick around and learn about the three things that helped us turn our finances around.

It’s your call but I’d stay put if I were you.

What paying off debt fast is really about?

People will tell you that paying off your debt, and more generally building wealth, is about living below your means.

Hard to argue with something as obvious.

Still, important as it is, living below your means is not enough. Here are four hacks you’d do well to remember:

Hack 1: To pay off your debt - and to pay it off in record time – you should watch your cash flow as a hawk. Oh, and your single point of focus should be how to increase your cash flow, not your debt.

Hack 2: Don’t strip spending down to bare necessities. Allow yourself some of the things you love and learn how to do them differently and much cheaper.

Hack 3: Learn how to make more money. Don’t wait for your big break. Just start doing something. Check out some ideas about how to make money enough to fill your fridge or to pay your monthly bills on The Money Principle. Trust me; babysitting is not even on the list.

Hack 4: Put every penny of your increased cash flow on your debt. Open a beer and watch it crumble.

That’s it. You have to do a lot of other things as well but these four hacks are what matters; the rest follows.

We paid off $160,000 (£100,000) worth of consumer debt in three years. You can do it too!

What does it mean to be a ‘frugal artist’?

Quite a few of my blogger friends are on the frugality side.

So is much of personal finance in the United Kingdom – frugality is respected and admired while making money and investing is seen by some as an expression of greed.

I never bought into the frugality mind set.

Don’t misunderstand me. I like to make my money go further just as much as the next woman; or man, for that matter. It is just that I like to stretch my dollar without losing quality of life.

And I like to make more dollars so that my money stretches even further.

I know, I’m weird like that.

I came up with the idea of ‘frugal artistry’ and have even written a manifesto for frugal artists.

In a nutshell, ordinary frugality and frugal artistry are different in the following:

Frugality as an art form Ordinary frugality
Thinking Complex thinking accounting for a number of factors. Absolute thinking considering very limited factors.
Concerns Broad concerns including quality of life and relationships. Narrow financial concerns.
Time horizon Long term prospects. Short term gains.

Put another way, making our bread saves us close to $50 per month. If it were only for the saving, though, I won’t do it. I do most of our baking because, apart from saving money, it helps me relax and is much healthier than buying bread with a ton of additives. This is what being a frugal artist is about.

Buying a cheap suit can be part of ordinary frugality. It saves you money in the short run but is very wasteful long term. One, cheap suits need to be replaced sooner and you may find that ultimately you spend more. And two, wearing cheap suits can jeopardise a promotion at work.

Becoming a frugal artist is worth it. This way, you can make your money go further without loss of quality of life.

What is the ERR strategy for money management?

The ERR strategy for money management is about three things:

  • Eliminate (waste);
  • Replace (what you do and/or how you do it); and
  • Reduce (consumption).

Using this strategy assumes you already have a budget. If you don’t have one, you should.

I came up with this strategy for money management to bring together three very important sides of keeping your budget as lean as a Hollywood starlet without depriving yourself. It was featured on LifeHacker’s blog Two Cents as a way to practice frugality.

I suppose it is.

Eliminating waste is about two things: not wasting food and not paying for things you no longer use or you can get cheaper without loss of quality. We, for example, cut over $3,000 of monthly spending by buying only what we cook, finding competitively priced insurance and planning our entertainment carefully.

Replacing activities and routines is about becoming a frugal artist. Can you impress your friends by cooking a three course French dinner rather than going to a restaurant? Do you have friends who have a summer house and can you borrow it for couple of weeks? Can you barter for some of the services you need (for example, do the neighbours garden if they babysit your kids twice a week)?

Reducing consumption is easy to understand. We all over-consume. We drive to the gym. We have rooms full of clothes we wear couple of times and discard. We over-eat, over-drink and over-indulge. Do you really need 30 pairs of shoes?

Go try the ERR strategy. You’ll shave off 20%or more of your monthly budget, I guarantee.


Now you know my secrets.

Turning your finances around is not hard if:

  • You watch your cash flow and increase it continuously.
  • Teach yourself to be a frugal artist.
  • Apply the ERR strategy for money management twice per year.

You know what is the best part of all this?

Once you make the three things I was telling you about into habits while you are paying off debt these are easy to keep when you finish with the debt. And the wealth just keeps growing.

This is our story.

Care to share yours?

Posted on February 3, 2015.

This post deals with:

... and focuses on:

debt, Money Story

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7 Responses to “Skint to Mint: How We Messed Up Our Finances and Came Out on Top”

  1. […] If you’d care to read my guest post on Lazy Man and Money, you can find it here. […]

  2. Congratulations to your financial success. Thank you for reminding me the benefits of having a financial goal. Your achievement is very motivational. Thank you for sharing.

  3. robyn says:

    “We, for example, cut over $3,000 of monthly spending by buying only what we cook, finding competitively priced insurance and planning our entertainment carefully.”

    i don’t even net $3,000 a month. i already live quite frugally, watch all the pennies and dollars, know how to cook, can, shop, have a minimal carbon footprint. i splurge on what’s important to me [museum memberships, bicycles, pens] and have zero debt. when i read something like this, it annoys the hell out of me.

    and no, i do not get financial help from anyone and i do support a household.

    because how much closer to the bone can a person get?

  4. robyn says:

    btw, an awful lot of ‘cheap’ ideas are money wasters [do you know how much it costs to cook a gourmet meal? not as much as dining out at a top of the line place but more than most people can afford in dollars or time] or freeloading scrounging. i know a family that is ‘working their debt’ when they go to a family potluck, they bring a bowl of plain rice, but boy do they scarf down the BBQ.

    • Lazy Man says:

      I remember having the same feeling as Robyn nearly a decade ago… you can only cut back so much. I had cut back a good amount and all the “save money on [X]” started to annoy me because I already did them. The suggestions offered me no savings and such articles became a waste of my time (except in very rare instances). Since then, I’ve lowered my expectations from such articles.

      What I loved about this article, is that you can see the personal journey. You can see that even a well-educated University professor had some money problems. That should be uplifting to people as it becomes clear that intelligent people have money problems too. Perhaps more important is how she took charge and learned that she can save money without sacrificing her lifestyle.

      I found it greatly inspiring.

  5. Robyn, I feel what you are saying. The ERR strategy is only part of the story – and it does help to assess what you spend and on what you are spending it. I’m the first to say that people have to have some fun and being cheap is not the way to tackle your money troubles. The other part is earning quite a bit more.

    My numbers are probably very different from yours; but the rules are the same. I learned how to get a lot of fun out of life for very little or no money by learning to do things differently.

  6. […] published a guest article on Lazy Man and Money. Naturally, I did mention that by implementing the ERR strategy for money management we reduced our […]

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