This week’s Five Frugal Minutes is with the lovely Shtinkykat – a thirty-something gal who took up PF blogging to atone for her ‘past financial sins’.  Enjoy!

Tell me a bit about your “lightbulb moment”.
My “lightbulb moment” was in March of 2007 when I applied for an American Express Clear Card.  I was desperate to transfer some of my high-interest credit card balance to a 0% interest card.  American Express instantly rejected me for:  1) serious delinquent payment history and 2.) Excessive debt-to-credit ratio.  I’d never been rejected for a credit card so this was a horrible slap in the face.

After the rejection, I tallied up my debt payments and I discovered, to my horror, that my monthly expenses were $500 over my monthly income.  I had no choice but to: (a) increase my income by taking a second job and/or (b) reduce my debt.   My second job as a telemarketer for a cheesy timeshare didn’t last for a month.  So I chose option (b).

I liquidated most of my employee stock option account, my savings and my Roth IRA to pay down $17,000 of my credit card debt immediately.   I also stopped contributing to my 401k (i.e., tax-deferred, employer sponsored retirement account) for 7 months to increase my cash flow.  At the time, liquidating my assets was the hardest and scariest thing I’d ever done.  But in hindsight, I wonder why didn’t I do this sooner?  I’m still heavily in debt, but I’ve since been able to live within my budget and not incur new debts; I can now see the light at the end of the tunnel.  Hurray!

What made you decide to start blogging?
I never knew people blogged about their personal finance until I read a MSN article about Sallie’s Niece’s blog.  I left comments on her blog regarding my struggles with student loan repayment and she suggested that I create my own blog.  I initially resisted the idea but the more I thought about it, the more it made sense.  I’m too embarrassed and ashamed to talk to my friends and family about the financial hole I’m in.  In contrast, my blog allows me to discuss my financial situation openly and honestly, which makes me accountable for every financial decision I make now.  The best part of blogging, though, is the feedback and encouragement I get from my readers.   I am grateful that the PF blogging community has been very supportive of my ongoing battle with my debt.

A lot of personal finance bloggers talk about keeping their “eyes on the prize” – What’s your prize?
Being debt-free with a completely paid-for home by age 60.  I’m not sure how much I’ll have in my retirement account(s) by then, but I figure if I’m debt free, I won’t need as much.  My parents were irresponsible with money and it’s really sad to watch them struggle in their old-age.  I want to spend my retirement doing stuff that makes life worth living – travelling, taking adult classes at the local community college (to keep my mind sharp), playing poker with my friends, and eating & drinking well.  Beyond that, though, I want to be financially secure enough that I can contribute to charity in a meaningful way.

What’s your top tip for saving money?
Ummm… it’s difficult to just pin-point one top tip, but here are my basics:
1.)    Having a budget and checking every week (if not daily) to make sure you’re on track;
2.)    Always budget some money for unexpected expenses (in addition to your emergency fund) and keep it separate from your savings.  You’ll be glad you have some “mad money” to spend when Mr. Murphy comes a-knockin’.
3.)    Automatic deposit into savings and retirement accounts – If your employer gives you the option to automatically deposit a portion of your paycheck into your savings, do it!  You won’t miss what you don’t see in your paycheck.
4.)    Pre-tax health spending account – If your employer allows you to put some of your pre-tax money into a flexible health spending account, you should do it.  You not only20reap the tax benefits, but you’ll have the comfort of knowing you won’t have to search for money to pay for doctor’s visits, prescription meds, contact lens replacements, etc.  Again, what you don’t see in your paycheck, you won’t miss.

Recommend a blog that you couldn’t live without?
I read everything on my blogroll everyday.  FruGal, Sallie’s Niece and MoneyBeagle are on my “do-not-miss” list.  But the one blog that often refer to is Jonathan’s My Money Blog.  It’s been up since 2005 and it is a repository of information.  He clearly does his homework and he is very generous about sharing his experiences and his opinions.

Has organizing your finances and living frugally had any other positive effect on your life, other than saving money?
Yes!  I used to complain that “fun stuff” always cost money but I discovered that what I used to consider “fun stuff” was just mindless, fleeting consumerism.  For example, I’ve discovered that I enjoy hiking nature trails much more than jogging on the human hamster-wheel (aka treadmill) at the gym.  I’ve picked up watercolor painting as a new hobby and I’ve started playing the piano again.  I read more now than before since the library is free.  I definitely feel like a more productive human being.  Now, if I can only get motivated to de-clutter my physical living space…