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From a Net Worth of -$40k to Homeownership

The secret to budgeting success? You’ve got to live … a little.

Jennifer, a 20-something IT analyst, used to buy every gadget that crossed her path. Now, her cousin calls her “The Queen of Cheap.”

Tune into this episode of Debt Stories to find out how she learned to enjoy life even more by curtailing her spending. Spoiler alert: her satisfaction has a lot to do with paying off all of her student loans and buying a beautiful new home in Chicago.


Jesse: Welcome, everyone. This is Episode 7 of Debt Stories: Real People Beating Debt & Winning Financially.

Today, we’ll meet Jennifer, a born-and-raised Chicagoan in her late 20s, who’s budgeting philosophy boils down to “You’ve gotta live a little.”

For most of us, the “living” part is easy. It’s the “little” part that can get us into trouble.

So, let’s dive in and hear how Jennifer went from dropping cash on every gadget that crossed her path to earning the nickname “the Queen of Cheap.”—a title lovingly bestowed upon her by a cousin after she started budgeting, not that Jennifer minds. As of this interview, she’s paid off all of her student loans and most of her credit card debt, and purchased her very first home in Chicago …

Jennifer: Yeah. I closed on the house in December, so I got it at the end of 2016. Still trying to navigate and figure things out in terms of what, like, what month to month can be like, but I think I have a decent handle on things for now.

I work as an IT analyst for a hospitality company. … I’ve been doing IT work for the last seven years. My mom lives with me. I’m single so it’s just myself and her, and we have a townhome.

Jesse: Jennifer’s still feeling out the true costs of her new home.

Jennifer: The property tax was just raised twice this year, so it’s pretty expensive. The tricky part is I bought new construction so you don’t even know the actual property tax until your bill comes out in 2018 for this year’s tax.

Jesse: Home ownership in Chicago proper is relatively expensive and, apparently, streamed TV is, too.

Jennifer: Cost of living is actually pretty high. We have strange taxes that probably other places in the country doesn’t have. We have a tax on Netflix and Hulu, so instead of paying $7.99 like everybody else, I actually pay $8.70.

Jesse: Living in a high-cost city doesn’t help if you’ve got money worries, of course, but that’s not where Jennifer’s debt story began …

Jennifer: It kinda started when I was in college. You go to the fairs and you see someone offer you ice cream and a tee shirt and you’re like, what do I have to do? Sign your name on a dotted line, get a credit card. Then I joined a sorority, so you just keep spending and spending and spending, so when you graduated and I sat down and I looked at my debt, it was like, I don’t want to look at that — out of sight, out of mind — so I just kept spending. And then I ended up one day really sitting down and looking at my debts. I plugged things into Mint and I saw that my net worth was, like, I want to say 40 grand in the hole.

That’s including student loan, credit card debts. Then you’re like, okay, so what do I do?

Jesse: For Jennifer, like with so many people who realize they’re in deep, the answer wasn’t clear. Facing $40,000 of debt can be a bit overwhelming (especially in your mid-20s).

Jennifer: That was my first attempt to try and get myself on track. I mean, I just saw the app Mint, and I was like let’s just plug it in and see how things go and see how it works out.

There was no serious attempt to try get anything down.

Jesse: She had the cold, hard numbers … but what Jennifer really needed was a plan to pay it all off. Instead, she decided to do what all of her friends seemed to be doing: buy a house. Flashback to 2013:

Jennifer: I think the first, like, real hit-home call was when I’m going through the numbers with the banker about buying homes and she’s like, “I can’t approve you for your loan.” And that knocks you flat.

Jesse: Ouch.

Jennifer: The second thing that got me to really sit down and think about everything was my company announced that they were closing our division down. So then it’s like, you have no emergency fund. You’re thinking of buying a house and you’re still in debt. You’re like, alright, now it’s getting serious.

Jesse: Getting declined for the home loan and possible job loss were stressful, but not nearly as worrisome as what happened next.

Jennifer: The final thing that got me to really sit down and figure out my situation was my mom had to have open heart surgery. I was home one night and as I’m driving back from the hospital and my mom was recovering but it’s still a long road recovery ahead of her so I was trying to help her.

Jesse: The realization that she needed to be there for her mom was the final straw. Jennifer knew it was time to get out of debt and whip her finances into shape, so she started Googling.

Jennifer: I sat down and I was like budget apps. Then I came across You Need A Budget signed up for the trial and I really started watching the videos. And this was the time I tried it and I stayed through with it from 2015 until now; so it’s been almost two years.

Really that was the night I sat down, punched everything in. Let’s attack this, let’s come up with a game plan, a strategy of how to undo this. If you plan on getting a house, this is the way to go. No one can say, “You’re rejected.” There’s been embarrassing situations in the years prior to that, that you try to get a credit card and they actually say your credit card score out loud and you’re like, that’s embarrassing.

Jesse: Today, Jennifer has nothing to be embarrassed about. What a 180!

Jennifer: I paid off all of my student loans. And I owed 28 grand!

I paid off my credit card debts. Actually, I was slowly making the payments but then I’m looking at my debts, and I’m like, why isn’t that going down? I had some money saved aside and I actually took all my debts and basically ranked them by interest rate and then attacked the highest interest rate first, while still paying the minimum.

It was hard, but I had to tell myself “short term pain, long term gain.”

Jesse: Jennifer scrutinized her lifestyle and cut back in meaningful, doable ways. And her work didn’t go unnoticed …

Jennifer: I realized I ate out almost $500, $600. And then one month was $1,000, and I don’t even remember eating out that much that month! I really cut back on eating out.

I would actually drive my car to work every day and paid, I want to say $20 a day to park my car. So I stopped doing that. And I stopped just buying random electronics, anything I fancy.

So, I literally had cut myself off to the point where some family members were actually, “Are you okay?” They didn’t know about my debt thing, so now they see a 180 of the person who can’t seem to stop spending has basically been, as my cousin calls me, queen of the cheap.

She was like, “Okay, you don’t do this and you don’t do that” and she’s like, “You’re always looking for deals and bargains now, what’s going on?” I explained to her what I was doing. She’s like, “You’ve got to live a little.” I was like, yeah, I can live a little but I know my limits now. I think the biggest thing I’ve learnt during this whole process is that since I never gave myself boundaries, I just went all over the place. That didn’t help. It just increased my debt, you look at your numbers, you look at everything and you’re like, “oh my God what do I do?”

Jesse: Everyone wants to ‘live a little’ but ‘live a little’ and ‘live without limits at all’—those are very, very different things. And, as it turns out, setting those limits helped Jennifer get more enjoyment from her spending.

Jennifer: When I moved to my new townhome really drove up another point home that I spent a lot of my money on material things but I never spent it on experiences. I was throwing away things… like I didn’t even realize why did you buy this, why did you get this, why did you have four copies of the same movie.I’m like why do I have this movie lying around. I realized that material things don’t go with you if one day you leave this world. Experiences, unique experiences are the ones you take forever and no one can take away from you.

I’m going on a vacation now. I get to see the world. That’s what that really drove home for me.

The best trip I went on was I went to Toronto last year.

It’s amazing, the more I have to plan for it, the more I had to look at, okay, how much are plane tickets, how much… it forces me to sit down and evaluate what’s my budget. What do I have to spend on this versus before I was just like I would walk in the store I can buy this new iPhone. Itt forces me to make sure I live within my means. I find myself sometimes wanting to buy something but I always catch myself in time.

Jesse: Now, when Jennifer turns to her credit card, she’s in control.

Jennifer: I do have a balance but the balance is always paid in full by the due date.

Jesse: And her friends and family are impressed.

Jennifer: When I told people that I eliminated my student loan, they’re like, “Oh my God, how did you do it?” They see my application of discipline.

Jesse: So, what helped her stay the course?

Jennifer: The reason I was able to stay on track as long as I have is just really making sure I was well within my means. There’s no perfect month. If someone says “I had the perfect budgeted month,” they’re lying … because it’s impossible. I did seek out a financial adviser halfway through it, to make sure I’m not going crazy here. I think that was actually money not well spent because everything he told me, I already knew.

Jesse: Jennifer also listens to podcasts and reads to keep herself motivated.

Jennifer: I think just really diving deep into the personal finance and really listening to different podcasts, trying to keep myself motivated and challenging myself. I didn’t want to slip. That was the one thing, I did not want to go back into debt because my biggest fear is if I slip this time I think that was it.

Some of the podcasts I like, one of them was Stacking Benjamin was pretty good. It helped me to learn about investing. YNAB, I listen to you in the morning. The book I think that got to me is Jason Vitug-He released a book last year, You Only Live Once. That really helped reinforce some things. Also it’s about balancing because you can’t just go 100% in. You find what works for you. That’s the one thing that really helped.

Jesse: The key to living within her budget has been allowing herself some fun money—we all need some—and Jennifer watches herself closely on this front.

Jennifer: Sometimes, I get close to the border where it’s like, okay, you’re cutting it close this month with entertainment. That’s my guilty pleasure. I make sure I have fun a little bit but I do it in moderation instead of in excess. I was going out a lot, just to hang out with friends and stuff. That’s one of those things where it’s still my guilty pleasure, non-negotiable, but, hey, you’ve got to live a little.

Jesse: There it is. You’ve got to live … a little—wise words. Jennifer also shared this:

Jennifer: I think the biggest thing that kept me from achieving my goals earlier was the truth was in front of me for many years and I wasn’t honest with myself.In this whole debt journey process, I learnt a lot about myself I think because I had to face things head on, even when I didn’t want to.

Something that Sun Tzu says in The Art of War is “To know thy enemy is to know thyself.” To know your debt is to understand, how are you as a person, … what are your vices and your weakness and your weak points,

Jesse: Interesting, “If you know your debt, you know yourself.”

Money truly is a magnifying glass for our inclinations—it really does accentuate what you already are, most of the time.

If you’re struggling with money, Jennifer stresses the importance of taking it one day (or dollar) at a time …

Jennifer: Be realistic. There’ll be months where you have to choose between certain things. It’s just … you can’t be too hard on yourself.

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Do You Have a Debt Story?

Wanna know what’s better than an amazing debt makeover story? Several debt makeover stories! If you’re a YNABer and you’d be willing to let Jesse interview you for a future episode, write to us at In your email, include a short paragraph or a few bullets about your financial hurdles and how you overcame them.

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