Lessons I've Learned From Being Broke

I don't have a lot of money. Like many of you, I've spent most of my twenties struggling to make ends meet and find financial success. I know first-hand what it's like to be up to my eyeballs in debt, live paycheck to paycheck and try to survive on a case of Ramen Noodles.

But Idobelieve that I manage my money well. When something is scarce, it's only natural to want to protect what little I have.

Cash may have been a rarity in my life, but I'm not complaining. I can actually say now (though I couldn't say it always) that I'm grateful for the years of financial hardship. Sometimes the most valuable lessons in life are learned outside your comfort zone. Being broke has taught me how to better manage my money so I can actually meet my financial goals. Sounds clich�, but it's been a blessing in disguise.

That's not to say poverty is a requirement for acquiring good money skills. Anyone can learn to be a good steward of what he or she has -- whether plentiful or lean.

What I've learned

1. Know your priorities. My husband, Jeremy, and I joke that our decorating style is the "refugee motif." We make do with whatever we can get -- as long as it's free. Our furniture may not match, and we still shudder when we think about the green and orange flowered sofa we had as newlyweds. But new furniture wasn't a priority when we were struggling to pay our utility bill. We learned early on how to prioritize and of sort our needs from our wants.

Some financial decisions are easy: Pay your rent instead of blowing the money on a big-screen TV, for example. Others are tougher. One year into our marriage, we got a tax refund of $300. Do we take a match to the sofa, save our pride and use the money to spruce up our pitiful apartment? Or do we buy a window air conditioner and save our sanity on those 100-degree days? We opted for the air conditioner, and I believe that decision saved our marriage. (Youtry getting along with someone when you're overheated and irritable!)

Years later, we're still facing difficult choices, only with greater financial consequences. Having a clear sense of our priorities and being able to label our needs and our wants is helping us make life's tough financial decisions. (See Tough Choices for more guidance.)

2. Debt is a vampire. I had never been in debt until I got married. My husband had a credit card he had used to pay for textbooks. Plus, he had an auto loan on a car that, incidentally, kept breaking down. (There's nothing more frustrating than paying to fix something you don't actually own.)

I soon learned how debt can steal your money. We'd make the minimum payments but never seemed to make much headway. We finally resolved to put every extra dime toward the credit card to be rid of it once and for all. We eventually paid it off, and we sold the car for a more-reliable model.

Since then, neither Jeremy nor I have ever carried a balance on a credit card, and we saved religiously to buy our last car with cash. I remember my dad telling me that the only things worth going into debt for were those that appreciated in value: a home and an education. Anything else will suck you dry. Lesson learned.