J.D. Roth: Master the Mental Game of Money

HUNT VALLEY, Md. ( TheStreet) -- In this special guest series of guest posts from four noted authors and bloggers on money and life, you're in for yet another treat.

J.D. Roth is an accidental personal finance expert. For more than five years he's been writing about smart money management at Get Rich Slowly. He's too humble to tell you himself, but his blog was chosen by Time as one of "The Best Blogs of 2011."
The author of Your Money: The Missing Manual admits to starting out with plenty of money troubles of his own.

He's the author of Your Money: The Missing Manual (O'Reilly Media, 2010), a personal finance columnist for Entrepreneur and a regular contributor to Time's Moneyland blog. Really, though, he just wants to write about travel -- but he's been kind enough to give us a synopsis anyway of the most potent lessons he's learned as a personal finance blogger.

J.D. Roth writes: Last weekend, I attended my 20-year college reunion. In 1991, I graduated from Willamette University with a degree in psychology (and a minor in writing). I also graduated with debt. Not student loans -- I was fortunate enough to have earned scholarships to pay my tuition -- but something far worse: credit card debt. Yes, it's true. I was one of those college students suckered into a life of debt by credit card offers in the student center. By the time I graduated from college, I had three credit cards and was desperate for a job to make my payments on them.

And so it began. For the next five years, I accumulated more and more credit card debt, topping out at more than $20,000 before I got fed up and cut up my cards. Even that wasn't enough to stop me from spending, though. I borrowed from family and friends. I took out personal loans. By 2004, I'd acquired more than $35,000 in consumer debt. It wouldn't have seemed so bad if I'd used this $35,000 to pay for medical bills or to start a business. But I didn't. I used the money to buy computers and comic books and other crazy stuff.

Getting smart about money
My story isn't unique, and I know that. Lots of people make dumb mistakes. But when you're living the dumb mistake, you feel all alone. You feel helpless. When you're in debt, it feels like you're drowning, like you'll never make it to shore. Here we are in 2011, though, and things have changed. Seven years ago, I had more than $35,000 in debt and was falling further behind every year. Today I have more than $35,000 in savings -- and I pull further ahead every year.

How'd I do it? Well, I didn't win the lottery, and I didn't rob a bank. Instead, I spent several years making small, subtle changes. I learned how to live a frugal lifestyle, cutting back on the things I didn't really need (like cable television). I discovered the debt snowball, a sort of mind game that allows people like me to finally pay off their debt instead of just wishing they had. I started to save for emergencies, for retirement and for fun. I worked long hours to bring in extra income. All of this was hard work, but it paid off. In December 2007, I became debt free and I've remained so ever since.