in FS, Psychology

The Turning Point

I had lunch with my friend Bo recently. Over our enchiladas, we talked about how dumb we were when we younger, and how we’d do things differently if we could. To what point would we return if we wanted to change our lives?

“I’d go back to the end of my sophomore year of high school,” Bo said.

“That’s a long way,” I said.

“But think of compound interest, J.D! And by then I was earning money. I was earning money and I was spending it. If I could go back, I would save like crazy. I would invest in mutual funds. I would buy a house — a fixer-upper. I’d spend much less on food and clothes and comics.”

Like me, Bo is a comic book collector. In fact, when we were in college, I gave him a bunch of my comics. Boy, was I dumb. I was dumb in a lot of ways then. If I could go back, that’s the time I’d pick.

I told Bo about signing up for my first credit card, I told him about the $1500 Frisbee, I told him about trying to spend money to keep up appearances with the other students on campus. “If I could go back,” I said, “I’d go back to the sophomore year of college.”

“Your story’s interesting,” Bo told me, “because I think it’s similar to the stories of so many other people. And because you’ve managed to make it through and become successful.”

“Thanks,” I said. “I’m just glad to have turned things around.”

“How did you do it?” Bo asked. “What was the turning point? Do you remember?”

Turning away from debt
“Sure,” I said. “I tell this story all of the time. My turning point came in the summer of 2004, after we bought our new house. I had been living paycheck-to-paycheck on $42,000 a year, spending every penny I earned on books, comics, and other toys. Just Stuff, you know?” Bo nodded. He and I have talked about Stuff before.

“Though I could afford it on paper, I hadn’t counted on the unexpected costs that come with a 100-year-old house. When we started having to spend for new insulation and to replace the walls and to remodel the bathroom, I felt like I was drowning. I felt out of control. I’d been in debt for a decade and managed to avoid disaster, but I really felt like disaster was just around the corner.”

“But what was your turning point?” Bo asked, sipping his Dr. Pepper.

“Right,” I said. “My turning point came when I started complaining about my debt to friends. A couple of them pulled me aside and shared books with me. I read them and tried to follow their advice. To my surprise, it worked. Ever since then, I’ve been on this path. I make mistakes sometimes, but that’s when I changed direction.”

“That’s awesome,” Bo said. “Reaching a turning point is huge. It sucks to be out of control. When you’re out of control, it can seem impossible to turn things around. But once you do, it’s great. Just like you and your baby steps. They’re small moves, but they make you feel powerful. Being in control makes you feel powerful. Being in control is a high. And being in control when you had been out of control is even better.”

“What about you?” I asked. “What was your turning point?”

Seeking a better life
“Well, I was never in debt like you,” Bo said. “If there was a turning point for me, it was the day I realized that I didn’t want to work for the rest of my life. Of course, you can’t just stop working. You can’t just put it on autopilot.”

We’d finished our meals and were picking at the chips and salsa by this point. Bo continued: “I remember sitting down and counting the productive years I had left, and then counting the years that I’d already worked. I realized that I had to get on the ball if I wanted to retire early, if I wanted to have time to do the things I want to do.”

“Early retirement’s a great goal,” I said. “But it seems so big and so far away, it can be hard to stay on-task.”

Bo nodded. “Any time I see something that I want — which is all the time — I’ll ask myself if it’s something I really need, if it’s something I’m willing to delay retirement for. Every dollar I spend on Stuff now is a dollar that could have helped me quit work sooner. Do I really want to spend money on frivolous crap that goes into boxes? Or do I want to save my money for a better future?”

Bo paused for a moment before he continued. “This may sound strange,” he said, “but Hurricane Katrina had a huge impact on me. When I saw all of these people with their Stuff floating down the street…when I thought of it in those terms, I realized that my house is just full of crap. I realized that I need to get rid of Stuff, not bring more home.”

“Fortunately, my wife and I are on the same page. We have the same goal. Like everybody, we still buy Stuff. But we don’t do nearly as much as I used to. We’d rather have the money so that someday we could do things with our family instead of having Stuff that sits in our drawer.”

“That’s great,” I said. “It sounds like you’ve always been pretty smart with money, but for you the turning point wasn’t about changing bad habits. It was about developing better habits.”

“Right,” Bo said. “I’ve always understood where I wanted to go and how to get there, but I always talked a big game, and didn’t really walk it. Then one day I realized that every penny I spent that wasn’t part of my plan, was just an impediment to me quitting my job and spending time with my family.”

We paid the check and said good-bye, agreeing to meet for lunch in a few months. But this conversation stuck in my head. Not everyone experiences a turning point, and not everyone needs one. But I believe that for those who do, this turnaround can be powerful, life-defining experience.

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44 Comments

  1. Awesome story!

    My turning point is after we got married and found out my wife was pregnant. We always knew in the back of our mind that we needed to get control of our financial lives, but had been putting it off.

    I started following Zen Habits and this blog in the early days and read The Total Money Makeover and Your Money Or Your Life. Between those 4 resources, our total financial life began to rapidly change.

    Lately, I’ve been motivated by factors similar to Bo. I simply want to be debt-free as fast as possible, so that we are truly free to live and work how we so choose.

    Awesome post!

  2. As always, thanks for sharing such an inspirational post, JD!

    My turning point was last October when I began looking for ways to save on our grocery bill. Suddenly I found resource after resource on budgeting and financial success. I realized a life of debt and “Stuff” is not mandatory–I could choose a different path. And so I did.

    Luckily my husband fell right into the idea with me, and since then we’ve been much better about living (somewhat) under our income and paying off our debt, which thankfully isn’t astronimical. We are still tweaking our system and have already seen encouraging results. We look forward to what lies ahead now.

    My parents have a mountain of car and credit card debt, and my husband’s parents are filing bankruptcy right now. We just never thought of any way of handling money but to spend, spend, spend–every dime you could afford and every dime you could get financed.

    I thank God every day that we found a new way of living and will be passing on a different legacy to our children.

  3. I’m a lot older (57) than most of the people here but maybe my “moment” will be useful to some.

    I was layed off in 1982 with a wife and two children (3 and 1). I worked for the largest employer in town and the housing market collapsed with word of the layoffs. We had enough money with unemployment to survive 3 months. From then on, foreclosure was inevitable.

    I managed to find a job within days and the new company bought my house for what I had paid for it 18 months earlier.

    That’s what I call my “Scarlett O’Hara moment.” I said like Scarlett (Gone With the Wind – since it’s an ancient movie) that I’d never be poor again.

    Since then, we’ve paid for 3 kids to go through college and they are successfully out on their own. We are also totally financially independent so that I’m only still employed because I like what I do.

    I’d like to broaden my activities and retire soon. I’m trying to decide with my wife how we’d like to structure our lives when I do.

  4. My turning point was when my car broke down and I had to pay to the repairperson almost half of what the car was actually worth! Granted my car didn’t cost much to begin with, but it costed a lot for my small budget. I eventually found a higher paying job closer to my residence and saved as much as possible in 401k, IRA and CD ladders.
    In fact my CD income is growing pretty well recently as it is mostly laddered in long-term Certificates of deposit.

  5. My turning point was 1973, in business college, and finding out about the Magic of Compound Interest. Back then computer class involved writing programs in COBOL. My favorite program was one that showed how to make a million bucks by savings and getting interest on my savings and on my interest. It was eye opening to see that after only a few years the money being generated on the interest was huge compared to my contributions. Magic!

  6. I agree with Bo’s point about the “stuff” floating down the street during Hurricane Katrina. Really does make you think.

  7. My turning point came when I realized that my emotional/mental issues were at the heart of my financial self destruction. I tried for years to bury my pain with daily emotional highs acquired in shopping bags. I did that for years. The stuff piled up and so did the debt. We never had any money because I spent it all, no matter how much came into the household. I would spend every cent. When I finally was able to see the whats and whys of my actions, I knew that I was taking my entire family straight to the poorhouse with me. I knew then that I had to face up. I’ve been “facing up” for the past 400+ days and, yes, I am making progress.

  8. Great post.

    I really love how often you update your blog JD. *Thumbs Up*

    My turning point was pretty recent, and lady luck definitely gave me a big kiss because it was only when I was 19 (I am 20 now).

    I have always wanted to have my own successful business. Where this came from, I am not sure, because my Ma is poor and has horrible financial awareness (but has more love to give than anyone I have ever met :)), and my dad passed when I was 2.

    I’ll spare the long story, but I always had this arrogant, naive mindset that I could ‘easily pay for it…later;’ I’ll just get some big web design job and it will be no problem. Where that ended me up @ was 7k in debt and in an apartment that I couldn’t pay for by the time I was 19. I was living by myself with no car in Michigan (during winter); snow makes it hard to travel around ;).

    The thing that really got me is that I was making pretty decent money; definitely enough money to pay for my expenses. However, I always seemed to be rich or broke; feast and famine. This was because I would always get my money in a lump sum for the web jobs I was doing and then immediately I would try to pay off all my bills, and then some.

    I had no sort of budget, and I would often spend too much money on my debt @ the wrong times (always had the mindset I would get more money). It wasn’t until last January that I had a rather slow month of work and I was so broke I couldn’t see straight… And that’s where it happened. I was in my little apartment with a foot of snow outside, phone turned off, and all by myself for days. That was my turning point. I put my pride aside and knew that the ‘Spend now, make more later, and spend some more’ mentality just didn’t work. I emerged myself into personal finance education and haven’t got out since. I have no plans of leaving.

    I now have my debt under complete control, I started a savings, changed my mindset, and most importantly, removed the stress of money. No longer do I worry about paying bills or how much my debt is, it is all part of my budget and is already taken care of. I also picked up a regular full-time job while I increase my financial education and money management; as well as having a consistent income. I still work on my business, but now I don’t have to worry about having a slow month which has relieved a lot of stress.

    All my regular job checks are set up for 10% savings, 5% ‘Big Want’ (like a vacation), and 25% debt. After those are taken out I minus the remaining from my bills, and the remaining money is mine to do what I want with. The funny thing is, with that remaining money, I don’t want to spend it on anything really. The only thing I buy is books and saving for the Palm Pre (always been a big cell phone person, that is my financial foible ;)).

    From the outside, it kind of seems like I became a ‘hermit’ and don’t really do much. I used to go out and party all the time with my friends, and spend money wherever someone would take it. Used to have a gym membership @ the nicest gym around and work out all the time with friends, etc. I don’t know if it will catch up with me, but I am very content with where I am. I can sit down and read GRS or work on my business for hours in my free time and have a genuine good, happy feeling I did. (Side note: I also moved to Florida and don’t have many friends yet, but I still think I would have the same mindset regardless).

    The thing I am worried about is I kind of have the same mindset that I used to have with money, but with time: “I will have time later to do this and that.” I have really thought about this, and it does make sense to me. I would rather save the money I am making and be debt free then going out and buying a really nice outfit, and then going out to the club and showing it off. I would rather save up my money for a nice tropical vacation, or in the long run save my money and be rich as I have always dreamed. I am going to be a millionaire, even if that means saving every penny I can.

    Guess this ‘short’ story filled up quick! A lot of my financial awareness is definitely from this blog, JD, thank you very much for making it and helping me get out of my rut!

    Dave

  9. I guess my turning point was when I realised I didn’t want to buy expensive clothes after all. “But why? I have enough money in the bank, I could indulge in nice new stuff.” That was right, but after all I didn’t feel like it. I slowly realised I didn’t think it was worth (it sounds so simple now!), that I wanted to spend more wisely my money, to buy and own *less* clothes, and then less clothes became “less stuff”.

  10. My main turning point is not about money. It’s about personal life and having an inflated opinion about my own looks and turning down a perfectly nice guy while waiting for a prince and having inflated opinion about my looks.

    As to the money, my turning point is about investment choices rather than spending. It is after 1987 crash when I got spooked by the market and started putting most of my retirement and other savings into CDs/stable value. I wish that instead I had a) invested more in the market back then b) invested some part of my money in government bonds which had very high yields at the time. Had I done that I would’ve been able to retire now even with last year’s crash. Not to mention that had I invested in the market when I was young, I would have most certainly been less exposed to the market in 2008. One of the reasons I haven’t gotten out in 2007 – I was worried about the market then – was trying to make up for these great years of return I missed. Now, I still lost “only” 20% since I kept 40-45% of my money outside the market; also some of the individual stocks I had lost less than the market in 2008. But it was still a low 6 digit amount.

    But… This was before internet, information wasn’t as readily available, and having come from the Soviet Union just a few years earlier my parents didn’t know much either.

    As to spending, I have no regrets. I am perfectly content with the way I spent in college: yes, I spent all of the money I saved over the year from my scholarship and added a small subsidized student loan as an undergrad to study abroad in Italy. So what? I paid off this loan in full a few months after I started working with one check, a month before the interest was supposed to start to occur, a small price to pay for once-in-a-lifetime experience. Now at the age of 49 I still remember this trip. It was worth every penny of it.

    I am still doing fine financially. I suppose if I wanted to move into a cheaper area I might have even been able to retire, but not quite in the style I want. As is, and barring some catastrophe that would make cash, bonds and stocks worthless (I am around 50-50 now with cash/bonds vs stocks/commodities), and if I manage to stay employed for another 10 years, I’ll be just fine.

    I don’t believe the choice is between 1) save on every single thing and refuse oneself nicer things in life or 2) spend like crazy and be in debt. I think there is in-between here, some balance between saving and spending that would enable one to enjoy life and not have regrets regardless of if one gets a terminal illness tomorrow or if one lives a long life.

  11. These are my favorite kinds of posts on PF blogs. They generate great discussion in the comments.

    Personally, I’m not sure whether or not I’ve reached a turning point. Perhaps I’m still within one. What I am sure of is that I’d like to work less, even if that means earning less. My free time is more important to me than most things, and I’d like to maximize it in whatever course I take after grad school.

  12. First of all, what a great site. I’m still a newer internet user, but read this area daily.

    I had a turning point a few months ago. I had a job loss in June of 05. My company was growing and successfull, but a competitor bought it out and closed my site. I had lived in that area for 8 years after college and loved the area, while making good money. I was single and bought several new vehicles over that time, begining to accumulate a lot of debt, but with cheap rent I didnt care about building equity or saving.

    I interviewed and got a job with the buyout company, but had to move 200 miles away. The rent I paid after I moved was 3 times what I was paying with no change in pay.

    It is now almost 4 years later. I am still questioning my move, and trying to recover the debt from the new vehicles.

    The following is my turning point:
    I have been dating a single mom of 2 for a while now. The oldest is in 6th and the other in 1st. At 35 years old myself, I have no savings for any kids college funds or for a home and yard for the kids to play in.

    I wish I could go back to that last year of college and know then what I know now about money!!

    Thanks and keep up the good work to everyone here, as we are not alone in what we are dealing with in todays economy.

    Todd

  13. For me, getting married was the turning point. My husband-to-be had been a chronic debtor, had declared bankruptcy not longer after we met, and never seemed to really get his finances together. I’d done better for a number of reasons, but when we got married, things HAD to change. We had one salary (mine), had moved across the country, and so on. After tracking our expenses, we paid off all credit cards, bought a house, saved money, etc. We’re left now with student loans (large) and a mortgage, but are fine. We will never be the “let’s scrimp and save and eat towels and never go out so we’ll have more money someday” YMOYL types (a book I loathe for its preachiness), but we’ve found a good balance of spending and enjoying now and saving for later.

  14. To KS:

    I like the way you think!!!!! “A good balance of spending and enjoying now, and saving for later,” is my target now that I have reached my turning point.

    Todd

  15. I’ve actually had multiple turning points in my life. Early on in my life, I had the essentially standard rotten financial skills most kids of the era had. I was a technical geek doing computer support, living in debt due to bad decisions, and much of the usual stuff.

    My first turning point was when I figured out how I could apply these strange things called “spreadsheets” to my own finances. I learned a few things from the financial analysts whose computers I supported, and ran numbers using my own finances.

    I was headed for a personal melt-down, but once I saw it coming, I was able to modify my behavior enough to stay functioning. It took me forever to pay off things, and over a decades worth of effort was wiped out in a single nine-month bout of unemployment. I’d learned some things, but not enough. It took another nine years to get back to the wipe-out point.

    This is where my second turning point came up. About two years ago I was reading article headers on fark.com, when one of them pointed to an on-line banking comparison article on, of all places, GRS. I read the article, then started poking around the site. Between GRS and the various other sites linked from it, I learned a great deal. I have now beaten an old credit card debt mostly into submission. I actually got it to zero, then had an emergency fund, then some expensive things happened, drained the EF, and racked up some credit card debt again. However, I’m slowly re-building the EF, and the credit card should be clear by July if nothing else expensive happens.

    I’d known for years my finances were a mess, I just needed a way to learn how to manage money. I found that in the PF community on the net.

    I’ve cut down on the stuff issues. Getting rid of the clutter from existing stuff is a separate problem, but is being worked on. My finances are now plotted out months and years in advance.

    I split the patterns on life in general. At home, frugal rules the roost now. I made the choice to do frugal on the home front so that I can do social things with my friends without being too much of a drag by not spending anything. I tend to steer toward cheaper entertainments, and its been working well. I have one pair of friends where we regularly get together, do breakfast out, then go do a round of “what do we need that’s on sale?”, then settle in for an evening of watching DVDs while making fun of them, MST3K style.

    Another group of friends gets together and watches old MST3K stuff, adding jokes as we go. Cheap entertainment all around.

    Basically, I budget to get the necessities paid for so that I can be a bit freer on the quality-of-life side of things. I also do trips to some events that relate to common interests among my friends, I’ve gotten to the point where I’m paying cash (effectively) for these trips. I save up the money ahead, then move it to a debit card to pay for things like hotel rooms and gas on the trip.

    So, the things I’ve learned at GRS and related sites not only turned around my finances, but made for improvements in my life in general.

  16. I got to the point where I could *not* pay both my rent and my credit card bills. I defaulted on all my debt. I let the bank repossess my car.

    I stopped using credit cards entirely from then on. That was about five years ago. I was only 23 (at least I got that crisis out of the way early). Since then, I’ve only taken out one loan for anything (a car loan), and only plan on taking one more out in the future (for a mortgage). Everything else has been paid in cash.

    I’ve done much better since. It was an expensive, stressful lesson, but it really did teach me a lot about how to live my life.

  17. I had two turning points, one major and one minor.

    The first turning point was when the furnace blew up in the middle of the winter and I had to ask my mom for 1800 dollars to fix it. That’s a pretty low point for some one who is fiercely independent. That set me on the path to wipe out my debt.

    The minor turning point was when gas jumped last summer, this super charged me to pay off all of my debt. Once the daily costs of living rose significantly in such a short time, I knew I needed to better track my expenses and find out where *my* money went.

    I canceled the cable, cut the home phone, got rid of the data plan on my cell phone, switched insurance providers, refinanced my mortgage by 2 percentage points, set a food budget, and stopped using credit cards all together. This put in excess of a thousand extra dollars in my pocket a month.

    The amount of money just slipping through my fingers every month was mind boggling. I was running my financial life on auto pilot and I will never let that happen again.

  18. J.D.,

    I read your comments about the conversation with your friend and I guess I’ve never realized how similar our financial melt down stories are. My wife and I had the same experience of a mortgage payment almost sinking us in 2004 and we used that experience to move to a much more comfortable place financially today. So I guess that was my first turning point.

    So here’s my second one. I read above your friend is striving for an early retirement by forgoing all current desires for a future early retirement. I’ve been working on my education requirements for the CFP so by now I’m well aware of the concept of TVM (time value of money). Money invested today will grow and has the potential for a larger return than money acquired later. So your friend is working hard and sacrificing for the possibility of a return of a greater sum, in the future.

    After some life changing events over the past two years I began to embrace what I call the TVT (time value of time) Time invested today will have a greater return now and in the future. I’ve slowed down considerably on my frugality and working extra hours and jobs to save and pay down debt. I purchased a frivolous item this past year that I’ve wanted for several years. Why? Because I had arrived at a comfortable point in my finances, but I was trying to earn more to become more comfortable. While I was accumulating money I was losing valuable time with my family. Besides there is no guarantee I would live long enough to enjoy the sacrifice of the productive years of my youth. I would rather invest the time I know I have now and realize a guaranteed return, then fore go my time and see what I’m left with 30 years from now.

    So now I am working to find a balance in the time value of money and the time value of my time. While this may not lead to the amount of wealth other people envy, I know it will provide the life I won’t regret.

  19. GRS is my favorite PF blog. Keep up the good work, JD!

    My turning point came ten years ago when I got married. The second night I was married I couldn’t sleep, realizing that I had not saved any money!

    Oh, I had always maxed out my 401K and funded IRAs, so I was doing well in that way, but aside from that, very little else.

    So I embarked on a full-court press. Started saving (automatic deductions from checking to savings, when saving got up, buy a CDs); started automatic mutual fund deductions, cutting expenses and not splurging on junk.

    Has made a big difference in my ‘fear of the future’ addiction. I have calmed down in many ways.

    It helps that my wife is very frugal.

    I really am impressed with poster @8 who said:
    >>My turning point came when I realized that my emotional/mental issues were at the heart of my financial self destruction.

  20. Older and slower- I do not regret any travel I did nor places I lived. There are many. They are all a part of me. Learning how to make the most of what you have came from my husband. How to invest it came from Ron Blue and Jane Bryant Quinn- both long gone from the money scene(made enough to leave it). I need little when out on “the farm”, but know how to have a really good time when I visit “the city”. Looking forward to the last 40 years of my life. Mistakes, turning points and grandchildren- there is a great mix!

  21. I guess my emotional turning point was when my father injured his leg four years ago. He had to spend a summer on crutches, during which I cooked, cleaned and ironed for the family, as my mum was at work all day. It was the summer that I really understood what keeping a household means and resolved to always be financially independent and never to rely on things, because when you’re phoning an ambulance for a family member you don’t give a monkey’s about the latest video game.

  22. So many of us kick ourselves about how much money we wasted prior to our turning points, and so I remember something that Dr. Phil said about that that resonnated with me. He said “as far as all that money that you spent, (wasted), in your past, look at it as tuition that you had to pay until you finally learned how to become responsible with money.” Everyones’ cost of tuition is different, but the point is that when I viewed it that way, I no longer felt stupid about my past or wasting my money, and could finally let it go. I just think, “yeah, that was the tuition that I had to pay until I finally learned how to live within my means, rather than living out of control.”

  23. I was always careful with money so my story is a bit different than most. But like Poster #6, what I think made me even more diligent was being a finance major in college and learning if you put money away now and do nothing else – it will be worth a large sum later. However, if you wait 20 years before you put money away, you will have to put away a much bigger amount. That struck a cord and kept me on the straight and narrow. I’ve been able to stay home with my 3 children for 7 years because of the early savings I did and I have a good start on retirement and kids’ college.

    That’s why it’s so important to teach our kids smart finances at an early age – the younger they have their “turning point” the better.

  24. Sandy E. – Thanks for that Dr. Phil quote. I’ve been really beating myself up over all the years of lost opportunities.

  25. Great to think about this! My turning point was graduating from college and realizing I don’t have the hundred thousand dollar salary I was promised by everyone while at Stanford. But I do have some student loans to pay off.

    I got depressed and then I got with it. I read personal finance blogs, started tracking my spending and setting up my financial infrastructure.

    I know feel more in control and therefore happier about my finances.

  26. My turning point was when my mother-in-law died at 52 of heart disease. I realized that my husband’s genetics are a very real threat to us enjoying retirement together, and retiring as early as possible will give us as much time together as possible.

  27. My turning point was in 6th grade, 19 years ago when someone told me that i could goof off and have fun until the 9th grade. The 9th grade is when it all started, as grades accumulated, and lead to either millions of $$$$$ in your career, or a life of debt and failure if you got poor grades. Hence, I studied hard, got into a fantastic university, and after my full year of work, my W2 form said $99,700. I was below $100,000 because I put $5,000 into my 401k. That was in 2000 at age 22.5. I have never made less than 100K since i started working 9 years ago, and I have either saved or invested 100% of my bonus every year. At age 31, I’ve definitely made investing mistakes, and I will learn from these the next 10 years.

    I plan to make a decision to retire at the age of 42, after 20 years in finance. I’ll either take it really easy, or I’ll just quite and kick back.

    I owe so much to the 9th grader on the bus who told me in 6th grade to not fook it up, and study hard. I’ve reconnected with a lot of people over Facebook, and e-mail, and it is very apparent that those who studied hard in HS turned out MUCH BETTER, than those who slacked due to getting into a better college, and getting a better job.

    RSC

  28. I wouldn’t call it a turning point in that sence, but as i started working in my first job after university this year, i thought about my future aims. Getting financial freedom got me on the track not spending all that earned money, so that i could possible retire at the age of 60.

    So i live on a frugal, nearby student level at the moment. My girlfriend and my parents don’t understand this. They say: now you have money, buy this and that.

  29. My turning point came a year out of college. I went to pay my monthly credit card bill and realized I couldn’t even remember what I had bought that I was now paying for.

  30. My turning point came around 8 months ago. I was tired of living paycheck to paycheck and having to worry about money more then I thought I should. I paid off the small amount of debt I had. I almost have $3,000 dollars saved now. My goal is to enter the work force full time (I graduate from college in 1 year) with $5,000 dollars in savings. This site has helped a lot.

  31. I always liked the saying “Live your life as if you’ll die tomorrow, but plan your life as if you’ll live forever.” It embodies that balance we fight for between security and not getting so stuck that we don’t live it up while we’ve got it.

  32. “Fortunately, my wife and I are on the same page.”

    THAT is one of the most important keys to anything. Without it, all is lost. I’m sure that many will attest to that!

  33. I think my turning point started in around July last year but I am still in the turning circle. There was no real reason my turning point came about – I guess I just realised one day that I had to start ‘now’ rather than always saying – after I graduate, after I get a ‘real’ job, after I get married, etc. I realised there would always be some reason to postpone starting being financially smart.

    I am now a lot more conscious of my money but I still slip up a lot and so I don’t think I have made a full turn yet. I am gettign there though. I think the main problem is I have never been in debt and therefore have never been scared into beign financially smart.

    At the moment I am in a stage where I need constant motivation to make wise money decisions – I am forever forgetting that I am not meant to be buying new clothes etc. I try to keep money in my head at all times by reading PF blogs daily, reading books like YMOYL, etc. but then I find myself in a shop handing over a credit card without even thinking. When I stop doing that I will know I have made the full turn.

  34. Great post!

    Things I wish I hadn’t done:

    – Gotten married in my early 20s– I should have waited until at least age 30
    – Staying married as long as I did– I am the one who suggested counseling and wanted to work it out
    – Not worked harder in college– I could have gotten a graduate school scholarship
    – Cracked my 401(k) after a layoff directly after my divorce
    – Sold a completely paid off car and buying a new one

    Things I wish I had done:

    – Started businesses at a younger age
    – Taken a year off to work between my sophomore and junior years in college
    – Met my wife sooner– we grew up within miles of each other, but met in our 30s
    – Funded IRAs when I was much younger
    Purchased permanent life insurance at a younger age
    – Learned more basic skills sooner (Cooking, auto repair, and home repair)

    Here is more:
    Do-Overs and Redirected Choices http://divorceddadfrugaldad.com/2009/01/06/doovers-and-redirected-choices.aspx

  35. My turning point–or, as my father likes to put it, ‘scared straight moment’–was three years ago. I’d always been very conservative with money, not out of any real knowledge, but because I didn’t like owing other people. So I’d save up, but it was always for specific things (Stuff) or events. Then, I bought my first home (a condo) with some help from my family–and then two months later, lost my job and found myself with two mortgages to pay and next to no income coming in.

    On the one hand, I managed to do everything right after losing my job–immediately applied for unemployment, started job hunting, slashed my expenses down to bare bones, and so on. But even with finding a job almost immediately, I was out of work for about a month (hiring lead time for paperwork, etc.) and in just that time what little savings I’d managed to put together after buying my place, plus my unemployment, had all disappeared–gone to pay the mortgage and other bills, and I was two grand in debt on my CC (for unexpected car repairs).

    Facing the prospect of paying two mortgages on no income scared the heck out of me. After I got back on my feet with the new job, I started reading and saving up again–but this time I made sure I knew what I was saving up for! And I still have a long ways to go, but I feel a lot better now knowing that should the same thing ever happen again, at least I’m better prepared.

  36. Both great stories! I had a huge turning point about “Stuff” after spending a weekend cleaning out my grandmother’s home after she passed away. I truly, viscerally (and physically — we all got sick from all the dust in that house) *got* that each person’s Stuff is just Stuff, and once we pass – pphhhooot, nobody else cares a whit about almost all of it. It has really affected what I buy and what I keep.

    Had another one a couple of years ago about saving after I had to save and panic for two months for a huge tax bill (due, of course, to earning more money! Where does it go?). Now we save 25% of every self-employment check for taxes, and I save about 18% of all our net income — some for emergencies, some for known future expenses (from Christmas to summer camp to my daughter’s tuition).

    And, I think because of these baby steps, I recently had a realization about retirement similar to your friend’s — every dime I can save for retirement brings me more time NOT to work. Still working on making a plan from that knowledge.

  37. I’m experiencing a turning point now. I can’t and will not continue to scramble for a dollar. I’m paying off my debt. Thank God it isn’t huge and welcoming financial freedom. Great story!

  38. My turnaround came about a year after my boyfriend and I rented our first place together. I had always saved money and like Hope (#38), I always saved money I just had to have a reason to save (down payment on car, books and tuition, vacations, concerts,etc…)So I always paid cash and was never in debt. But one day we were talking and he mentioned, don’t you want a house one day? And at that moment buying a house seemed so far away, but then it hit me like a truck, it might be far off but its a HUGE purchase. So the next day I created a plan and 4 years later we got engaged and bought our dream house with $60,000 down. We were able to afford our dream house because of that money we saved. But then throughout the years of saving we have learned so much more about money and life. There truly does need to be a balance. And I believe we have found it. Hopefully in the next few years little ones will come and since we have planned it from the beginning, I’m hoping to stay home and take care of them while not changing our lifestyle all that much besides what the kids bring anyway 🙂

  39. Love these stories. Interesting to see what others have to say. My own personal turning point was when I was leaving a friends house and I needed to fill the gas tank. I whipped out my credit card and they declined the $15 charge. I then proceeded to the next credit card that was declined too. I luckily had a card from my employer that I was to use for business only, but it was my last resort.

    That was definitely a wake up call. Over the next week I went through and totaled all my card balances and put them on paper. I was shocked to see that I owed over $9000. I organized them by interest rate and started the long arduous task of getting out of debt. I figured at my current state it would take 4 years to get out. At first this was an incredibly difficult undertaking, but with some hard work and dedication I managed to pay off the last of the credit cards in just over 2 years. After a few months of paying down the cards I found I was having fun watching the balances decline. I had cut many expenses from my life and I was enjoying watching the monthly task of watching balances disappear. I had also set up automatic savings that I could watch grow.

    That was back in 1998. Since then I have gotten married and maintained the same values. My wife and I are both savers and pay off our rewards credit card every month. We do take on some debt occasionally for a car or home improvement, but those loans have all been paid early.

    Thanks for having this blog JD.

  40. Hello,

    I am currently living in the US, but I am originally from Jordan ( in the middle east ). I come from a middle class family, and we have never been rich.

    I would like to point out that I find it very surprising ( and a bit amusing ) when I hear my American friends brag about how they “now have started to pay for everything in cash”! The concept of acquiring something before paying for it is soo alien to people from my country, and I really cannot understand it. I have been living in the US for 4 years now, and I have only taken out a loan on my used car, but it was a secure loan ( as I have put the same amount of money in a CD with the bank ) because I did not have a credit history. I don’t have a credit card, and I never really needed one.

    I don’t live an extra frugal life, I just make sure that I spend less than I make, and I never use credit cards, EVER!!

  41. Mind you, there is something called “quality of life”. If I was to save all my money and not spending it on things now (when I’m young) — what’s the point of being old and rich and can’t do the things I’d like to be able to do with it.

    I tend to ask myself what use will I get out of this stuff, if it’s not going to get used much, then I don’t bother.