What Got You to Get Better? Reasons for Change

Let's face it: Most of us weren't born eager to delay gratification, invest in IRAs, diversify our assets, and give a hoot about personal finances whatsoever. If you told me back in high school that I was going to be a financial writer, I would have laughed with gusto and perhaps a little dread. (I get the same reaction nowadays when I tell people that back in high school, I wanted to be a priest.)

However, something happened to you, and you decided to take control. Otherwise, why would you be reading this website (other than a weird obsession with turtle logos)?

For me, it was being a teacher making $20,000 a year while living in Washington, D.C. (No, this wasn't the 1970s, but the mid-1990s.) And I knew I had to be smart with every penny. I checked out books like Personal Finance for Dummies from the library, and a whole new world opened up. I asked myself again and again, “Why didn't anyone teach me this stuff?!”

So that's my story. What's yours? What got you to change? I'm really curious, because I think identifying those motivators/triggers/kick-in-the-butters (whatever you want to call them) is key to getting more people to take their personal finances seriously.

Not that I don't have some ideas. Last year, we solicited ideas from the readers of our Rule Your Retirement service. Several of their responses are below, grouped according to a general principle behind their transformations. (As is Motley Fool custom, I've used their discussion board nicknames rather than their real names.) See if you don't recognize yourself in some of their stories.

Contemplation
Sometimes just thinking about the future will get someone to change. That's what happened to RnRretirerican. She wrote:

One day you're hurtling along the madness that is the everyday, and something happens that makes you slow down a little — read the fine print, breathe deeply, and wonder about it all. For me, it was the realization that although being a parent is my proudest achievement to date, one day it will be just my husband and me at home. We had spent years … ensuring that the futures of our children would be bright, but what about our future?

So RnRretirerican began educating herself about investing. Her husband had handled most of the investment decisions up until then, but a demanding job limited his time. The result: “I decided that I could help do the investigating and that together … we could make our retirement stellar, rather than stale.”

Pain or Despair
Unfortunately, a really bad experience is perhaps the number one reason people change course. Often that experience involves a “financial advisor” who is really just a salesperson. Fool reader Scottyzee wrote: “We decided to put our money in the hands of professionals. … This leading brokerage firm lost it all. … Now I do my own research and make my own decisions and sleep a little better at night.”

Even hiring friends doesn't always work out, as pepperidgetrln found out. She was “panicked” about what to do with an old 401(k). A friend's husband offered to help.

“I figured he really must be doing me a favor as he was used to dealing with much larger accounts,” she wrote. “So, I invested in whatever he recommended and was grateful for what I considered the ‘free' advice.” Of course, the advice wasn't really free — the costs were just buried. “The mutual funds he recommended were all high-fee, actively managed funds with loads. I think some even charged 12b-1 fees!” (A 12b-1 fee is an annual marketing fee added to the cost of owning a mutual fund.)

Of course, pepperidgeltrln was probably correct in assuming that her advisor friend was used to dealing with large accounts; many advisors require high minimum investments. F4Phanatic's advisor required at least $80,000. He decided to hire the advisor, but also manage some of the money himself. “My financial advisor is still the same guy,” he writes. “I rub it in about how I'm beating his performance.”

Not that getting a financial advisor is a bad thing. Just make sure you get the right one. Start by checking out the Garrett Planning Network, an international group of fee-only planners.

Belief That Change Is Possible
Reader smoothk came to The Motley Fool a decade ago, ready and raring to buy stocks. But after reading the personal finance area of the site, he realized he first had to eliminate his tens of thousands of dollars in credit card debt. “It was then that I became dedicated — no, committed — to eliminating my debt and never getting in debt again,” he wrote. “That was my one and only financial goal.”

He and his wife are now debt-free except for a mortgage, their cars are paid for, they've opened college savings accounts for their kids, and smoothk is contributing 6% to his 401(k). “It has taken us about 10 years to reach this point. Actually, that's far less than originally planned because every bit of extra money we could muster to pay off that debt load was used! We are so glad we did!”

Dedication to Action
For Darwood11, the painful event that prompted his turnaround was a divorce. “Nearly broke and facing bankruptcy,” he writes, “I started over.” He began his self-education by reading all he could about retirement planning, then inputting his numbers in worksheets and financial calculators.

“It had taken me about 35 years to get to that place in my circuitous financial planning journey,” he wrote. “However, something reached critical mass and within two years I had created and implemented a completely new plan that incorporated better funds, substantially better asset allocation, some dividend-paying stocks, an emergency fund, and a CD ladder.”

What About You?
So go ahead. Tell your story in the “comments” box below, and give us your theory on what would get more people to get their acts together. I'll summarize the results in my next GRS missive.

More about...Psychology, Planning, Retirement

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Nancy L.
Nancy L.
11 years ago

If you’re only talking in a financial sense, for me there was a “rock bottom” moment. For years I’d kept just enough of a handle on my finances that I felt in control, despite the fact that I was stupidly carrying cc debt. But one day I made a mistake in calculating my balance, and hit my limit. The card was denied, and I felt mortified. Pretty much all the positive changes that I’ve made, from working to eliminate the debt to educating myself by reading PF blogs traces back to that moment. But in other aspects of my life,… Read more »

Cara
Cara
11 years ago

For me, my light-bulb moment was the second day on my very first job as a lawyer. I despised everything about it and knew I had to find a way to get out. I was only 24, but I soon learned enough to use that big salary to max out all my retirement accounts, save an extra 30% on top of that, and pay off my student loans in 5 years. I’m in good shape to cut the cord soon, and I’m thrilled that I learned about personal finance so early.

Scott
Scott
11 years ago

My moment came while reading Total Money Makeover. I was serving in the military making barely any money with a c.c. balance and large car payment. I poured through that book in a day and started on our journey to debt freedom. Except for the mortgage, we have been debt free for two years and loving every minute of it.

Foxie@CarsxGirl
11 years ago

To be honest, I just kinda fell into the whole finance thing, never really thinking too much about it… And now I’m a Finance major, looking to become a CFP myself. 🙂 I would have never, ever thought it was something I would do, let alone enjoy… But the planning and the goal setting, and the eventual sense of accomplishment and achievement, have become so ingrained in me that I’d love to help other people live their dreams too! While I’m not *entirely* living my dream life, we do have a wonderful project car we wouldn’t have been able to… Read more »

Chris Gammell
Chris Gammell
11 years ago

I was in the same boat as Cara above. I was working a job that paid well out of school but didn’t particularly enjoy it. I was lured by the prospect of a fat investment account, thinking that would throw off extra cash (I hadn’t yet learned of tax incentives). I also figured that since I had read some stuff online about how to invest I was invincible. I sagely invested my first chunk of money in 2006 when the market began the eventual slide down to the bottom. As I saw my money slip away I realized I better… Read more »

Michael
Michael
11 years ago

For me, it was meeting the woman of my dreams and getting married. With that came the responsibility of providing for her – it wasn’t just MY needs, but hers too.

The thought of putting her future in jeopardy due to my lack of planning and thought was too much, so I made a plan to educate myself.

Kevin
Kevin
11 years ago

“Not that getting a financial advisor is a bad thing. Just make sure you get the right one. Start by checking out the Garrett Planning Network, an international group of fee-only planners.” Whoa whoa whoa, hang on a second here. You are doing a MAJOR disservice to your readers by blurring the line between “financial advisor” and “financial planner.” They are two COMPLETELY different things, yet in this sentence, you imply that they’re the same. They most definitely are not. A “financial advisor” is the friendly guy who will meet with you for free, in your own home, whenever it’s… Read more »

SF_UK
SF_UK
11 years ago

Honestly? I don’t know. I guess I’m luckier than a lot of people here – my parents instilled me with a lot of sound financial sense and it actually stuck. I think a lot of it comes from having a lot of responsibility at an early age (I was helping to run the house for months at a time at age seven when my mother was stuck in hospital with my severely ill bro). I also think that it’s my stubborn streak though. I know that my parents could (and would) help me out if I got into money trouble.… Read more »

obsoletest
obsoletest
11 years ago

Divorce. Lost all my money and stuff and got custody of three kids (complicated story). Luckily I have always been averse to debt unless it’s a matter of survival (couldn’t say the same for former spouse), and I had a decent-paying job with benefits. I had to learn a lot and learn it fast to get back on my feet. It took a few years, but it was worth the struggle, and now things just keep getting better.

The Beagle
The Beagle
11 years ago

I third Cara’s post. Throughout university, I had some money from an inheritance that got me through my studies. Then I graduated into a 60+ hours job (also as a lawyer). Even though it came with a very good salary, I realized that I would have to work very hard for that salary, and that the days of sleeping in on a weekday, scheduling lectures to have a long weekend, etc. were over. I read everything on personal finance I could find, from the Millionaire Next Door, Your Money or Your Life, the Tightwad Gazette, and this blog and made… Read more »

jessieimproved
jessieimproved
11 years ago

For us it is the imminent arrival of our first child. Suddenly everything that we though was so important is starting to fade. Now, we’re trying to make sure we can provide for a child and for ourselves when we’re older. It’s not just about the two of us anymore.

Kate
Kate
11 years ago

I got engaged and started thinking about my long-term future seriously for the first time. I had a graduate degree that wracked up some serious student loans and when we moved in together increased my credit card debt with some dumb purchases. My “Aha” moment came when I played with a debt to income calculator to determine if we could qualify for a mortgage. And we couldn’t. Suddenly I realized that all these dreams that I had – having a family, buying a home, buying a vacation home – were not possible with my debt and I kicked into action.… Read more »

Tyler@FrugallyGreen
11 years ago

All it took for me was making one long term goal, doing some quick math, and realizing that if I didn’t change SOMETHING, I was NEVER going to get there. I never had a problem with debt. I never spent more than I earned, and I didn’t buy a lot of useless stuff, but I had a few hobbies that I would fritter my money away on to support. Once I realized I had goals beyond next month, the idea of planning became a bit more important and the planning lead to the realization that I could not remain on… Read more »

Paul in cAshburn
Paul in cAshburn
11 years ago

JD, like you, my epiphany came when I was making less than $30k per year in the 1990s and I thought to myself that I could do better (based on those around me making twice what I was making because they had college degrees). I continued working full-time and went back to school full time for the next six years, finishing a BS, and two MS degrees. The salary went up by only $20k at first, but then exploded as I worked and gained experience at the higher level job the degrees qualified me for. Now I’m debt-free (other than… Read more »

Amy
Amy
11 years ago

For me it was throwing off the idea I had picked up growing up, which I will summerize as ‘poorliness is next to godliness’ and ‘I have money (for the first time in my life!), I should be able to afford this’. I had (and still have) a great paying job right out of college, but I was living pay check to pay check with a house loan, car loan, student loan and CC balance I was struggling more and more to pay off every month. All the worrying over how to make the ends meet led me to realize… Read more »

fern
fern
11 years ago

I never married, so being a single female, it has always been quite clear that I am solely responsible for my financial wellbeing.

I always earned a living as a writer, but i credit my first job writing for a mutual fund wholesaler with really solidifying for me the importance of retirement planning.

Linear Girl
Linear Girl
11 years ago

I worked at a credit union in college and we had tables showing the time value of money to encourage customers to invest in retirement accounts. The tables compared how much money you’d have if you invested $1,000 every year for 40 years to what you’d have if you invested $2,000 for 20 years and other scenarios. Seeing those made it obvious why I should start saving as early as possible in a way that my Dad’s lectures on savings never did. I also got to play with early software (this was the late 1980s) for loan amortization and interest… Read more »

Shogun @ Financial Samurai
Shogun @ Financial Samurai
11 years ago

If you think about it, one of the BEST EVENTS to change people’s financial habits is the stock market meltdown, and real estate collapse over the past 18 months! Only through getting obliterated due people understand their own RISK. The nation’s savings rate is now positive for the first time in a long while. Poorer people aren’t buying real estate with no money down anymore, esp if there’s no money in the bank. Lending by banks is more responsible, and all the good is returning. My ‘aha’ moment was when I finally breached 7 figures in my bank account just… Read more »

Jean
Jean
11 years ago

When I finished school, having taken out student loans and a car loan and many times used my credit card to pay the rent, I cobbled together two or three jobs that more or less pointed me toward the sort of career I wanted (teacher, writer, editor, etc.). Those years were financially mindless: I wasn’t making a lot of money, expenses were high, and I continued to get into and out of credit card debt without too much thought. My annual income was pretty unstable, but I managed to keep a roof over my head, make my monthly loan payments,… Read more »

Aaron
Aaron
11 years ago

I had been taught wise money stewardship during my first few years of college by a good friend and mentor. His best advice was “for two years after college, live like a pauper. Pretend you are still on a college budget, and save 1/2 to 2/3 of your income.” Since he was addressing co-eds, this was appropriate advice. Well, my moment was a culmination of the first year out of college. I am a software engineer and make pretty good pay, but we were living paycheck to paycheck anyway. We bought a car (MINI Cooper, no less), and started buying… Read more »

Jennifer Thompson
Jennifer Thompson
11 years ago

Though I don’t have any debt aside from my mortgage and $3,500 on my car, that’s only because I cut up my credit card. I’ve been as deep as $25,000 in debt plus $40,000 in student loans and a $16,000 car loan. An inheritance cleared it all — barely — and made me realize that I needed to shape up. And yet I couldn’t, and still struggle. The latest (and I hope last) wake-up call for me was having a slow leak in one of my tires and no money to replace it. I commute to work every day on… Read more »

Dana
Dana
11 years ago

I finally woke up to taking responsibility for my finances when two husbands (yes, two!) both screwed up bad and destroyed my credit. One let our house go into foreclosure after not paying the mortgage for 6 months without telling me (this was after the divorce) and it was I who had to find the lawyer (from out of state) and make all the arrangements for the bank to take the house back “in leiu of foreclosure” (which still mars the credit report.) Then hubbie #2 (who is also now an ex) blew his credit up and because we were… Read more »

Iain
Iain
11 years ago

I’m about to be a father. We need to move out of the one bedroom co-op. The cost of a new home with more rooms means moving further from my job, and a longer commute means less family time. We have a lot of debt (school loans, mortgage, home equity loan) and we live hand to mouth. If we throw another life form into the mix it becomes even harder. My uncle raised three kids, sent them all to college, bought a house, and retired comfortably after a career as a technician with a telephone company. I know there’s a… Read more »

Trevor
Trevor
11 years ago

My reason was my fiance. Prior to getting engaged I was a bit of a financial mess. No investments, minimal cash reserves, a maxed out credit card around $12K and over $50K in debt from school. I had no control over my spending, and in fact had no idea where I spent my money on a daily, weekly, or monthly basis. When we got engaged we came up with a plan to get my spending under control and my debt paid down. Well, that didn’t go well. My rock bottom came in the car, on the highway, when my fiance… Read more »

Meghan
Meghan
11 years ago

For me it was a large pay increase. I’ve been a broke student every since I graduated from high school working my way through two bachelor’s degrees and a master’s degree. When I started my PhD last year I was awarded a very generous three-year fellowship. I’ve always been pretty good with money, no cc debt, and I could save up for short-term goals. But I had no money saved for the long-term. I realized that I didn’t want to waste this extra money on things that didn’t matter (what I now know is lifestyle inflation). I needed some sort… Read more »

Maya
Maya
11 years ago

I remember that day like it was yesterday – For me the turning point was when my son was born. I had to take him to the emergency room in the middle of the night and could not even pay the $100.00 co-pay for the emergency room visit. I had to give them a post dated check. Since then I decided, that would never happen to me again. I had to have a plan and I did. Today am happy to state that I have paid off my cc debt over a period of 2 years (my son is now… Read more »

Sarah
Sarah
11 years ago

I graduated from grad school with lots of debt but also, for the first time ever, a well-paying job. Finally I felt like I was in a stable state and could stop living paycheck to paycheck. So now I’m determined: I want to pay off my debt ASAP, save like a maniac for the future, and live reasonably.

trb
trb
11 years ago

After grad school, the wedding, and a move to DC, we were making more money than we ever dreamed (75k combined), enjoying our apartment and the city life. And going deeper into debt every month. How was that possible? That led to some sleepless nights, during one of which I google searched for financial awareness tools or something and found GRS, Total Money Makeover, etc. Thus began my education. Your Money or Your Life was the big smack in the face for me. I realized that we had no idea where our money was going and started tracking it, then… Read more »

Terry
Terry
11 years ago

One word: widowhood.

Nicki
Nicki
11 years ago

When starting undergrad I had some money saved up, some scholarships, and limited assistance from my parents. I felt so overwhelmed with the new experiences of college that I didn’t want to have to undertake trying to understand all the implications of different student loan options. At that point I decided it would just be easier to manage my existing money, work during the year & summers, and continue to apply for more scholarships. I came close to having no money a few times at the beginning of a spring semester (after paying for tuition) but I knew if I… Read more »

Craig
Craig
11 years ago

I don’t have any story but the idea of being financially independent on my own for my first time and listening to stories of those who have been through my situation just hit me and made me think big picture. With no debt I have become very alert with saving in a Roth IRA and having a general mutual fund for 10+ years when I will need it more.

Diasdiem
Diasdiem
11 years ago

For me, it was when my truck finally died and I had to get a new car. Starting college, I had about $40,000 from my years raising hogs in 4-H. My college was all paid for by my parents and grandmother. 6 years, a BS and Master’s degree later, I had maybe $10,000. My rent, food, utilities during that time had all been paid for by my parents, as well as clothing (I didn’t spend much), and all the other stuff like movies, video games, computer equipment, bars, and such were paid by me. That’s where my money went. My… Read more »

Todd @ Personal Finance Playbook
Todd @ Personal Finance Playbook
11 years ago

I think I’ve sort of always been interested in personal finance. When I was growing up, my grandpa (who was someone I admired very much), had his own business. It was pretty successful (asphalt company, in business for 26 years, then sold for a fair amount), and he was a pretty frugal guy, for a lot of reasons I guess. He grew up during the great depression and had values that didn’t change with time. When people would say, your grandpa is so thrifty, or something of that nature, it made me curious about why. He was a quiet guy,… Read more »

Kevin M
Kevin M
11 years ago

My “wake-up” was about 5 years after starting my career. My wife at the time (ex-wife now) and I were arguing about money, we did this often. I think one month we had a really high credit card bill or something. I realized at that point we both had good jobs but were living paycheck to paycheck. After 5 years of working, I had basically nothing but a few grand in my 401(k) to show for it. I wanted to sell the house, pay off our debts and start over. She didn’t. We ended up getting divorced a short time… Read more »

The Non-Student
The Non-Student
11 years ago

I had my wake up call early in my life when my mom was divorced by my father. She entered the marriage at a young age and focused her energies on motherhood (work that is completely undervalued!). When she was divorced, she was left with nothing and basically had to start her life over again. That taught me to be a financially independent woman. I always pay myself first and invest in my IRA religiously. I do as much financial reading as I can, and try to be proactive. My partner and I talk about finances and saving for long-term… Read more »

Austin
Austin
11 years ago

I like turtles! 🙂

My cousin (who now works for Goldman Sachs 0_0) pointed me in the right direction by advising me to approach all financial matters with some skepticism and recommended a couple books about investing.

Shane
Shane
11 years ago

I’ve paid my own way since turning 18, and had been struggling financially through college. I racked up credit card debt and medical expenses due to being laid off twice after starting fresh in the IT field (Due to company cutbacks). At 21, I found a great paying salary IT job with benefits, all without even having my degree yet. However, my spending inflated, and I was stuck in the same boat. After a little over a half year, beginning 2009, I realized that I wasn’t getting anywhere. I had always somewhat expected someone to assist me through the tough… Read more »

Tom
Tom
11 years ago

A mentor. An ex-boss with whom I still kept in contact said to me, “Thomas, you need to start thinking about these things.” The “you’re-not-getting-any-younger” speech also helped. I just wish he had been around to give the “you-need-to-start-while-your-young” speech.

He had a financial advisor he’d been using for years and was very happy with. I went to see her, and wow, what a difference that first year made just to have someone to guide me and to report to on occasion.

Jason B
Jason B
11 years ago

The more I used computers, the more I would try to get rid of paper. I went to so far as to take all my credit card statements and enter the monthly balances, finance charges and payments into Excel. As I looked back over the previous years, with finance charges totaling thousands of dollars, I suddenly felt very foolish and wasteful! Why was I wasting all this money on high interest credit cards? So the very next step was to figure out which order to pay them off in… debt snowball or highest interest first. I created a new spreadsheet… Read more »

Shane
Shane
11 years ago

@Jason B

Nice job! A half million in principle savings alone by 60! That will be incredible!

Shalom
Shalom
11 years ago

Thanks for this topic! Everyone’s comments are itneresting and informative.

Shara
Shara
11 years ago

I would be on a good path anyway because that is just me, but watching my mom struggle through graduate school was formative. I didn’t ever want to have my life choices limited because there wasn’t enough money in the bank. But an event where my views were solidified was when I was 12-14. My sister, who is bipolar, turned 18 and my mom struggled to get her living as independently as possible and I realized it would never 100% happen. I realized odds were that when my mom died I would be responsible for making up the difference between… Read more »

Susanne
Susanne
11 years ago

In the same year- a divorce and an Autism diagnosis for my son. These events left me in a panic- the same bills with half the income. But, you wouldn’t believe the blessings that have come to pass since. Within the year, I: finished my Master’s, which resulted in a raise, paid off my car, realized my salary was not reflecting my teaching experience from another state- another raise, and saved $1000 (baby step #1). I’ve been able to tithe and help other people going through other difficult situations. Now, I’m paying off credit cards and ALMOST have an entire… Read more »

partgypsy
partgypsy
11 years ago

First, I was going to say I have always been this way (even with junior and highschool jobs I saved my money) but I realize what it really was that made me the way I am. When I was a senior in college my father’s businesses failed (actually it was 2 failures and last straw the 3rd business he invested in the investors ran off with over 100K of money). In addition my parents started divorce proceedings. Instead of money in the bank our family was now hundreds of thousands of dollars in debt. My little brother was a senior… Read more »

Tyler Karaszewski
Tyler Karaszewski
11 years ago

My story is a story we’ve heard many times before, from J.D. and many others. I racked up some $25k or so in credit card debt, and finally hit rock bottom when I realized my income could no longer cover both my credit card bills and rent. That’s when I started turning around. I still don’t believe in “delayed gratification” though. I set my goals, and then I meet them as soon as possible, not as late as possible. This doesn’t mean I’ll go into debt to meet them, but I’d rather have a lifetime full of experiences and a… Read more »

TosaJen
TosaJen
11 years ago

My brain change: surviving my first rounds of layoffs (I’m in software R&D), having DH get laid off when we didn’t have much savings, and reading Your Money or Your Life (Joe Dominguez and Vicki Robin) for the first time. I found that I really hated feeling like my entire way of life is at risk because my employer isn’t doing well. I also fell in love with the idea of financial independence. DH took a little while, but he bought into the idea with me. The second time DH got laid off, we were much better positioned. I remember… Read more »

Bill
Bill
11 years ago

I was sitting in my high school algebra class and Mr. Weiss was teaching us about compounding interest. Once I got a handle on the math I started crunching numbers, immediately noticing a huge difference between investing at 20 and 25. I realized then that I could not wait, I needed to start then and there, or I would be “throwing” money away. I have been making a full contribution to my Roth ever since I was 19.

casey
casey
11 years ago

My moment came one night during a discussion with my soon-to-be-hubby. We were talking about money and he admitted that he had some problems with bills and some debt out there. “Some” turned out to be quite a bit and I decided that I would take over the finances for us. It took several months of online caluculators and reading every budget/finance article I could find to finally come up with a plan. 8 years of marriage, 2 kids and numerous money discussions later we’ve paid off his debt and our working on paying off student loans and mortgage as… Read more »

Nancy L.
Nancy L.
11 years ago

Tyler, I think you and I have similar outlooks. I think I originally was turned off by PF because I felt that experiences could be just as, if not more rewarding, than having a large savings account. Lately I’ve come to recognize that keeping my finances in order eventually frees me to experience MORE because I’m not tying up so much of my money paying finance charges and because I’m not as chained to a particular job or salary.

Caitlin
Caitlin
11 years ago

My reason was my cat. In early 2007 she was very very sick, and we were poor recently ex-students. My husband and I both had school debt, but I also had a bunch of frivolous debt caused by buying things I really didn’t need, while at school, and after I graduated because I “deserved” them. The cat ended up needing fairly major surgery (she had a tumour in her stomach), and after calling Visa and MasterCard, begging for my CC limit to be raised (since of course, they were maxed out) and being turned down, I decided I needed to… Read more »

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