When Did You Start Caring About Your Finances?

Cap at Stop Buying Crap recently asked: “When did you start caring about your finances?” This is an interesting question. I've always believed that my finances were important to me, but I never actually acted on this belief until a few years ago.

My parents set poor examples for managing money. In high school, I ignored the mandatory personal finance class. When I was offered credit cards in college, I signed up, and I used them, and began a lifestyle of debt. For the first few months after college, I was in a lousy job, and felt lucky to have a credit card with a $10,000 limit. I maxed it out buying clothes and paying for hotels and taking cash advances for living expenses. I bought a new car.

By the mid-nineties I was deep in debt, but I didn't have the discipline to stop myself. I paid minimum payments. When my credit limits were raised (always a joyous day), I viewed it as a license to spend. In 1995 I got a $5,000 windfall. Rather than pay off my credit card debt — which had swelled to $20,000 — I bought a new Macintosh Performa 640CD DOS-compatible personal computer and loads of games to go along with it. I bought new clothes.

This whole time, of course, I felt lost. I knew I was in debt, but I didn't know how to escape it. The only thing I seemed to be able to do was spend. I was very good at spending. I fantasized that I could quit my job, take the money from my retirement plan (less taxes and penalties, of course), and pay off my debt. I fantasized that we could sell the house and I could use some of the equity to pay off my debt. I fantasized about get rich quick schemes.

I began to make small steps toward taking responsibility for my money around my 30th birthday. The interest rates on my credit cards were killing me. One day my bank sent a mailer advertising home equity loans. I'd never heard of these before, but a little research convinced me to try one. I cut up my credit cards. I moved all of my credit card debt to home equity. I cancelled the credit card accounts. I haven't had a personal credit card since.

This stopped the flood. I no longer acquired new debt. But I wasn't doing anything to eliminate the old debt. I spent everything I earned. I was living paycheck-to-paycheck. It was going to take until 2013 to pay off my home equity loan.

A couple years passed. In the winter of 2004, two things happened that changed the course of my life. They seemed small at the time, but in retrospect they were the sorts of things that move mountains.

First, a friend who had heard me moaning about my debt asked me to lunch. He told me about a book he had read that helped him gain control of his finances. “I'll send you a copy,” he said. A few days later, Your Money or Your Life appeared in the mail. But I didn't read it.

A few weeks later, another friend listened to me complain about my debt. “J.D.,” she said, “I have just the book for you.” She handed me a copy of Dave Ramsey's The Total Money Makeover. “Read this,” she said. “I think it'll help you.” I didn't read that book, either.

We moved to a new house in 2004, and the financial obligations were overwhelming. Our mortgage was higher. The upkeep was higher. Plus we were putting away money for a remodeling project. I felt broke. I was making $50,000 a year, but felt penniless. I still had a $21,000 home equity loan on which I was making interest-only payments. I felt oppressed.

It was during the spring of 2005 that I actually began to care about my peronal finances (instead of just believing I cared). I was 36 years old. I picked up The Total Money Makeover and I read it cover-to-cover. A lot of the information didn't apply to me, but the core ideas were revolutionary. An emergency fund! Pay the smallest balance debts first! Live debt-free!

I picked up Your Money or Your Life and read it on a Sunday afternoon. This book made even more sense to me: Time is money; if you can develop enough passive income, you can become financially independent; frugality can go hand-in-hand with making more money; simple living is an option.

April of 2005 was the turning point for me. It was during that month that I began to care about my finances. Now I have an emergency fund, my debt is almost eliminated, and I've begun to make money writing. By following the advice in these books, I've been able to turn my life around.

Did you have a specific turning point? Or have you always been aware of your finances?

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Mike
Mike
13 years ago

The turning point for me was when I graduated from college. Although I worked all through school, I was still strongly supported by my parents financially. It wasn’t until I graduated and started my first “real job” that I realized that all the responsbility was on me from there on out. It was pretty eye-opening to go from being heavily subsidized to having to figure out how I was going to be insured, how I was going to pay my electric bill, and what FICA taxes are.

eyeman
eyeman
13 years ago

I found Dave Ramsey’s podcast in July 2005 and I got my family on his plan.

Since then I have paid off nearly 60K of debt (car loans, personal loans, student debt, and a 2nd mortgage). My wife has been able to quit her job to stay at home with our 4 month old daughter.

At 32 now, I am saving a good chunk for retirement and I very happy to have awoken from my financial slumber.

DC Economist
DC Economist
13 years ago

I started to somewhat care after college, as I began putting money into a 401K. My parents had been good role models, financially. They had a comfortable house, saved alot, and lived within their means. My father, making a middle-class salary, and upper-class savings. I learned alot from my grandfather, who read the WSJ every day and taught be about the stock market. I really started to care about my finances after I completed graduate school. Until then, I had been too poor to sock away anything resembling 10% of gross. I finished school without debt, and immediatly saw my… Read more »

joshuat
joshuat
13 years ago

When I got married, March 2004, I started caring a bit more than I was. Then my wife and I read Dave’s Total Money Makeover around August 2004, and it was ON.

Russell
Russell
13 years ago

When my wife became pregnant with our first child. We wanted her to stay at home with the baby once it was born, and we now save more for retirement and college than we were when both of us were working.

Z
Z
13 years ago

Great story J.D. At least you have (or will have) a happy ending. I’m 26, and I’ve spent most of my college years (’99-’05) being very frugal and responsible for obvious reasons. When I graduated and finally got a job (earning $60k), I started to become very careless with my new found sum of money. Going out a lot, and buying juices every day was costing me a handful of benjamins every month. Luckily for me, I discovered sites like Ramit’s and yours in early ’06, so my spending immediately changed. Right now, I’m sitting on a $30k emergency fund… Read more »

j&w
j&w
13 years ago

When I bought a house. I’ve never had debt issues (I’m a city gal who’s never owned a car, and I’m Irish so university fees were paid by the taxpayers) but never gave a damn about organizing or planning any of my finances. Owing the bank the guts of $300,000 made a light bulb go off and, thanks to sites like this, I’m learning rapidly.

j&w
j&w
13 years ago

Congrats on the engagement z!

Z
Z
13 years ago

@j&w

Hey thanks! I’m just now worried about the cost of the $30k wedding. Good bye emergency fund.

Hey guys, where are the articles on how to minimize wedding costs? =]

Kathy
Kathy
13 years ago

I think there really is a “frugal” gene, and I inherited it. In my family, even the poorest paid cousin saved her money and paid cash for her first vehicle. We are not a wealthy family, maybe lower middle class or even somewhat poor. But you will never see us in debt. What so many people seem to be getting a revelation about nowadays, always seemed to be horse sense to me. I think the importance of money really hit home to me when I left home, though. I saw for myself that the world was divided into two kinds… Read more »

Snarla
Snarla
13 years ago

Not to be too much of a brown-noser but I started caring about my finances about the time I found the link to your blog. Before that I knew I needed to do *something* but everything seemed so daunting and the various books on finance so boring. I felt everything I ever read about personal finance was aimed at old white men who were already rich, not me. Having it broken up into easy-to-understand, manageable, dare I say “fun” bits really helped me.

Scarfish
Scarfish
13 years ago

I’ve sort of always been aware. My mom used to listen to Dave Ramsey when picking all of us kids up from school, so I’ve been hearing his “no debt” mantra since before I ever had a job. My parents lived it, as well, and put me through college with cash so that I don’t have student loans. I was able to move to New York City immediately after college graduation, but I was working at Starbucks and trying to pay rent that was almost double my parents’ mortgage payment. I still manage to go to Europe that summer (for… Read more »

Joanna
Joanna
13 years ago

During college, my future husband and I got engaged (and subsequently married two weeks after graduation). I came from a home with plenty of money, managed responsibly, and he came from a home where ends didn’t always meet, and his family did what they had to do to get by. Different ends of the spectrum. We knew we had to talk about finances and get on the same page before we started marriage if our finances (and life together!) were going to work out. Since then (we got married this summer), we got one of Dave Ramsey’s books and have… Read more »

Mark
Mark
13 years ago

I’ve cared about my finances since I was a little kid, there never was a turning point. Every birthday and Christmas I would go to the bank and deposit my money. When I got a job as a teenager my money went to savings for college. When did I start caring about retirement, paying attention to inflation, and looking closer at interest rates? That would be this year at age 25, when I got my first good job that offers an excellent retirement package.

limeade
limeade
13 years ago

My parents never really had a lot of money and we kids knew it. I knew that I didn’t want to live that way and began mowing lawns with my older brother at about age 14. Since then, I’ve pretty much been on my own financially. Paid for college myself (with the help of some aid and student loans). Now that I’m an “adult” I’ve also set the goal to retire my parents. Not necessarily by giving them all sorts of money, but by helping them make wise financial decisions. I’ve already got them out of debt (to the tune… Read more »

Jenny
Jenny
13 years ago

Z, you might try the forums on indiebride.com. It’s more oriented towards adding individuality to weddings than to saving money, but there are big sections devoted to cheaper alternatives, DIY, etc. It would help a lot if you’re not decided on a big, “traditional” wedding. Regarding finances, I’ve always been concerned about money–I think because my parents started out very poor. So I’ve always had an eye on savings and earning money for purchases before making the purchases, but I didn’t start thinking about actual investing until my fiance and I started talking about kids and retirement and him going… Read more »

Sam
Sam
13 years ago

I’ve always cared about my finances but only recently started to control my money. My husband and I decided to get serious about paying down debt, budgeting and “living like no one else” 01/01/07. The funny thing is, I was shopping for a new car (debt) when I came across Dave Ramsey’s name (I was trying to buy a new car without incurring a new car payment). I picked up Total Money Makeover at the library and we decided to pay down our debt ($55,000, mostly from my husband’s grad. school debt) this year (2007). Probably not a surprise, I… Read more »

Sam
Sam
13 years ago

Hey Z, We just got married in Oct. 2006 and we paid for the wedding ourselves and our budget was $30,000 and we ended up spending about $35,000 (not including the honeymoon). The best decision that I made was to hire a good wedding coordinator. Yes a wedding coordinator is another expense but her fee was more than paid for by all the money she saved me. Vendors are much more likely to cut their fees for a wedding coordinator b/c they know the coordinator will send more business their way. There’s the additional plus that she did most of… Read more »

Kevin M
Kevin M
13 years ago

@Z:
$30k for a wedding? How many guests?

I got married in January and we did it all for ~$8k. You don’t need the fanciest of the fancy. You won’t see it on the wedding day anyways. You’ll be too busy being put here for photos, and there for photos, then go cut the cake… it goes by extremely fast. Don’t blow that money.

MyOwnMillions
MyOwnMillions
13 years ago

Congratulations on your engagement j&w! (I paid 10k for my engagement ring too recently!) In any case, I have always been a saver, but I was never aware of my finances until I started working and realized that I have saved quite a bit of money (you can see my March Net Worth Update here). This is all thanks to saving since my teenage years. Now I’m looking to buy a house, and it seems like I would be putting most of everything I have ever saved into it so I’m even more conscious about my saving rate, and the… Read more »

finance girl
finance girl
13 years ago

I started caring at the age of 27, when I started my SEPIRA and started paying CCs off in full every month. It adds up fast once you start, and once you actually get out of debt.

Z
Z
13 years ago

Wow, didn’t expect so many responses to my comment there. Sorry J.D. if I’m turning this “When did you start…” show to the “Help my wedding” show. Unfortunately due to circumstances our wedding has to stay fairly on the traditional side, which means lots of money to be spent. We are coming up with small subtle ideas to help minimize the costs, but there are just some costs that go with traditional weddings that won’t budge. Right now we’re estimating 200 guests, not sure if thats going to be doable with my budget. The wedding coordinator definitely sounds like good… Read more »

Dickey47
Dickey47
13 years ago

I joined the military to pay off my school debt. It really helps. I then always assumed my work might be gone the next day. Then I read Don Aslett’s books to keep from collecting crap which cost $$ and time. I still have some waste (new computer, items to help around the house but don’t work well) but I try to keep it to a minimum. My next thing is no mortgage. I wonder if having no real big debt (always have taxes, insurance, property tax) can help free me to do what I want and not stay in… Read more »

Uncommon Way to Wealth
Uncommon Way to Wealth
13 years ago

I think the turning point for me was when I got married, went back to college, and moved out of my parents’ house all at the same time. Now, I wasn’t in debt before this time, but I spent my money however I wished, without saving or investing for the future. I also spent all of my money. Fast forward just three years, and my wife and I were living by a budget, saving for retirement, building an emergency fund, and paying off the student loan that had gotten us through some tough times. My turning point was almost instantaneous,… Read more »

Criticality
Criticality
13 years ago

My turning point was when I realized that I could make a website, embed affiliated links in my stories, and live off of the commission income stream. That, and paying for links on Digg to drive traffic to the site, and I’m golden.

brad
brad
13 years ago

Wow, I blew more money on my 40th birthday bash ($1,500) than on my wedding ($400)!

As for the topic at hand, I didn’t really start caring about my finances until a friend sent me “Your Money or Your Life” and it affected me in much the same way as J.D. I won’t ever reach “FI” (financial independence) as I started too late, but still I follow many of the suggestions in that book and it has changed my life in many ways.

Angie
Angie
13 years ago

I’ve cared about finances every since I was I was a kid. My mom was a single parent and was disabled when I was an early teen. We lived on Social Security disability and money was tight. I got a paper route for money for clothes and school supplies and have worked since. I always kept myself out of financial trouble since I knew no one would bail me out if I screwed up. Only in the last few years have I had evough money that I could give thought to investing and getting ahead financially. I was in grad… Read more »

Kay
Kay
13 years ago

My caring about money came in the mid-90s when I took a night class about investing at a local community college. Before that point, I had spent the better part of a decade rebelling against my mother’s extreme frugality, equating freedom and independence with the ability to buy what I wanted whenever the whim hit me. I was merely trying to earn some credits, but what I received was a terrifying wake-up call. “I have to save *what* each month to retire at 65?! I don’t earn that much!” Now I’m in a fairly good position, but it was a… Read more »

RJ
RJ
13 years ago

My awakening to finances has been mostly gradual, as I’ve reached various career and personal milestones over the years. However, the turning point was about four years ago, when I was 36. In college and most of grad school, I didn’t accumulate much debt, and I lived rather frugally…but I didn’t save anything, either. I spent whatever I had. Unfortunately, at the end of grad school, I had to finance a couple of major job searches–airfares, photocopies, suits, job convention lodging, etc. This racked up a few thousand dollars in debt. To make things worse, in order to advance in… Read more »

Dustin
Dustin
13 years ago

When I was growing up and asked my dad if I could have some toy, he would typically respond with ‘No, do you know how long it takes me to work to make that much money?’ This thought me a lot about saving and self-motivation to spend. When I got my first job (at 15), I invested every penny. The money from my jobs through college either went to food or beer or tuition (I paid my own way). I have always been aware of my finances. In fact I feel guilty for spending and not saving. It wasn’t until… Read more »

Briana
Briana
13 years ago

I’ve never been a numbers person, and I found it all too easy to live in denial about how much credit card debt I was carrying. In college, I signed up for a bunch of credit cards, and so the total balance was distributed across them. None of them seemed so bad on their own, and I didn’t even try to add the balances together. I wouldn’t say that I spent extremely frivolously – I’ve always taken public transit rather than driving, and when I shopped, I shopped for deals – but I didn’t have a realistic picture of just… Read more »

anonymous..
anonymous..
13 years ago

this is a really DEEP question when i think about it! i have lifelong lessons about finance i think i started caring about my finances right out the gate when i was a little boy.. my grandma was an economics teacher and i used to throw pennies away because i didn’t think they were worth a lick.. i remember grandma tellin’ me to hold on to them.. “every penny counts” she said.. my grandpa made us pray the rosary every day for about half my life (before he passed).. you can imagine how boring and repetitive this was.. i used… Read more »

Tokyo Henjin
Tokyo Henjin
13 years ago

I had never been particularly good about managing my finances through school, so once I finished and got a job, I knew I had to watch out or I’d be out on the street. So I whipped up a nice little Excel sheet and started tracking my finances the day I got my first paycheck. That’s easily one of the best things I could have done–thanks to that spreadsheet (which I still use today and will continue to use in the forseeable future), I knew exactly how much money I could spend on a given day, which forced me to… Read more »

Dave
Dave
13 years ago

I’d always been semi-decent re: my finances, but I guess I became “hard-core” about doing all the right things after reading stuff like The Automatic Millionaire, The Total Money Make Over, books and articles by Ben Stein, articles by our own J.D. Roth (not to get all fanboy, but J.D. is just as great a PF writer as the other guys I’ve mentioned), many, many other sources that pretty much all say the same things as the above guys do. I’ll echo Dickey47 re: Don Aslett — he’s great; I sort of look at him as the Dave Ramsey of… Read more »

Bryan
Bryan
13 years ago

It was last year in August, 2006. I was unusually depressed about my situation in life: 28 years old(at the time), 60K per year gross salary, 100K in law school debt, 0 credit card debt, and 5K in total savings, and ~3K IRA. At this point in my life, I felt I should be much more stable financially. I was depressed that my school loans (over 1K per month in payments) would be with me for the balance of my time on earth. It was VERY depressing, to the point of near breakdown. But, I found some websites that gave… Read more »

J.D.
J.D.
13 years ago

Okay — two recommendations for Aslett’s books are enough. I’ve added them to my queue at the library.

One of the topics I had intended to write about often here was “voluntary simplicity”. The idea of having less stuff appeals to me. I can see how it would be liberating. But somehow I always acquire more stuff. And I find it difficult to let go of the stuff I already have. I need some help jump-starting this aspect of my life.

Dickey47
Dickey47
13 years ago

J.D. – if you want to simplify your life and get rid of stuff/not acquire more stuff, Aslett is your man. I think I have about 10 of his books – most excellent. He is MOTIVATING which might be what you need to jump-start.

I started with this one:
Clutter Be Gone

Hard to find now (ebay). Believe it or not, I picked it up as a lark at Borders for $6 (hardbound, 400+ pages). I started reading it and couldn’t put it down.

Dave
Dave
13 years ago

J.D. — Don Aslett has written TONS of books on junk, but the one you want is called “Clutter’s Last Stand.” It’s his biggest best seller ever, and it’s the one that started it all for him … it’s Aslett’s “Total Junk Makeover” if you will. Aslett’s other junk books are good, but they’re sorta just pale reflections of that first book.

DC Economist
DC Economist
13 years ago

Hey Z! Email me man, Im engaged and getting married this fall. We’re spending almost nothing on our wedding but most guests wont notice it.
I’ll gladly commiserate with ya too, its alot!

stephenpopick AT gmail DOT com

Dickey47
Dickey47
13 years ago

Sorry for Off-Topic message – An article on cheap weddings would be nice. I’m looking at getting married in the near future.

DC Economist
DC Economist
13 years ago

I also want to say that reading the comments here is just inspiring, really, really, inspiring. Kudos to all of you

Michael
Michael
13 years ago

The year 2000 is my personal wake-up call. I had good financial role models for parents. I always saved, drove a used car, etc. A bad marriage changed all that. We “deserved” fill-in-the-blank. I made a lot of bad choices for her that I wouldn’t make for myself. Bad wife leaves in summer of 2000, while I am in the middle of a major house rehab (living room walls down to studs). Still paying off grad school loans … lawyers are not cheap (but a sloppy divorce would have been even more expensive). In October of 2000 I got down… Read more »

anonymous..
anonymous..
13 years ago

couple of mistakes from my earlier post

*affect

11k in emergency “savings”

wish we had an edit button!

Francis
Francis
13 years ago

I started caring just right after college when I started getting calls and letters from collection agencies about my credit card debt that I ignored in college. It’s not that I didn’t care about paying off my credit cards, it’s that I just didn’t have the money to pay for them. I think it didn’t hit me what the effects are for neclecting my finances until I started thinking about wanting to save up for my home. That was when I learned about FICO scores and upon checking mine, it was depressing to see how low it was. I didn’t… Read more »

stacey
stacey
13 years ago

i don’t think that anyone has mentioned having a wake-up call that happened at their desk with the realization that they hate their job. that was mine. i worked as a film producer’s assistant for a couple of years out of college, and while i was growing gradually disgruntled at the hollywood world of lavishness, egos, etc., one incident of the all-too-usual condescension from my wannabe bigshot boss made me realize that i desperately wanted a new job – and that i needed money to make the move. i opened a “teacher fund” for 5.05% interest at hsbc and got… Read more »

Savvy Steward
Savvy Steward
13 years ago

For me it started in sophomore year of college. My old pastor led a Bible Study on budgeting and stewardship and it was a real eye-opener. He commented how most adults in the working-world never maintain a budget and how it can often catch them by surprise. I learned that even before I ever started making an income, I ought to learn how to budget and handle my finances.

db
db
13 years ago

Well there were several trigger points for me: –As a kid in high school who desperately wanted to go to college but parents couldn’t afford to send me. I got industrious and figured out how to get through undergrad on scholarships plus financial aid/work study jobs. –As a new college graduate who realized that a) grad school was going to be a much harder reality than undergrad because the scholarships stopped coming and b) the jobs I could get all paid peanuts. This is when the credit cards started being used, and other disasters. Stupidly, I didn’t take this opportunity… Read more »

db
db
13 years ago

P.S. — A follow up, especially to that last point. I really have to credit Dave Ramsey, and to a lesser extent Mary Hunt, with helping me find the right mindset, some tools, and the belief that I really could pay off my debts and save money. Love him or hate him, Dave Ramsey saved my life because I felt SO overwhelmed by my situation. When I was in my 20s, I was NOT living high on the hog. I was making some very foolish choices, yes. But I was constantly dodging late payments, bounced/NSF checks and for a while… Read more »

Matt
Matt
13 years ago

After seeing the wedding posts, I have to comment. $30k is obscene. You blew 30 thousand dollars on one day. My wife and I got married 2 years ago for about $2000. We had a little over a 100 guests. We got married at the local bowling alley that I pretty much grew up in and where I met my wife. Slightly unorthodox, sure, but I still compliments to this day about how much fun it was to go to a wedding in a bowling alley. Now, we did have some friends donate things. Instead of presents, our friends donated… Read more »

stacey
stacey
13 years ago

re: wedding posts $30k may be obscene to some. $5k may be obscene to others. a local bowling alley may be befitting to one bride and groom. a church, a beach, a mountaintop, a castle, a backyard – those may befit others, and each has its price. i don’t think it’s fair to make a blanket criticism of someone’s decision on wedding budget. my fiance and i made a conscious decision to save money for 20 months on a regimented schedule. we’ve got 150 of our best beloved coming in from 16 states – people who have been generous to… Read more »

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