Wealthy_1's Financial Epiphany

Gather Little By Little has invited bloggers to share their financial epiphany. So I'm going to share mine.

My financial epiphany first came in September of 2006. Earlier that year I had applied for and received an additional credit card with $11,500 credit limit and supposedly a 2.9% interest rate for 12 months. As with all credit card offers I had received, I rationalized that I would use this card to pay down higher interest rate cards and pay it off in a year. (I know now that one of my problems was that I never had a plan in writing.) I used this special offer card to transfer balances from my already up to the limit credit card, to pay off my retail cards, and to support my very expensive bodybuilding competition endeavor.

When all was said and done, I had reduced the up to the limit card from $12,300 to $9,100. The interest rate on that card was 11%. Because I was clueless, I decided to pay $100 per month on the $9,100 balance. I did this from June to September. Each time I'd make a payment, I would check the balance on line. It wasn't moving. In addition, I put myself further in debt because I just ran that special offer card up to the limit.

Here comes my "ah-ha". The $100 per month I was paying only covered the interest. It wasn't making a dent in principal! At the rate I was going, I was never going to pay that credit card to zero. And now I had two credit cards each with a big balance!

That was my first wake-up call. I've had several smaller wake-up calls since then. Of course, reading Dave Ramsey's book this past year really helped my to create a concrete plan and has given me the courage and confidence to work my plan.

Now, what about you? When did it hit you that change was in order? What's your financial epiphany?