A Kick In The Butt

Blogpal MoneyFunk (see her blog listed in my blogroll) wrote a post yesterday asking how we all kicked the credit card habit. I'm always interested to hear other people tell their financial story, regardless of where they are in the process. Personal finances are just that, personal, and in my opinion, the personal aspect trumps everything else. What I'm saying is this ... it doesn't matter how much you know, it's your personal habits and motivators that will ultimately push you to achieving your goals.

As you've read in my posts this week, I used to be in an endless cycle of debt payoff. I just couldn't seem to make any progress. I began the journey in the late 90's and didn't accomplish my goal until April 2006. How did I end the cycle? What changed? I'll tell you what changed, I got a good kicking in the the butt! It was sometime between 2001 and 2002 that I attended a real estate investment class. This one was different, it wasn't like one of those late night infomercials that promise big rewards with little work; nor was it one of those hotel seminars that pretty much promise you $100,000 in your sleep. This one was real. The instructor was real, she was a real estate investor in our city, she was practical, unassuming and very transparent. She told us about the good, the bad, and the ugly as she had experienced the full range of real estate investing. She would always give homework, homework like get a copy of your credit report, practice calculating your rate of returns on specific properties, learn what a 1031 exchange is, so on and so forth, again, very practical stuff. Well one homework assignment was to go home and list all of our non-mortgage debt. Simple right? Here's the twist. We were to list all of our debt in one column and list the amount of interest we paid each month in a separate column. Hmm, never quite looked at it like that before. When we returned to class the next week, she asked us to take out our homework and then proceeded to say something like this, "look at the column with the interest and look at the total. That's how much money you're throwing away each month."

Let it sink in ...

Yep, that was my kick in the butt! Finally I had gotten sick and tired of being sick and tired. From that day forward, I maintained that list of debts, rearranged it from smallest to largest, and commenced to kicking debt in it's butt. That was my catalyst for change. What is or was yours?