TL;DR: My big breaks were learning to save, to be creative in paying off credit card debt, not to CREATE credit card debt, and to budget. :)
Longer version below. :)
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I think back on four things that were turning points in my financial life.
THING ONE: When I was a young teenager in about 1980, I wanted a TV for my bedroom. TV's were expensive then, and I had my heart set on a 19" Sony that cost about $500. My stepdad at the time told me, "if you want that TV, you're going to have to buy it yourself." At the time, I was incredibly offended and petulant about it--and in a fine display of stubborn teenage rebellion, I resolved to do just that. I saved birthday money, Christmas money, babysitting money, any money I got my hands on; it took a long time, but I managed to save $500 and bought the TV. I had that thing for nearly 20 years until it gave up the ghost, and loved it. It taught me the discipline of saving toward a goal, and that having money meant freedom and power to make one's own choices.
The interesting thing is that said stepdad was something of a jerk; looking back on it, I don't know what he was trying to show me--that such things were and always would be out of my reach, or to set a savings goal and reach it. I wouldn't put the former past him (jerk that he was), but in my heart of hearts I hope it was the latter. Whichever it was, though, it was a life-defining moment for me--I might be a very different person if I had not learned that I would have to "make my own way" in the world.
THING TWO: When I was in grad school in the early 90s, I was in about $3000 of credit card debt at some exorbitantly high interest rate. Doesn't sound like much, but when you're making $10K a year in academic indentured servitude, it's an awful lot. (I can't imagine owing 33% of our current household income on credit cards!) My mom helped me "refinance" my car (which at the time was worth more than the small amount I still owed on the loan) at the very same credit union where I'd saved the money for the TV all those years before--a kind of cash-out refi where the cash was used to pay off the credit card balance. I then kept making the "car" payments at a much lower interest rate until the "car" was paid off. This gave me a "reset" and set me up for Thing Three.
THING THREE: A dear friend explained to me during my "refi" process that he paid the full balance on his credit card every month and never carried a balance. This was a new concept to me at the time--I had never heard of credit cards being used in that way (thanks, bad financial upbringing!). He only used his credit card, he explained, for a convenient substitute for cash and never used it to buy anything he didn't have the cash for. This was a revolutionary idea for me--I had no idea how anyone would even KNOW if he had the cash for any given purchase or would have it at the end of the month, but I knew from experience that he was right from getting in to $3K of credit card debt by NOT paying it in full every month. This set me up for Thing Four.
THING FOUR (the REAL life-changer): My grad-school roommate, who heard me describing my credit card epiphany and lamenting how I could never manage it that way, said, "Why don't you just use something like Quicken to create a budget?" In words which ABSOLUTELY changed my life, I said, "What's Quicken?" And she promptly gave me an old copy of Quicken for DOS that had been gathering dust on her bookshelf. Upon working with it, I immediately and intuitively understood what I'd learn to call the "envelope system" and the "zero-based budget" when I later discovered Dave Ramsey--that is, I could CHOOSE how much money I spent in various categories, that spending MORE in one category meant spending LESS in another, and that inflow minus outflow MUST be zero EVERY MONTH or I'd be back where I started in no time.
Things Two, Three, and Four happened when I was about 25--twenty-three years later, I'm STILL using Quicken, STILL creating a monthly zero-based budget, and STILL paying my CC balance in full every month.
Thing One came back in to play when I learned about the concept of early retirement in maybe about 2012 or so; sure, I'd been saving in a reasonably aggressive fashion for retirement, but once I saw the light, early retirement became my new 19" Sony TV, and DH and I are now on track to be members of the FIRE Class of 2021 (or thereabouts). :)
