Reaping Your Rewards

Money epiphanies: Hearing, heeding the call to change


People who were deep in debt or just needed to change describe their powerful money moments

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Money epiphanies: Knowing when change has to happen

Whether you’ve been charging excessively, toiling in an unsatisfying job or delaying costly dreams, complacency can take hold.  One day, however, you may receive a sign. Suddenly you’re keenly aware that you must change how you’ve been earning, spending, charging or saving. You’re ready.

Here are the powerful money epiphanies of just a few people who listened to their inner voice and why the experts warn against ignoring that unique moment of clarity.

I didn’t know how to manage money — and had to learn
In 2014, Marc Renson of Schenectady, New York, hit bottom. “I was 44 years old and owed $28,000 in business tax, $4,000 personal tax and both were liens put on my credit report,” says Renson. “I had no savings, and my credit score tanked at 567.”

Identifying and accepting his problem was hardly immediate, though. “I own a successful restaurant. I’m a chef. I deal with a lot of cash,” says Renson, who explains that he realized that his lack of financial skills caused the mess, along with his hubris: “I was a monster and wouldn’t listen to anyone, even my accountant.”

Renson’s “aha” moment was when he wanted to buy a second home in Key Largo, Florida. The lender declined his mortgage application.

“It all slapped me in the face,” says Renson. “I examined my life and said I need a financial adviser. And that same day — my lips to God’s ears — a financial adviser from Northwestern Mutual walked into my restaurant. I took all their quizzes, answered all their questions, and they put me on a budget.”

With that, he was off. Over the course of a year, Renson deleted all his tax debts and  increased his annual salary by $25,000. To date, he has saved $16,000 and his credit score has risen to 629.

“I’m getting there,” says Renson. “My life is so amazing now. I learned from my adviser that there’s no sense saving money until you pay off your debt. He really put my nose to the grindstone. ‘This is what you spend, this is what you save.’ I get that now.”

My debt was bad and getting worse — it was time to stop charging
Katharine Paljug is a social media consultant living in the Washington, D.C., metro area, and says her fluctuating income was causing her consumer debt to escalate. She and her husband were not really paying attention, so when expenses couldn’t be met with cash, the plastic came out.

“Fast forward six months, and we realized we had several thousand dollars of credit card debt that was only growing!” says Paljug.

My life is so amazing now. I learned from my adviser that there’s no sense saving money until you pay off your debt. He really put my nose to the grindstone.

— Marc Rensen
Chef, restaurant owner

Yet her epiphany was not so much a light bulb moment, but a “slow burn.” Paljug had to gather courage to broach the subject. “It was tough to go to my husband and say we need to make changes. But when I did, he was 100 percent on board. He was proud of me.”

That discussion led to an abrupt about-face: “We knew we had to make some big changes by cutting down our spending, putting more into savings and opening a Roth IRA.”

With discipline and teamwork, 10 months later the couple was fully out of debt, saving for retirement and even setting aside money for a big trip to Europe. “Plus, I now do a lot of writing about personal finance,” says Paljug. “It ended up having a very happy ending.”

The house in the ‘burbs, 9-to-5 world is not for me
Canadian born writer Bex vanKoot’s awakening occurred right after her wedding. “My mother-in-law presented us with a seed fund for us to use as a down payment for a home,” says vanKoot. The gift was generous and would set them up comfortably for the future.

Yet it dawned on her that she had no desire for a mortgage or the traditional trappings of suburban life. She quit her job working full-time doing tech support for a U.S. Internet provider, and planned a trip to Mexico with her new husband. “We lived in the back of a van,” says vanKoot. “At the time we did it assuming was an adventure. To have fun, then go back to get real jobs, restart the 9-to-5 life.”

After five months of traveling and burning through the savings, a more profound epiphany kicked in. There was no going back to the ordinary. She was struck with an undeniable fact: “I realized I had been spending so much money trying to be happy in my downtime,” says vanKoot. “I was impulse shopping, eating fast food because I didn’t have the time to make real meals. We knew we had to rearrange our concept of what would make us happy.” That moment was scary, but pivotal.

Her husband had a contract job before leaving for their first trip to Mexico, but was offered a job with a big defense contractor upon return. He turned it down to keep freelancing, so they could continue to travel. To make ends meet, they revised the way they spent and saved  money. “We housesat and stayed at very inexpensive places, started saving everything we could for big expenses. We completely revised our future plan and focused on working as little as possible to continue paying our bills.”

“That was six years or so ago, and my only regret is that it didn’t occur to me sooner,” says vanKoot. Today the couple is still living adventurously — and inexpensively — in Oaxaca, Mexico. Now, though, they’re ready to settle down and buy a home: “We feel sure that this is the place for us.”

My passion may cost me everything, and I’m willing to take that risk
“My money epiphany was that I was going to have to go completely broke to make a film shot on location in Mongolia,” says Joseph Spaid, a New York City film director.

That recognition was, he recalls, simultaneously terrifying and liberating. “I was at a point in my career when I needed to make a feature film. Two years before I had encountered the eagle hunters of Mongolia, and knew immediately that I’d be back to make a film about these incredible people. Finally, it was time for me to put up or shut up.”

He chose the latter.

I was impulse shopping, eating fast food because I didn’t have the time to make real meals. We knew we had to rearrange our concept of what would make us happy.

— Bex vanKoot
Freelance lifestyle writer

“Broke certainly did happen. In fact, at one point I was $14,000 in debt, but managed to surf that balance from one credit card to the next on 0 percent offers without ever paying a penny in interest or transfer fees until I paid it off in full.”

Although Spaid concedes his movie, “Kiran Over Mongolia,” was never going to make him or anyone else rich, he felt compelled to go forward and complete his plan. In the end, he believes that the team created something beautiful and useful for this world, which he considers a profoundly satisfying experience. And although the initial cost was high, it paid off in broadening opportunities. “It changed the conversation that I participate in, my circle of friends, and what I’m up to in my life. It was all worth it,” says Spaid.

How to identify a debt epiphany and put it into action
To know if you’re having a debt epiphany and not just a momentary yearning, pay attention to new physical and emotional reactions, says Thomas Faupl, a San Francisco therapist specializing in financial psychotherapy, “You sense being more present. You’re more aware of breathing, your chest feels open.” Relief, excitement, determination and sudden strength are also indicators.

The problem is people often ignore such strong signals. “With finances, denial is a coping method, ” says Faupl. Freezing is a common reaction, since any kind of change — even positive — is scary. Then that moment of clarity can become muddled and will close up again. “People go back into avoidance or negative thinking,” he says.

“The fact is an epiphany is also often a frightening moment,” says Faupl. “They’re facing a mountain. They may have to give up something, like using a credit card or change their job, relationship or location.”

Tips for debt epiphanies
So how does one ride that wave? Faupl (who also has a background in credit counseling, so understands the risks and realities of money management) offers the following tips:

  1. Don’t beat yourself up. Maybe you made mistakes in the past that you’ll have to pay for now. It happens to everyone, so practice forgiveness. You’ll never move forward with what you’re really supposed to do if you don’t.
  2. Get support from the pros. A credit counseling organization can develop a budget and debt plan; a financial planner can arrange investments.  Want to launch your own company? Visit your local Small Business Administration. For bad but entrenched money habits, a financial therapist may be in order.
  3. Assemble the facts. Write your revelation down, along with the financial changes it will take to achieve it. “You need to know if you’re short $1,000 a month or breaking even, and what your new endeavor will cost,” says Faupl.
  4. Identify what you need to do. That could be to cut down on expenses, get a better paying (or more fulfilling) job, move to a different city or country, go back to school or join a professional organization. Seek out people who are already doing what you want to achieve and ask how they did it.
  5. Accept that it may not happen overnight. To honor a money epiphany, just turn in its direction and proceed as slowly as is necessary toward the goal. Take it in steps. You’ll get there eventually.

“It works,” says Faupl. “Eventually people can’t deny their money epiphany anymore and something breaks open. It’s an empowerment experience.”

For those still hesitant to heed the call of what they’re really meant to do with their life and finances, take it from vanKoot: “In my experience, ignoring that little voice or gut feeling makes it harder to follow it later. The feeling doesn’t go away, it just gets more complicated.”

Other stories by Erica Sandberg:You did WHAT to pay off your debt?, 6 credit-based conspiracy theories

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