The Soggy Hotdog: A Personal Finance Wakeup Call

I remember the point of my financial meltdown very vividly. It wasn’t as much a meltdown as a wakeup call that things could no longer continue the way they were going if I wanted to live a successful life. I was working for what seemed like peanuts and my wife and newborn daughter were at home. Money was tight, but we weren’t starving by any means. We covered basic expenses, but charged luxury items to a credit card and paid for them over time. My decision to return to school added significant expenses to our budget, and again we financed a large portion of my tuition and books compliments of Visa. The minimum payments began to rise, and my income stagnated.

Things Began to Tighten Up

Do you remember those classic action movies like Indiana Jones or Star Wars where the heroes are trapped in a room, and suddenly the walls began to close in from all four sides? That sort of sums up our situation about ten years ago. At first we had plenty of space, despite low earnings and no savings. Over time the walls began to creep in. Student loan repayment, current educational expenses, credit card minimum payments, a car payment, insurance, medical bills from the birth of our first child, etc, etc. all began to eat away at our monthly income.

The Soggy Hotdog

I don’t remember the exact date, but I remember the events of the day like it was just yesterday. It was a normal day on the corporate treadmill. I arrived at work and logged on to my credit card account online to discover I was over the limit – doh! I knew that would come with a $29 fee and could potentially reset my interest rate again. I was kicking myself for using the card to pay for new cell phones earlier in the week. Oh well, I’d make a big payment to bring it down under the limit as soon as I got the rebate from the cell phones. Lunch time rolled around and I headed out to the nearest fast food restaurant. I never carried cash, so I drove around to the first window and handed over my check card. Declined. What? That couldn’t be right. I had over $100 in my checking account (or so I thought)! So there I was at the McDonald’s drive-thru with a dead check card, an over-the-limit credit card, an empty wallet and exactly fifteen cents in the change holder in my truck. Embarrassed, I made up some excuse about it being a new card and drove away apologizing for the mix-up.

Now that I had wasted the first twenty minutes of my lunch break there was no time to head home for a bite to eat. I had no money, and no snacks back at work. I opened my wallet and found my Chevron gas card. It was the one card that would still work. I drove to the closest Chevron station which had a convenient store attached. I went inside and got two of the worst hotdogs I had ever eaten in my entire life. The buns were under the hotdog rotisserie and the condensation had turned them into a soggy mess. I’m still not sure the hotdogs were even real meat, and the mustard was watery. I charged the $2.12 to my gas card and returned to my truck.

As I sat there in the heat eating those crappy hotdogs a wave came over me. No, not just a wave of nausea. I was too smart to live this way. Here I was forced to charge my lunch on a Chevron gas card because I was too irresponsible to properly plan for meals, food budgets, etc. It was time to grow up. I choked down the remaining lunch and returned to work, thoroughly disgusted with my financial life, and with a bad case of indigestion.

A Lifetime of Learning Begins

That night while surfing around for information on money management, I discovered a website by some guy named Dave Ramsey. I began to listen to his archived shows online. I subscribed to financial magazines such as Kiplingers Personal Finance and Money Magazine. Reading personal finance books became a side hobby, though it wasn’t until much later that I really developed a taste for this genre. My television was often on CNBC or Bloomberg’s. My favorite section in the newspaper became the “Business” section. I started reading old Wall Street Journals at work when my boss was finished with his copy. I wanted to learn everything I could about money, even though I had none. One day I would have money and I wanted to know how to handle it better. I had learned nothing in high school about personal finances, and chose to make bad decisions early on because I bought into the mentality, “I can always pay it off later.” Later never came. What did come was a small mountain of liabilities that trapped me in a dead end job for years because I had no options.

Our story is a cautionary tale for newlyweds. In our excitement to live the lifestyle of our dreams, we sacrificed much of our future. We are still not completely debt free, but have made that our number one mission. And when we do reach debt freedom, we will never go back – and I mean NEVER!

So there’s my story, I’m interested to hear your “soggy hotdog” moment?


  1. What a great story. I kinda made me tear up, picturing you sitting in your truck eating gross hot dogs. awww. I don’t really have a soggy hot dog moment.

  2. “Only after disaster can we be resurrected”–Tyler Durden in Fight Club

    Why is it that we usually have to hit some kind of “rock bottom” before making a significant change in our lives. My “soggy hotdog” moment happened after my apartment was destroyed in a fire (after I let my insurance lapse–Ughh)

    If you are fortune enough not to have endured your “soggy hotdog” moment, don’t wait for it!!! You can change without it.

  3. I came to marraige with a ton of debt. Most of it is student loans, but I had some credit cards too (probably about $7k total). My husband and I have paid off all the cards, and we’re now working on the student loans. I asked him to take over our finances completely and give me an allowance. (Yes, I realize that it sounds bad and might be a cop-out, but I just wanted to know how much I should be spending.) He deposits a set amount in one of our accounts every month, and I can buy whatever I want–as long as I don’t exceed my allowance. It’s working really well and helping me learn to budget.

    Thanks for sharing your story!

  4. Thanks, Frugal Dad, for your story.

    My story came at the end of my “music career”, one where I basically charged everything to get equipment, record demos, and help pay for advertising for shows. I was so very proud of the fact that we were able to do all of the things the “big boys” were doing. It dawned on me in the middle of 1992 that the $30,000 in personal debt that I had racked up (while never making more than $20,000 a year) I was *never* going to get out from under it. Also, with the music industry changing and moving away from the music that we liked to perform, I had to make a decision to close up shop or go even further into debt. I chose to cut my losses. I married my sweetheart shortly thereafter, and felt miserable about the financial straitjacket I had put her in (she was the frugal one, and had managed to save close to $20,000 by the time we were married. I couldn’t bring myself to ask her to liquidate that money to help me pay off my debts, so I soldiered on for a few years, paying minimums and putting whatever I could towards the debt when I could.

    After working at my company for a few years, I had the chance to exercise this neat thing I had never really learned much about called “stock options” and I realized that, if I did it, I could effectively wipe out *all* of our debt. Sweet! I decided that that would be a good use of those, and sold half of my shares to do just that. The stock had gone up in value almost 4 times from the point in which it was offered to me. What could I lose? So I decided to lop off all the debt in one fell swoop. This was in 1995, just before the web and the internet boom *really* started to take off. My stock that was worth four times what it was optioned for when I sold it… ultimately rose to *ONE HUNDRED AND SIXTY* times my original option price at its peak!!! Even today, with the stock off 70% of its all time high, it is still worth *40 TIMES* that original option price… in other words, while I had the ability to pay everything off, and it was a great blessing to have it, had I not gotten myself into that situation to begin with, and had I exercised them at a more advantageous time, I truly and honestly could be a multi-millionaire today. Now granted, there’s a lot of “what-if’s” and “could-have-been’s” in there, to be sure, but the point is my being that much in debt and the option I used to clean it up cost me dearly in potential opportunity later on.

    The good side to all of this was that I only sold *half* of my original options to clear out the debt. Plus, I received additional options over the years, as well as a stock purchase plan which I religiously plowed the maximum into, plus paying the maximum allowed into my 401K from that point on. This attitude allowed me to accumulate enough stock shares over several years to put 75% down on a house in the San Francisco Bay Area in 1999. I took a 30 year fixed rate mortgage for the rest (because I wanted the tax write off, and I didn’t want to sell *all* of my shares to buy my house… I was going to be *SMART* this time and not lose out on all that great stock upside opportunity).

    Well, the internet boom went bust shortly thereafter, my remaining shares plummeted by 75% and I was shell shocked to the point where I just kept saying to myself “it will come back, it will come back, it has to come back!” No, it doesn’t have to come back, and so far, eight years later, it hasn’t. Over the past 8 years, I have had to draw from those shares to help sustain me during periods of unemployment, going back to school and finishing my degree, and a number of other areas where that money was needed to fill in the gaps where my earnings weren’t getting us far enough. While I wasn’t *borrowing* money to keep us going, I was definitely chewing up my “nest egg” at a pretty fast rate.

    This brings us to December of 2007, and my discovery of Dave Ramsey and the Dave Ramsey Show. As I listened to it, and I read his web site, I examined many of my decisions. I came to realize many things. One, I was extremely lucky, and I had resources that many people didn’t. Two, I was mismanaging them terribly. Three, if I didn’t do something *quickly* and drastic to reign in our spending, that nest egg would be gone and then what would I do? After doing some analysis of my earnings, our expenses, and the reality of how much money we could or couldn’t save, I came to the conclusion that the biggest barrier was our house payment. As long as we made this house payment, we would not really be able to save money towards other things, but sitting in the brokerage account, though greatly down from its lofty peak some years ago, was enough money to completely pay for the house, fund a six month emergency fund, set up college savings accounts for my three kids, and even have a little left over to do some other things.

    Finally, I heard a caller on Dave’s show asking about carrying a mortgage while he invested in stocks or mutual funds, and the recommendation that paying off the house and having that debt completely gone before investing would be the biggest blessing, I decided he was right. Thus, while it was a little out of order, I came to the conclusion that paying off the house, here and now, would be the best decision we could make, coupled with a serious effort towards budgeting, really getting to know where our money was going, and most importantly, investing that house payment we used to make into retirement savings, kids college and other long term savings and investment options. We pulled the trigger on December 14th, and now, six months later, I have to say it has proven to be the *best* decision we have made in a long time.

    I keep a receipt folder of all of my “big purchases”, some going back as far as twenty five years. I went through it some nights ago and was staggered to see some of my old purchases staring back at me. Literally tens of thousands of dollars were spent on items that I no longer have, hadn’t seen or used in any way shape or form in many years, and the “oh, what if’s” started flooding back at me. Well, there’s nothing I can do about yesterday’s “what-if’s” but I use that folder now to remind me any time I want to go off and spend money on something that I really don’t need or is just going to feed my ego. Having lived through a number of years of realizing “missed opportunity” costs in my life, I’m vowing here and now to do my best to not miss those opportunities in the future. Time will tell how well I do going forward, but at this stage in my life, living 100% debt free, putting away that house payment into savings every single month, and with a fervent commitment to spend less than I earn, the future looks pretty good :).

  5. Yes, thank you for your story. We bought a house before we got married. Paid for our wedding ourselves and while we did it on the cheap, it was more than we could afford at the time. I remember feeling like we were drowning. Now, if we had to do it over, I would have been much more thrifty about all the new house stuff you think you “need.” We would have reused more and not worried about updating lighting fixtures, etc. I don’t think we had an actual moment that made us change. It’s been an evolution. Paying off our credit card debt and car loans made us much more careful about things though. I think when you have debt like that, you feel like “what the heck is a little more” but when you’re out of it, you fight harder to stay out.

  6. Wow. I’m thankful that I don’t really have an exact soggy hotdog moment. But I do get waves of panic when I think about our debts and meager savings. Hubby keeps saying that his savings account is meant to be spent on whatever he wants and I want to scream! It’s incredibly frustrating. I am trying hard to change my mindset on spending and hoping it will rub off on him. *sigh*

  7. Eeesh, makes me think of a bad hot dog I once had.

    My moment was when I realized that I was going to be Micah’s partner in paying off his student loans and that they wouldn’t go away by magic. Right around the time we got married (though I’d known about them for years). I had no debt myself when we got married…so I just took what I already knew and built it from there.

  8. I love your story! I think you should pay more attention to money. I went to Big Lots the other day, and spent $5.00 on six things! I was so proud that I had self control. Thanks, Jason, for sharing you story.

  9. My moment of clarity came last fall when I realized that I had frittered away close to $10,000 in ‘savings’ (from the sale of a house) while simultaneously running up my credit cards again. I had paid everything off when I sold my home and relocated—and less than a year later I was back to my old habits, instead of taking advantage of my ‘fresh start’.

  10. ohhhh! I dont have a personal story. The wake up call to me was the story of my parents. My dad had always good jobs well payed, but he IS (he still is) always complaining about not having money which is NOT true. He is a poor person inside his head. and my mom well, thats a loooong story, but I just tell you we even didnt have food for a while… I learn not to be like any of them financially speaking. I love them, but man! what a mess they have in their wallets and heads!. Then when I got married, my husband had HUGE credit card debt on his shoulders. It took us 3 years to clean it. And I think my strategy (the get debt free) worked. 😉

  11. Great Story. I have been doing a special series on how I got to where I am today on my site. My “Soggy Hot Dog” Story will be coming up next week. Thanks for this post. It always makes us that may be a few steps behind feel a little better.

  12. Some great stories here. Let’s hope they help some folks realize they aren’t alone in having money troubles, and they can be overcome.

    I don’t have a soggy hotdog story. But I’ve made my share of mistakes and have the ‘if only’ moments now and then.

  13. My moment arrived a few months ago. I left college with $3,000 in credit card debt, convinced I could pay it off easily when I got a full time job. I finally got it paid off a couple of years ago, and things were great for awhile. I was starting to save money and invest in index funds and having a great time with it. Then one cold sub-zero morning my work dog (I’m a cattle rancher) jumped out of the truck after I parked and landed on some ice and broke some bones in his paw. The vet bill was $600 and then the next month I had some more unexpected bills. Next thing I know, I’m back into credit card debt, $2000 this time. These personal finance blogs helped me realize that it doesn’t matter if you have a credit card that is paid off if you don’t have an emergency fund as well! Along the way I’ve also refined my spending habits. That was my soggy hotdog moment.

  14. My moment came when the IRS seized our current account to the tune of $8000 for the THIRD time to pay for back taxes. Wes had over $60000 in back tax debt when he and I married. We kept separate accounts, but since he earned the most money and was a contractor, we kept separate accounts. Every time he built up his account balance to pay current quarterly taxes, the IRS seized his account for the back taxes.

    The third time this happened, we had $150 in my bank account, no way to pay that week’s $1151 in child support for Wes’ children … and the same day we received a letter that the IRS was putting a tax lein on my house, that Wes’ name isn’t even on.

    We’re just starting on our journey toward getting rid of this noose around our necks.

  15. My soggy hotdog moment took a while to arrive but, when it did, I FINALLY realized that I just didn’t have the money to throw at high interest mortgage debt any longer. I realized that my extremely poor credit had trapped me in big debt with interest rates that had no chance of being reduced. I also had no hope of refinancing. My FICO scores are currently about as poor as they can get. I came to this realization just at the beginning of this year 2008. Since then, I have been forming a budget and cutting spending, trying to save and working to get out of these loans. I have to accept that I stand to lose everything, including all of my downpayments. For the first time EVER, I have acknowledged just how important it is to HAVE GOOD CREDIT (which I never cared about before) and my goal is to have such excellent credit I won’t be able to stand it!!!

  16. Dear Frugal Dad– your story hits painfully close to home. I lived like that for many years and Dave Ramsey helped turn it around for me too. Thanks for sharing your story.

  17. Great post! I’d say that there can be many “Crappy hotdog” moments in one’s life, especially if there are many things to change. Did your wife help you to stand on your feet in money management?

  18. Is great to learn from others. Next year I will get married; seeing all the comments and experiences here make me think about all the financial implications it has.

    So I will make sure I start planning from the beginning to avoid debt surprises in the future.

  19. Its amazing the things that will push someone over the edge. That mytical ‘tipping point’, for you it was soggy hot dogs for someone else it could be an eviction notice.

    In my opinion the key question is how do you get someone to their tipping point faster so that they don’t spend more years than necessary in financial hell? What can you do to help a loved one that you know are spending foolishly? Do you just wait until they have their tipping point or do you intervene and potentially damage that relationship?

  20. My soggy hotdog story was more of a situational change. When I was divorced, I was left with 3 kids, next to no job skills and all of the debt. Having the kids was a blessing in that I had no time to sit still, I had to improve our situation.

    I began by splurging on a columnar accounting book and proceeded to record each and every purchase. We had no wiggle room, so I needed to know to the penny where our bank account stood. From that I was able to come up with an amount that could be allocated to paying down the debt.

    I contacted the credit card companies and others owed and made a proposal to them. I would take responsibility for the principle owed, but as of a specific date, they would no longer charge interest. The deal was structured that all had to agree or the next step would be bankruptcy which was something I really wanted to avoid.

    I was lucky, they all agreed. It took a few years to pay them off during which I upgraded my training and found a job. I know having had that experience, I will never knowing allow myself to be in that position again.

    I hope my story will give some an alternative to bankruptcy when their backs are up against the financial wall.

  21. It’s funny- but I’ve had many a soggy hotdog moments….
    Like in 1990 when I was laid off from my job with $10 on my person, $5 in my checking account and no prospects. Selling everything I owned for a pittance just so I get back home before I was homeless which was only a few weeks away if I did’nt act fast.
    I also had a drink and drug habit that was eating me alive, when I returned home I checked into a rehab and having no insurance and no cash I was checked in as being on medicaid.
    I’ve had to max out my last credit card AMEX using travelers cheques then cashing them in so I could pay my bills and eat when I got out.
    After being reduced to living in a bus station with .50 in my pocket and sleeping on a bench I finally swallowed my pride and returned to live with my mom who called me a failure constantly but I had listen to it because I had nowhere else to go.
    That was 20 years ago but I still did’nt learn- I’ve filed for bankruptcy twice, My family and I live paycheck to paycheck and I just can’t catch a break. I no longer have any debt except for my mortgage-but I just can’t get ahead!