Getting out of Debt: Part 1 – The Zero Net Worth

Our journey out of debt begins a long time ago in the early 1990s.  My husband and I were just out of college and we had a nice two-bedroom apartment with no living room furniture because we were too broke to buy any.  We did, however, have a Sega Genesis!  Just thinking of Sonic the Hedgehog brings me back to those days.

We were lucky to have no school loans, but we both had some credit card debt from school expenses and “lifestyle maintenance.”  See Sega Genesis above.  We were both interested in investing and had a few investments apiece.  When we weren’t playing the Sega, we were watching the movie “Wall Street.”  What the investments showed us was that the gains we were making in stocks were vastly overshadowed by our debt:  we had a negative net worth.

Our first financial battle was to get to a zero net worth.  We worked together, tracking finances in various notebooks and paying down some of the debt, and within a year or so we hit the point where our debts and investments balanced to a zero net worth.  It felt like a cause to celebrate!

We would need these foundational planning skills in the years to come as we zig zagged between making good financial choices and buying the things we thought we deserved.  Stay tuned for part 2….