Yes, Having a $0 Net Worth Is Something to Celebrate


I like to think I’ve made some pretty good financial decisions in my life—like giving up some not-so-healthy habits and saving the money instead, and prepping for a layoff before it actually happened to me. But I’d still rank monitoring my net worth every month as one of the very best.

What’s so special about knowing your worth? Basically, net worth acts as a quick snapshot of overall financial health, helping you see whether you’re moving closer to or further away from your goals. “And unlike our brains, the numbers never lie!” points out blogger J. Money of Budgets Are Sexy, who’s openly tracked his (growing) net worth online for the last nine years.

Quick refresher: Your net worth is the value of your assets minus your debts. To calculate yours, add up the value of everything you own that’s worth something, including cash, investments, your home and car. Then subtract your liabilities, such as outstanding credit card balances, auto and student loans, mortgage, medical bills—basically anything you owe.

The first time I calculated mine in April 2015, I knew I wouldn’t be happy with the number, but I wasn’t prepared for just how bad it was. After I tallied up my meager savings (about $2,250 in savings and $5,000 in a retirement account) and subtracted my debt—including $45,000 in student loans and nearly $15,500 in credit card debt—I was confronted with the fact that I was worth negative $53,554.24. And that was without a mortgage or car loan.

That was my wake-up call. Had I not had a clear picture of how bad things really were, I probably could have gone years thinking I was doing okay, when I wasn’t. So I put my head down and got serious about my finances.

I immediately bumped up my Roth 401(k) contribution from 3 to 8 percent. Then I cut back on unnecessary spending and started a freelance business that generates thousands I can put toward my debt. I also began investing regularly in a brokerage account for goals like buying a house and potentially going back to school. I tracked my net worth monthly to see the impact of my efforts and stay motivated.

Almost two and a half years later, I can proudly say that I’m worth...$0.

I know, it may seem weird to celebrate getting back to the starting line. But it’s actually a pretty big deal, as anyone with a lot of debt can attest. Now all the effort I’ve put into getting here can be redirected to building wealth and reaching my long-term financial goals, like finally paying off my student loans—which I’m hoping to do by the end of 2018—and eventually building a net worth of $1 million.

I’ll get there the same way I got here: By continuing to crush my debt, feed my emergency savings so I don’t stumble backwards and invest for growth. My net worth might fluctuate a bit in the short term since I’m partly invested in the stock market, but I’m confident if I keep going in this direction, I’ll hit my $1 million goal eventually.

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