By Alaina Trivax, WCI Columnist
This past April, my husband and I celebrated reaching a net worth of $0. We are now “back to broke!” Brandon, my husband, is employed by a Physical Medicine and Rehabilitation private practice; I work as a middle school teacher, and I am the primary caregiver for our two young boys.
To some, this might seem like a silly occasion to celebrate. For folks not in the medical field or without significant student loans, this is a milestone that will be easily achieved in the first few years after entering the workforce. For us, though, it’s been a journey just to get back to being worthless. It’s been 11 years since Brandon earned his undergraduate degree and seven since he finished medical school. During that time, he completed a four-year residency program and a one-year fellowship. Now, 18 months into his attending career, we are finally back to broke.
Here’s our story.
Our Financial Journey
Brandon and I met just after he graduated from medical school and got married a few years into his residency. I had grown up in a single-parent household where money was pretty tight, while Brandon’s family had a comfortable middle-to-upper-class lifestyle during his childhood. Our dual income during his residency and my early teaching career provided us with plenty of money, especially since it was just the two of us and our dog. I think Brandon felt pretty financially secure during those early years, too. We could easily afford the things we needed and enjoyed a comfortable lifestyle. We took advantage of our employer’s retirement matching programs, maintained an emergency savings fund, and kept our expenses in check. Still, we had plenty of money to spend on fun stuff like going out to dinner and taking vacations.
When we added up all the numbers, though, we were clearly in the red. Brandon’s student loan balance started at around $330,000; this, combined with my student loans and our mortgage, left us with a very, very negative net worth. Honestly, it was hard to even understand the significance and impact of this debt. At least our home was developing equity and could be considered a positive asset; our student loan burden, though, was more than 1.5x greater than our mortgage. And while we weren’t spending extravagantly, we weren’t really making progress in moving toward a more positive direction.
A year and a half into our marriage, Brandon moved out of state for a one-year fellowship program. The necessity of maintaining two households and the costs of having him travel between our home and his apartment each weekend forced us to get serious about our finances. During the first few months of his fellowship, the moving expenses and an unexpected basement flood left us spending more than we were bringing in. For the first time in his life, Brandon experienced what it was like not having enough money to pay all of the bills. It was incredibly distressing for both of us to know that we were committed to this fellowship and all of the associated costs, while not knowing how we’d afford to get through the year.
We began holding monthly meetings to review our income, expenses, and overall financial progress. At the time, we were using a spreadsheet-based system into which I imported and categorized all of our transactions for a given month. Thankfully, I could earn additional income tutoring on the side, and, between that and our savings, we made it through the year. We celebrated the end of his fellowship with the birth of our first son and began to transition into our new lives as a family of three.
We continued using that spreadsheet method for another six months or so, but eventually, the time required to maintain it became too much. We transitioned to a web-based program that automatically imported our bank account and credit card transactions. This program also came with some more advanced reporting options, including a graph of our still very, very negative net worth.
That brought our awareness to a new level. We began spending more intentionally, with the goal of knocking out Brandon’s student loans while still maximizing our retirement savings. In August 2021, after 10 months of this targeted effort, we reached a net worth of negative $100,000. A nice round number and a pretty big deal! We celebrated with a nice dinner out, ordering the chef’s menu at a local upscale Italian place. Brandon also got to enjoy the sommelier’s wine selections, but it was mocktails only for me as I was a few months pregnant with baby #2. Dinner knocked our net worth back down to a negative $100,400, but it was worth it. We had worked hard to make this financial progress, and it was nice to loosen up and celebrate!
Note: the red bar represents our debts and the blue bar represents our assets.
And Now, We’re Broke!
We welcomed our second baby boy in March 2022 and then achieved a net worth of $0–flat broke!–the following month. This was a huge milestone for us and such dramatic growth from just 22 months earlier. We continued the tradition of celebrating with a nice dinner out, enjoying the tasting menu at a different Italian place. (Perhaps we’re too predictable!) This meal was a bit more adventurous for us, featuring caviar and steak tartare along with some delicious pasta and fabulous wine. We spent some of the time reflecting on our hard work and talking about our future financial goals. Taking the time to celebrate our progress moving from a very, very negative net worth to simply having a big fat zero was pretty meaningful.
Our next big goal is to pay off Brandon’s medical school loans. We’re on track to knock those out in the next three years, and we are already planning how we’ll celebrate. We’re going big for this one! Once they’re paid off, we plan to set aside the money that we were spending on student loans and spend a little recklessly. (Though, is it really reckless if we’re planning it?) Brandon is thinking he’ll spend the money to get fitted for custom golf clubs and would like to take a golf trip to break them in. I’m planning to update my closet with the help of a personal stylist; my current wardrobe revolves around keeping up with a toddler, and I’m beyond excited to find a new sense of style.
After that, we’re looking forward to some lifestyle updates that will be celebrations on their own. We hope to move into a larger home in the next five years or so. I wish I could say we’ll miss our combination office/gym/playroom/family room, but it’ll be nice to spread out a little more. Eventually, we’d like to buy an ATV to play around on when we’re visiting my mom’s farm up north. We’re hoping to start taking our kids on annual vacations abroad as they grow, as well.
The White Coat Investor has a few suggestions of other financial milestones that are worth celebrating. We plan to keep tracking our progress toward certain targets, including reaching a net worth of $500,000 and $1 million and achieving a retirement portfolio balance of the same amounts. It’s wild to even imagine hitting those numbers, so we’re not sure how we’ll celebrate those just yet. Any suggestions?
Want to hear more stories about getting back to broke and beyond? Check out the WCI Milestones to Millionaire podcast, where we celebrate all of your financial accomplishments, no matter how big or small!
How long did it take you to get back to broke after medical school? What did it feel like once you hit that $0 net worth? What did you do to celebrate? Comment below!