So I went back to college a couple of times (it took me a while to figure out what to do with my life). I went into a LOT of debt, about $40K of loans. During my last semester I got a letter from the government telling me that I had maxed out.
I got a few jobs in software development. At one of the jobs (while I was still in school) I started putting money into a 401(k) plan. I made one contribution, and then there were layoffs. They lost one of their large customers because that customer was acquired. This was around the time of the dot com crash. So the money in that account really did go to zero.
I eventually got one at one of the big banks. When they made the offer and told me the salary, I nearly fell out of my chair. About six months after I joined, the group that hired me left to start their own company. I decided to stay, since I lived in the city, and they were all out in the suburbs. I had no desire to go out there. I was put into a new group that did something totally different with technologies that I was not familiar with.
Then a few months later 9/11 happened. The economy was already slowing down. Now we were all worried there would be layoffs. All of my friends and family had left Chicago. I was living in a new neighborhood. I was in a new group in the bank. I had a lot of debt and not much savings. I realized I was in a very precarious position. So I stayed in a lot and started up a savings account.
I can remember sitting on the floor of my apartment looking at my savings account register when it only had about $2000 in it. I thought to myself that if I got laid off, that $2000 was all that was standing in between me and homelessness. It would not last very long.
My mom told me to start contributing to my 401(k) and to open an IRA. I put it off because I needed money now: I had been unemployed and still had debt. I did not see the point in putting away money that I would not be able to touch for decades when I had financial needs now.
Finally after four years I paid off all my loans and became completely debt-free. I made a LOT of extra payments.
Six months before I paid off my loans completely I did start contributing to a 401(k) and opened a Roth IRA. Before I did, I had done some reading about where to put my money. I did not want to put anything into the company stock since Enron was still fresh in people’s minds. A lot of people at Enron put everything into Enron stock and wound up with nothing.
When I started working at the bank, I would go to Yahoo Finance and go to the page about the company, and I would read articles about it. I would also look at CNN Money and other news sites. CNN Money and Motley Fool both had sections about getting your financial life in order. The steps were pretty much the same: pay off debt, build up some savings, and invest.
For investing, both advocated index funds.