When our credit card debt reached $32,000, my husband and I realized that a change was necessary. In 2018, we found ourselves burdened with nearly five times more credit card debt than the average American household. Therefore, we made a resolution in early 2019 to abide by a simple rule that we called “Consumption.” By spring 2019, we had successfully paid off our smallest revolving balance credit card and were completely debt-free by 2021.
Every Sunday evening, I would empty my purse and organize the receipts from the weekend. This ritual often triggered tension in my neck and shoulders, causing me to feel stressed. It was evident that I was overwhelmed, and with good reason.
In 2018, I was in my late twenties, married with three children, and grappling with a $32,000 credit card debt, which was significantly higher than the national average of approximately $6,832 at that time. Our spending habits, combined with accumulating interest, continuously escalated our debt. We were clueless about how to address this mounting burden, and my inability to curb my spending only exacerbated the situation.
During our toughest times, I resorted to relying on future incomes to cover my current expenses. I would reassure myself that the paycheck I anticipated in a few weeks would be sufficient to pay off my weekend splurges. Despite making significant lump sum credit card payments, I would inevitably find myself swiping my card for essential items like groceries.
Our expenditures primarily consisted of essential household items such as groceries, toiletries, and cleaning supplies, but we also indulged in luxuries like dining out, designer goods, and high-end cosmetics. Both my husband and I came from modest backgrounds where luxuries were scarce, and we were ill-prepared when we obtained our first credit cards during the era of social media influencers and YouTube hauls, lacking the necessary financial literacy.
I knew that a mere increase in income would not resolve our financial woes. My husband was already juggling two jobs, and my salary was largely allocated to daycare expenses. We recognized that a fundamental shift in our spending habits was imperative to overcome our debt.
In 2019, inspired by Marie Kondo’s popular Netflix series “Tidying Up with Marie Kondo,” we set out to declutter our possessions and reduce our spending. We transformed this endeavor into a game that we dubbed “Consumption.” The concept was straightforward: we pledged not to purchase any new items until we had fully utilized our existing stock. This rule not only curbed our spending but also helped us declutter our living space.
Items that were difficult to consume, such as clothes that no longer fit, were sold on Facebook Marketplace, with the proceeds directed towards debt repayment. Gifts with purchase and other unused items were donated to local shelters.
As the year progressed, the excitement of making an online purchase was replaced by the satisfaction of finishing a product or making an extra payment towards our debts. I vividly remember
Before discovering Consumption, our income was a modest $4,000 per month, and nearly half of it was being frittered away on unnecessary purchases. However, once we engaged with the game, it became apparent that we had the means to allocate an additional $100 each month towards chipping away at our credit card debt. We adopted the snowball method to tackle our outstanding balances, starting with the smallest revolving credit card debt, which we successfully paid off by the spring of 2019.
With newfound motivation and a clearer financial strategy in mind, we delved into addressing the larger balances using the snowball effect, a technique we had gleaned from Dave Ramsey’s acclaimed book, “The 7 Baby Steps to Debt Freedom.” By the time 2021 rolled around, we were proud to declare ourselves debt-free, a status that we have diligently maintained to this day. The lessons learned from Consumption have not only influenced our past financial decisions but continue to shape our present and future financial behaviors.
The positive impact of our financial transformation extended beyond debt reduction. For instance, by 2022, I was able to graduate from college without the burden of student loans, having covered the $28,000 tuition fees through a combination of cash payments, grants, and scholarships. Building on this momentum, we established an emergency fund, a brokerage account, high-yield savings accounts, and diligently contributed to retirement accounts to secure our financial future.
Embracing a proactive approach to financial planning, my husband allocates 16% of his income towards his 401k, ensuring a robust retirement savings strategy. Additionally, we consistently set aside 20% of our net income each month towards various savings goals. Furthermore, our disciplined approach to mortgage payments has put us on track to settle our mortgage two decades ahead of schedule, underscoring our commitment to long-term financial stability.
Beyond the tangible financial milestones, the impact of our newfound financial habits permeated every aspect of our lives. Our home transformed from a cluttered sanctuary filled with excess possessions to a streamlined space that fosters peace of mind and clarity. Personally, the mental weight of financial uncertainty has lifted, allowing me to approach each day with a renewed sense of purpose and focus.
Not only have our financial habits improved, but our relationships and overall well-being have also flourished. As better neighbors and happier parents, we have found a profound sense of fulfillment in living a debt-free and financially secure lifestyle. The once-constant stress and anxiety surrounding our financial situation have dissipated, replaced by a sense of peace and confidence in our financial decisions.
In reflecting on our journey, it is evident that the lessons learned from Consumption have transcended mere financial management and deeply influenced our values and priorities. Every financial decision we make today is grounded in the principles instilled by the game, ensuring that we continue to make informed choices that align with our long-term goals and aspirations.
