Mike is a Bengals fan from Ohio who wound up with $10,000 of credit card debt. Read the story below to find out how he paid off his debt using ReadyForZero.
Months using ReadyForZero: 18
Accounts paid off: 6 of 6
“I definitely attribute my fortunate place and time to having found a tool like ReadyForZero… it was empowering. It gave me a way to get to where I wanted to ultimately be and that is invaluable.”
It’s always a joy to talk with our wonderful ReadyForZero users. We love hearing their feedback about how the tool is working for them and about their challenges and successes as they work to pay down their debt.
It’s really quite amazing to hear their stories.
Which brings us to Mike Rill. He is awesome. Why? Well, for one thing because he’s upbeat, courteous, and super friendly. But in addition to all that (or perhaps because of all that) his experience getting out of credit card debt is extremely compelling and inspiring. After reading his story, we think you’ll agree. And despite how impressive his story is, it contains many lessons that anyone can use to speed them on their own path toward becoming debt free.
Below, we’ll describe his story and the lessons he shared with us:
1. Early career / initiation to debt
Mike was born in Columbus, Ohio and has been a lifelong Bengals fan. He’s also passionate about running, traveling, and staying in touch with his friends and family. While he left town to attend college and later had job offers in other states, the draw of staying close to family brought him back to Columbus, where he now works as a logistics manager for a large automobile company.
That’s Mike at a recent Bengals game. Who dey!
His career and financial life are on track now but it wasn’t always this way.
Like so many young people these days, despite working hard, getting a degree, and being motivated to kickstart his career, he got caught in the debt trap in college and after college. For many recent graduates debt takes hold of them in part because of the increasing necessity of taking on student loans (while tuition and other expenses rise rapidly) and in part because of the challenge of finding a good job in an economy that doesn’t currently provide many opportunities for young people with limited work experience.
These factors contributed to Mike taking on student loan debt and credit card debt during college and after graduation. “When I was graduating from school and first starting out I used credit cards to pay bills,” he told us.
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As we talked with Mike, he recounted a story from that time in his life: “When I first took this job in 2006 to move away from my college neighborhood and come back to Columbus and the suburbs, I had like a $1,000 limit credit card – a starter card that I had for emergency expenses,” he said.
In order to complete the move, he needed to rent a moving van, and on the way back to the rental agency he ran into a problem. “I remember I rented the moving van and I had to fill it up with diesel to take it back to the rental place. I was so broke then that I couldn’t afford to rub 2 nickels together and I called Chase and said can you increase my credit limit? And they couldn’t do it. I thought, ‘Man how am I going to get $50 to put diesel back in this vehicle?’”
Fortunately, in that case his parents were able to loan him enough money to get the moving van fueled up and returned to the rental agency. But he still remembers the feeling of being on the edge financially. “I never forgot that,” he told us.
That same Chase card was charging him a 30% interest rate, which made even harder to pay any of the principal balance off. “If I didn’t need to have it, I would have cut the darn thing up and never used it but it was still there and I needed it for certain day-to-day things I didn’t have the money for back then.”
2. Continuing the credit card habit
With the move to Columbus, Mike’s career started to take off. But using the credit card was still part of his life. And that is true for many of us – once debt becomes something we rely on, it is hard to change habits and remove it from our lives. For Mike, this meant spending money to see friends in other cities and enjoy his new career despite the balance that remained on his credit card. “I was single and had this expendable income and it was easy to think ‘hey I could throw it on my credit card for another month and go to Vegas with my buddies for a weekend or see a basketball game,’” he said.
“I like to take day trips,” Mike told us. “I don’t take a lot of time off from my job but I’m a big basketball fan and when the Boston Celtics were playing in the 2008 playoffs en route to winning an NBA title, my friend would call me and he’d be like ‘hey you want to go here for a day to catch a ballgame?’ I would fly to Boston for the day and go out at night and come back and go to work the next day. That was what I was used to.”
Mike, excited to be attending one of his first Celtics games
“It was all dispensable income,” Mike went on to say. “You just do whatever you want when you’re not really focused on a certain goal. I paid the price for it and probably had more debt on my credit card than I needed. But at the same time I was out there having fun.”
3. The turning point
Eventually, Mike realized that if he wanted to accomplish his long-term financial goals (such as buying a house) he would need to make some changes.
“When it came down to it I said that I really need to decide what I want right now versus what I really want [in the future],” he told us.
And fortunately, at just the right time, ReadyForZero came along. He wanted an ally to help him stay disciplined and make the right decisions. “I needed somebody and something to keep me in check, and sure enough it was divine intervention or serendipity or whatever you want to call it: I saw about this company that was trying to do this for people and help them get out of the chains of credit card debt… and that’s all she wrote.”
With the help of ReadyForZero, he started tackling his credit card debt with a vengeance. He liked how his financial picture became clear when he linked up all his accounts in ReadyForZero. “You have your Chase card and Bank of America card and you just have a bunch of different vendors out there that you’re dealing with and to concentrate them all into one simple to use format to really help you get a better handle on what you’re dealing with – that idea was super appealing to me,” he said.
Mike became as passionate about paying off debt as he is about running
Seeing all his debt in one place motivated him to get to work paying off his high-interest cards. “It [can be] very convoluted and ReadyForZero made it very, very easy to manage and track where I really stood and kind of gave me a great snapshot: ‘hey I really need to buckle down on X, Y, Z expense… I think it was very successful for me.”
4. Making a plan and executing it
With his newfound motivation to become debt free, Mike set up a plan in ReadyForZero that would funnel his extra income toward his credit card with the highest interest rate. “Before I was allocating money to trips and fun stuff, whatever it was, and now the money was being allocated to my ReadyForZero credit card payments. I said I needed to have [a certain amount of] money allocated out each month to throw on my accounts.”
The other thing motivating Mike was his long-term goal. He wanted to eventually buy a house. And he took on a new outlook toward spending money in order to get closer to that goal. Here’s how he described the new perspective: “Okay I’ve got $500. What can I do with that? Is there anything I want to do this month or next week? Are all my other bills paid? The focus then was on the goal – to get a house – and the discipline had to be making payments on the cards first.”
He said he used ReadyForZero to determine when he could spend a little extra money. “The tool is telling you to pay the cards and so you pay them the way it is supposed to be done. Then when you have some leftover then you can do something [fun].”
5. Becoming debt free
In order to reach his goals, he decided to take some extraordinary measures. “It took a lot of discipline,” he said. “I picked up a 2nd job to get some extra money. I was working at a bar downtown and my friends would be out and saying ‘Hey, come out with us.’ I’d be like ‘Hey, I’m working, I’ve got this debt to pay off, I have bills to pay and I want to make this extra money so I can go do something next week.’ It just became an act of discipline and balance.”
Mike at a Tough Mudder race, demonstrating discipline and balance
“I was at a point where I wasn’t using credit very much anymore. It just sat out there stagnant and the end goal was to save up money to get a down payment to buy my first house.”
“I was hitting each of the higher interest rate cards with more money each month and chipping those away and able to allocate more funds to the lower interest payments. I was hitting them before they got me,” he said. “I had about 5 to 6 cards that needed to be paid down in order to achieve my results and that went along with the plan. I had $450 extra dollars a month in my budget that I wanted to use to pay off these credit cards. ReadyForZero said, ‘hey if you’re looking to pay down your credit cards allocate it this way.’ I think I was paying above the minimum on 2 or 3 of them and paying the minimum on two. And slowly but surely the balances started to dwindle.”
Mike appreciated the motivation that came along with the frequent progress updates from ReadyForZero. “When I got an email that said ‘you paid off a card’ or ‘you’re 25% of the way there’ it was really kind of invigorating to see that and think ‘okay, I’m not just throwing money at this, I’m actually making progress.’”
After a year of avoiding excessive spending and working extra jobs to generate more income, Mike accomplished his goal: he became debt free.
“I pay off all my credit cards at the end of the month now because they’re that under control,” he told us. “It gives you a lot of flexibility.”
6. Achieving his goals
And now, with his credit card debt finally tamed, Mike recently accomplished his long-term dream: he bought his very own house. He couldn’t be happier with how his financial story has turned out, and he is happy to share his experience in the hopes that it inspires others to reach their own goals.
He now understands how big of a difference it makes to eliminate those debt payments from your budget. He told us, “Whereas before you’re paying $400 or $500 a month for a credit card, once your balance starts to dwindle then you’re only paying $200 a month. So that extra money you can throw into a high interest savings account… and then you see the money that you were wasting in interest before is turning into big gains.”
He has no patience for the incredibly high credit card interest rates anymore. “Chase is charging you 30% interest because they’re Chase and that’s how they bully you around. So 30 cents for every dollar you borrow is absurd. Then you realize you can actually start paying yourself back for some home equity [instead] and hopefully setting up good things in the future.”
Mike says the biggest difference he feels now is “the sense of freedom. It was like ‘man I can really focus on putting this money away for my house and my future now.’”
So what does the future hold? Hopefully continued financial freedom and maybe even some fun expenses. “Even now, I’m going to be 30 in October and just finally getting to that point where I feel that I’m actually on stable financial ground and not living paycheck to paycheck,” he told us. “Now, I’m not grown up by any means but my financial house is in order. I still have student loans and a car payment but not having to fight the credit card fight every month… it’s very liberating.”
Mike still enjoys traveling, long-distance running, and of course likes his Bengals and Celtics as much as ever. Now that he has reached a place of financial stability, he can take some occasional trips to engage in these things he’s passionate about without feeling guilty or facing years of interest charges on the money he chooses to spend.
Mike and a friend, pausing on the way up the mountain
“I definitely attribute my fortunate place and time to having found a tool like ReadyForZero… it was empowering. It gave me a way to get to where I wanted to ultimately be and that is invaluable,” Mike told us.
We are so glad it helped you Mike! And we wish you the best as you enjoy your newfound financial freedom!