by Sarah Eadie

Getting Out of Credit Card Debt: Randy’s Simple Story

With the help of Simple, Randy paid off $16,000 worth of credit card debt between eight accounts in just two years. Here’s what he learned along the way.
Getting out of Credit Card Debt

A few years ago, Randy had a consistent pattern of spending outside of his means. He’d never been taught how to budget or how to create positive financial habits. The topic of money was overwhelming to him, so he chose to just ignore his actual account balance, and kept spending like he could.

He’d been accruing debt over the last several years and as it was piling up on different credit cards, he just kept opening accounts. He was also paying off a few personal loans and had just bought a brand new car (looking back now, he says he would’ve slapped himself for that decision).

In total, he had five credit cards, two personal loans, and a car payment. He was paying about $2,000 a month in payments, with a much smaller amount leftover for his actual expenses. He’d make his minimum payments, spend the money in his account, charge more on his credit cards and wait for his next paycheck. It was a familiar cycle, and his spending was eating him up and stressing him out. But he kept doing it.

Getting out of debt with Simple testimonial

Giving Simple a try

When Randy joined Simple back in 2014, he’d never really managed his money before. A friend had told him about how he could bank and budget within the app, so he opened an account to see what it was about. Once he saw how easy it was to use, he was intrigued and deposited a bit of money. But it wasn’t until 2017 that he moved all his money over to Simple and finally started to make behavioral changes that would drastically impact his money habits.

In January of 2017, Randy made a commitment to himself to get his finances in order. He started to visit Simple’s website, learned about our features and read our blogs posts (we’re not making this up and we didn’t pay him to say that). He decided enough was enough.

He read a few articles that talked about having an Emergency Fund, something he’d never had before. He learned that nearly 60% of Americans aren’t able to cover an unexpected $1,000 expense. He was baffled to find out how many people were like him and didn’t have a plan in the case of a financial emergency. That really spooked him, and he finally decided to take action.

A month after doing all his research and deciding to get a handle on his finances, he lost his job. Randy knew that he’d hit rock bottom. He was $16,000 in debt, couldn’t collect unemployment, and needed to reach out to family and friends to cover his costs.

“It was a really humbling moment,” he said. “I couldn’t ignore my finances anymore. I was embarrassed but I was more determined than ever to make a change.”

A two-year sprint towards debt freedom

Eventually, he found another job and dedicated the next 24 months to becoming completely debt-free. He knew it would require discipline, a shift in behavior and saying “no” to some things he would’ve previously jumped on.

To get started, he set money aside for his expected expenses each month. Shifting his focus to his expenses, instead of his credit card debt, helped him see what he could be cutting out and which expenses were completely unnecessary. This helped him find extra money to help him pay off his debt faster.

He also used Goals to put money aside for his debt (this was before Simple Expenses launched), and found joy in seeing the funds accumulate. In addition to his standard monthly payments, he started a Debt Goal that he’d contribute to daily.

Every three to four months, he’d take that amount and apply it directly to whichever account was closest to being paid off. “It became a passion project,” he said. “It was almost addicting to see the money pile up rather than be deducted from my account.”

And for the first time, he was forcing himself to live below his means. Any extra cash he had at the end of the month was an additional payment to a credit card. After he paid off one card, he’d look at what that payment was and add it to another account (in a debt repayment strategy called the snowball method). Pretty soon, he was making some real progress.

“I realized Simple had been giving me all these free tools, but I just wasn’t using them before,” he said. “All it took was me making a mental decision to change the way I was behaving.”

Planning for a bright future

Right before the start of 2019, Randy became completely debt-free. He’s built new habits and admits he’s made a complete 180 degree shift in how he approaches money.

A few years ago, he never knew if his card would be declined or not when he went to make a purchase. Now, he’s worried if he has enough in his Emergency Fund. He’s earning a high interest rate on his Savings Goals and isn’t embarrassed to admit he’s got $10,000 stashed away in there. He’s inspired his partner to become debt-free too and she’s using Simple to make that happen by the end of the year.

Congratulations on everything you’ve accomplished, Randy. We’re so happy to have played a part in helping you achieve that debt-free life!

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