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Getting into debt is sadly an inevitable part of life. Easy to get into, and hard to pay off. Luckily, though, we have help with debt payoff through the use of phone apps!
Today, I’m going to be walking you through my favorite debt payoff planner app, cleverly titled “Debt Payoff Planner”.
This app is very helpful and super simple to use. Once you create a free account, set up is easy.
1. Add all your debts
This is the scary part. I know, going through each and every one of your debts is going to give you a headache. But, you have to know your starting point to get your debt payoff.
Go through your debts, add them in and make sure you know the interest rate as well! Give them an easy name you’ll remember and if they have a minimum payment as well. I also recommended giving them a category, and a due date.
You can’t set reminders on this app unless you pay for it, but the due date is still helpful!
2. Organize your debt
Now, you can see all of your debts and you can organize them in any position you want. In each box, you can see a progress bar, when you made the last payment, and if you’ve set a due date on these as well. That’s why I say set a due date is still important even if the app doesn’t send a reminder to your phone!
3. Create a plan
This can be done easily within the app itself. If you scroll all the way to the bottom, you’ll find you can create a plan. There are multiple different ways you can use too.
In the strategy section (shown below), you can see that my minimum monthly payment for debt is $499. I can decide if I want to pay more than the minimum required and it will factor that amount in as well.
This is where you can choose what method you’d like to pay off your debt with. APR high to low, Balance low to high, or as listed.
Whatever option you choose will change the plan below. I personally use one of the options they offer.
But if you have your own method for paying off debt, you can change around the order of the debt you have listed above and then just choose “as listed”. You’ll now have your own personalized plan to follow!
This is the scariest part of the app. You can see all of your debt added up into one place. This part gives you an overview of how much interest you’re paying when you will be debt-free, how much you will pay over the time of your loan and how much interest.
The section I find most fascinating is the “Debt-free on” line. Because you can play around with your debts and how much you want to pay, and the methods to try and make your “debt free on” date as low as possible.
This will show you your debt in categories, based on how you categorized it in the beginning. This is why I say even though the category is optional, its a good idea to use!
This is by far my favorite part of the app.
This section here is your personalized payoff plan. Let’s break it down.
-It labels each step for you and tells you how long to take it for
-It tells you what bill you should be paying, and how much
-You can also see when bills will be paid off if you follow this plan
So let’s take a look at my first payment here. Because I have my debt payoff to be the highest APR first, that would be my credit card.
It wants me to pay $119 to my card. Then, you can see it says 8 minimum payments. If you know what your minimum payments are, you can just pay them. But, if you’d like to see them all laid out, just hit the + button to see what they are.
You can see I have to do this for 1 month. Then, step 2. Duration is for another month. They want me to pay $195 for my credit card again and then $23.92 for my neuro clinic (medical bill).
Problems with this app
There are things that this app can’t do, and that’s why, while I do encourage you to use this app to get an idea of a good payoff plan, I recommend you keep a more detailed version of your budget in a spreadsheet or notebook.
1. Paying Interest First
So, for example, I have a very big student loan. Based off of the 2 years I went, my loan is technically split into two different loans. Two sums, two different interest rates. This loan has been sitting and collecting a very high-interest amount.
Due to the specific loan company my school chooses (which was unfortunately out of my hands) I am only allowed to pay the interest first before I can even touch the principal balance of my loans.
So, I added my two separate loans (their principal balance) with my two separate interest rates into the app and do I make payments. However, on the app, it doesn’t look like I’ve made a single payment since all of my money is going towards the interest, and not the principal.
This messes up the plan on the app, but there isn’t anything I can do about it since I can’t add the balance of the interest for the loan anywhere on the app. So, to keep track, I use my own budget plan for those debts.
2. Variable Income
This app bases your plan off a consistent income. It will assume that every month you have enough money to make the minimum payment to all of your loans (so for example, mine is about $500).
This app doesn’t factor in is a few things;
- Other bills that aren’t technically “debts” i.e utilities, gas, rent
- You might not make a consistent income
- you might not make enough to pay the minimum balance on every loan
Whether your income isn’t consistent because you work from home, you have a side hustle to bring in extra income, you do something as unpredictable as waitressing, or your hours get cut for the week (say you work in retail and your boss sends you home on a slow day). This app isn’t able to account for those things.
For some people who have a consistent 40 hour work week, this may not be a problem but for some, it is.
That’s pretty much it for the free version of this app! There are other things you can play around and access and even more with the free version, so you really don’t need to pay for more!
At the very bottom, you can find some resources to help you out of your debt, which is another really cool feature of this app, if you’re interested!
If you have no idea where or how to start a budget, I recommend giving this app a try. It is a great starting point, and despite these things it doesn’t factor in, I use it every time I go to pay my bills.
I just try to edit the numbers to match my bills and own personal budget every week so I can see my progress regardless.
I also highly recommend you start your own budget that can be more personalized and flexible to fit your needs and pair it with this awesome app!
What are your methods for paying off your debt? Let us know in the comments below!