There’s no easy solution to mastering a debt problem. However, thanks to a multitude of recent advances in the industry, it’s simpler than ever to create an effective plan to budget your way out of debt. Take advantage of the low-cost and free options available to gain more visibility into your debt situation. Once you’re comfortable with using a budget, you should be able to find a system that works for you — and that will keep you accountable in your debt reduction goals. Slay your debt with our roundup of the most effective debt budgeting tools.
Money Management Apps
Your goal is to chip away at as much of your debt as you can — so it’s a good idea to look for a debt budgeting tool that’s free, if possible. Mint is one of the most popular and respected apps. Mint will request access to all of your accounts and pinpoint the areas where you may be overspending. You can then create a budget and track your spending, all within the app. What makes Mint an ideal choice when you’re trying to pay down debt is that it allows you to set goals specific to your situation — such as paying off your credit card debt or your loan debt. You will then be able to budget how much additional cash to funnel into your debt that month.
Full-Service Budget Programs
If you feel that you may need a little extra motivation to squash your debt problem once and for all, check out a full-service budgeting program. EveryDollar, the brainchild program of debt management guru Dave Ramsey, offers a user-friendly interface, easy budget creation, and the ability to access your account across multiple devices ($99 a year after a free trial). Another well-regarded option is You Need a Budget, or YNAB ($6.99 a month after a free trial). YNAB gathers your accounts, including credit cards, and highlights areas where you have overspent using credit cards. You can also create categories in your budget for debt payoff, and see your progress in real time with handy charts. The advantage of a paid budgeting program is access to 24/7 coaching and support — which can be invaluable as you work your way out of the debt cycle.
Spreadsheets have remained a budgeting mainstay through the years for a reason. If you’re having trouble creating your own ideal spreadsheet budget, check out the free templates offered by Microsoft Office. It’s a good idea to separate your expenses into fixed expenses (such as your rent or mortgage), variable expenses (like your grocery or water bill), and periodic expenses (your child’s summer camp program). Once you’ve identified the areas where you can save money, then you can apply those amounts to additional debt payments.
Debt Payoff Apps
Seeing the totality of your debt on a computer screen can be eye-opening. Numerous apps are geared specifically toward debt reduction. Examples include Debt Tracker Pro, Debt Manager, and Pay Off Debt. Generally, you enter all of your balances, interest rates, monthly payment amounts, and due dates. You can then track your progress toward paying off the debt. Some apps even suggest the debt payoff method that is likely to be most successful for you, such as the debt snowball method. Features differ among apps — and you may pay more for “premium” features, such as a recommended payment amount for each particular debt, which is offered by Debt Tracker Pro. All of these debt budgeting tools simplify the repayment process, helping you understand your finances and figure out a plan to erase debt.
The Low-Tech Route
While you won’t have the fancy bells and whistles of an app, the pen and paper method can be just as effective. Start by writing down a list of all of your debts. Include information such as the outstanding balance, minimum payment, and interest rate. Then branch out into your specific goals — such as paying off your student loan balance at the end of next year. Make it a habit to write down all of your transactions and see where you can trim some expenses to apply toward your debt. For some people, the old-fashioned approach can make the budgeting process more personal and enjoyable. You’re much more likely to stick with debt budgeting tools that work for you.
For More Help, Reach Out
The right tools to pay down debt can make all the difference. Credit repair can also help you meet your goals. For more information on how Ovation Credit can lend a hand, contact us for a free consultation.