Creating and sticking to a budget may not be fun, but using your smartphone to help you get out of debt sure beats sitting down and updating budget spreadsheets on Quicken and Excel.
With the proliferation of smartphones (74.6 million in the U.S. alone), applications — or apps — for these mobile devices can give debt-laden consumers an added boost.
“You always have your phone with you, so you can make updates to a debt management app whenever you’ve got the time,” says Jackie Beck, developer of Pay Off Debt, an app for the iPhone and Android smartphones.
Younger Americans who grew up in the digital age are particularly comfortable with using technology to handle their finances, says David Weliver, creator of Money Under 30, a blog geared toward Generation Y.
“We grew up with smartphones and use them for literally everything,” Weliver says. While digging himself out of $80,000 in consumer debt, Weliver tried to write down everything he spent, but gave up because he’d often forget his pad and paper. “Now there are literally a ton of apps out there to help you track money,” he says.
Many apps offer the same types of features, such as report generation and the ability to see how much you’d save by tackling the highest interest rates first, so for many users it will simply be a matter of preference. Here’s a sampling of some debt management apps, as well as tips on making the most of them.
Mint.com Personal Finance
Cost: Free
Smartphone Platform: iPhone and Android
Port your Mint.com account to your smartphone, adding your checking, savings and credit card accounts so you can see at a glance how much you have, and just as importantly, how much you owe. Once linked to your bank account, the app automatically categorizes and tracks your spending, and lets you know where you’ve veered off budget.
Credit Card Debt Payoff by PicsAlive
Cost: Free
Smartphone Platform: iPhone
If you’re simply looking to calculate how long it will take to pay off a particular credit card bill, this app will let you figure out how much you should be paying to achieve your goal. While it doesn’t let you track your progress, it doesn’t cost anything either. It’s like having a handy financial calculator at your fingertips.
Debt Free – Pay off Your Debt with Debt Snowball Method by Mobile Innovations
Cost: $0.99; Lite version for free
Smartphone Platform: iPhone
Debt Free lets you organize your debts by category such as credit cards, student loans, medical expenses and mortgages. You can generate payment schedules, determine payment strategies such as whether or not to “snowball” debts according to interest rate (paying off the debts with the highest interest rate first), and run reports that show the amount you owe per category. You can also create and save calculators designed to show you how much you must pay to settle individual loans in a particular amount of time.
Pay Off Debt by Parallel Focus
Cost: $2.99; Lite version for free
Smartphone Platform: iPhone and Android
Pay Off Debt utilizes the debt snowball strategy to tackle debts either by the lowest balance or the highest interest rate first. Using the snowball strategy, you make minimum payments on all but the debt with the lowest balance or the highest interest rate. Once that bill is paid off, you focus on the next debt on your list. The app lets you know how long it will take for you to pay off each debt, as well as the time needed to pay off all of them collectively. You can set payment reminders, and while you have to remember to enter your payments, each time you launch the app and get a glimpse your progress — or lack thereof — you’re bound to get a shot of motivation.
Debt Snowball Pro by Matthew King
Cost: $2.99
Smartphone Platform: iPhone
Like Pay Off Debt, Debt Snowball Pro lets you decide between snowballing payments toward debts with the highest interest rate or those with the lowest balance. While tackling the highest interest rates first will lead you to spend less in interest over time, paying off the smallest balance first may provide a psychological boost. Another helpful feature is the ability to easily see how much more money you’re losing by making minimum payments rather than using the snowball strategy. A payment schedule lets you track your progress.
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