One Money Design

So many people want to get out of debt, but find it hard to get their debt organized in such a way it can be managed. In other words, they really aren’t sure of the benefits of paying an additional amount on their debt each month. Or, they really have no idea when they would be debt free based on paying the minimum required payments or above the minimum payments each month.

I recently came across a FREE online tool called DebtGoal which does most of the work for you. It enables you to set up a debt plan and manage to a consistent payment schedule.

As with a carpenter, you have the right tools in your belt to manage wisely. Upon first look, DebtGoal appears to be one of those essential tools that will help you eliminate debt.

Here’s what DebtGoal says about having a plan:

Research shows that if you don’t have a well-defined plan for reducing your debt, you’re likely to simply make the minimum payments suggested by your financial institution. You may make additional payments from time to time, but it’s often just easier to just pay the minimums. However following a plan instead of making minimum payments will dramatically reduce your interest costs and the time you spend in debt.

After experimenting with DebtGoal I’m convinced this is a tool that can help someone get a plan together and work their way out of debt!

I recently took the opportunity to explore this tool and below are some of the features that caught my attention.

DebtGoal features

Manually add or automatically add accounts

You can either download your account information or transactions from the financial institution or add them yourself. I chose the manual route to see how quick it was to add a debt and it didn’t take any time at all. The automated route would be nice to save you the time from entering all of your debt information and finding the paperwork necessary for this task.

Adjust your monthly commitment with a slider bar

I really like this feature. DebtGoal shows the minimum payment, but you can use a slide bar to increase the amount you plan to pay over the minimum. DebtGoal recalculates your Debt Free Goal Date based on the new commitment. It gets exciting to see the Debt Free Goal Date and motivating to see the time shorten by committing more to your payment.

DebtGoal decides which loan your commitment will be applied

The logic DebtGoal uses is to pay the highest interest debt first. I’m neither for nor against this approach. In fact, I typically recommend people to pick the first two lowest balance loans and pay them off first (if they can do it in relatively short time) and then tackle their loans by way of highest interest rate first. I recommend this approach because paying off a couple of loans builds momentum and confidence.

View future balances

This is a cool feature in that you can see your total future debt balance by month. Nice to see a visual bar chart of your balance decreasing the further out you get in your plan.

Add a payment or automatically download

As with setting up your accounts, you can add a payment manually or set it up to download from your financial institution. You may want to auto download to save time.

View payment schedule

The payment schedule breaks the plan down into more detail. With the payment schedule you can see the payment amount each month, your calculated principal balance, interest paid and remaining balance.

Accelerator actions provide more options

The accelerator actions are recommended actions you can take outside of your debt plan. By following these actions you can modify your debt plan with a one – time payment or increase your monthly payment. One example of an action is negotiating credit card interest rates. Note: I didn’t experiment with these too much, but it appears DebtGoal will provide recommended steps to take associated with each action.

As I mentioned, the first step in getting out of debt is getting organized. This is the hardest part for most people. As a suggestion, set aside a few hours this week to set up DebtGoal and let it do the rest as far as keeping your payment schedule organized. You can finally check off your money management list that you have a plan to get out of debt. Oh, don’t forget to circle the day on your calendar in which you’ll be living debt free!

Have you had any experience with DebtGoal?  Let us know your thoughts in the comments.

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