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Get out of debt smartphone apps

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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.

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.

Regardless of what apps you use,
some sound advice applies
  • Try free versions first. Though the average selling price of the most popular apps in the United States is only $1.48, according to mobile analytics firm Distimo, there are many free apps, some of which may be suitable for your needs. Many app developers also offer free lite versions, which let you get a taste of the app before spending your money. "If you're in debt, you don't want to be throwing good money after bad trying to get out," says Gen Y personal finance blogger David Weliver.
  • Persistence pays. Downloading an app and then never using it will not get you out of debt.
  • Don't expect a miracle. While a smartphone app can help you stay on track, it's not going to solve your money problems unless you practice sound financial habits.  "Getting out of debt takes hard work and discipline," says Weliver. "There's no easy way out."

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.

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.

See related: 8 tips to stop banking app fraud, MasterCard releases ATM Hunter app for iPhone

Published: July 15, 2011


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