Paying off debt is a great financial goal. You may feel the pinch in the short term, but in the long run, you'll save money and enjoy greater peace of mind. Here we'll look at two options for managing your debt in Goodbudget.
Option 1: Budget just your debt payments
The simplest method is to track your debt payments as a regular expense. If you pay $200 on a debt each month, track it with a Monthly Envelope with a budget of $200. By setting aside your debt payment at the beginning of each month, you'll never find yourself short when the payment comes due.
Option 2: Use Accounts to track the balance of your debt
If you want more control over your finances, we recommend using Accounts to track the balance of your debt alongside your monthly payments. Sign up for Plus to enjoy unlimited Accounts and track each debt separately. We'll walk you though tracking your debt step by step.
Step 1. Create a Credit Card Account for each debt
Click on the "Add/Edit" button on the Accounts tab of the homepage to head to the Edit Accounts page. Here you can add new Accounts to track, or edit the Accounts you already have. To track an ongoing debt, create a new Credit Card Account with a balance that matches how much you owe.
For example, if you owe $2,000 on your Visa, create a new Account called "Visa" with a balance of "2000." Goodbudget subtracts what you owe in your Credit Card account from what you have in your Checking and Savings accounts to show your Net Total on the right side of the page.
Don't forget to click on "Save Changes" when you're done!
Step 2. Create Envelopes to track your balance and monthly payments
Next, click on the "Add/Edit" button on the Envelopes tab to go to the Edit Envelopes page. On this page, you'll make two Envelopes:
A regular Envelope to budget the amount you want to go towards paying off your debt each month.
A Goal Envelope to track the balance of your debt with a budget amount of "0."
Step 3. Fill your Envelopes
You can fill your monthly Debt Payoff Envelope each budgeting period when you fill your regular spending Envelopes.
Click on the "Fill Envelopes" button on the homepage to fill your debt balance Envelope. Just enter how much is owed in the text box on the left. If you owe $2,000, add "-2000" to the Envelope. The bar to the right should turn red to match.
That's it! Now that you've set up your Envelopes and Accounts to track your debt, you're ready to make debt payments each month.