Paying off debt is a great financial goal, and some of you have been using Goodbudget to track your debt with Debt Balance Envelopes. That workaround was messy, and it required you to make a payment in two steps. Now, you can use Debt Accounts to track your progress.
Using Debt Accounts will streamlined debt tracking. You’ll be able add your debt payments with a single transaction, and track your progress and payoff date in reports.
If you’ve been using Debt Balance Envelopes, here’s how you can convert your existing Credit Card Account and Payment Envelope into Debt Accounts and Debt Payment Envelopes.
1. Delete your old Debt Balance Annual Envelope
To do this on the website, head to Add/Edit on the Envelopes tab. From there, find your Debt Balance Envelope -- not your Monthly Payment Envelope -- and click on the ‘x’ to the right of the Envelope to remove it. Be sure to save your changes when you’re done.
2. Convert your existing Credit Card Account to a Debt Account
Start by heading to Add/Edit on the Accounts tab. Find your Credit Card Account, click ‘Edit,’ and use the drop down menu to select the ‘Working to pay off’ option.
Next, select your existing Payment Envelope from the Envelope drop down. The Monthly Payment field will automatically pre-fill with your current budgeted amount. Here,you can adjust your Current Balance, Monthly Payment, and add an Interest Rate, if needed. Note that you can link only one Debt Envelope to a Debt Account. You cannot link a Debt Envelope to more than one Debt Account.
Now, you’re ready to save your changes, and you’ll be able to see your new Debt Account, along with its progress bar right on the Accounts tab which represents the balance you have left on that debt.
Once you’ve converted your Credit Card Account to a Debt Account, you’ll be able to add debt payments in one step via the Debt Transaction tab in the Add Transaction modal on the website.
You can also schedule your debt payments to happen automatically each month, like you’ve been able to do with your regular expenses. Be sure to delete any scheduled payments that are envelope transfers and recreate them using scheduled debt payments to link them to your new Debt Account.
And, this method also allows you to run reports on your debt and track payment progress going forward. (Payments made prior to creating your Debt Account will not show up in this report.) Check out the Debt Progress report to see the projected date you’ll pay off your debt.
Pro Tip: If you want your Debt Account so show your overall progress since you started paying on the debt, click here to learn how.