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4 tools to help you get out (and stay out) of debt

Get a jump-start on your 2018 financial resolutions with these digital apps and tools.
by Jean Chatzky /
Image: Swiping a credit card
A golden rule of personal finance is to spend less than you make, but sometimes, credit cards can tempt people into doing just the opposite.Shutterstock
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Almost $13 trillion. That’s the eye-popping figure for total household debt as of September 30, 2017, according to the Federal Reserve Bank of New York. To put that in perspective, the former record was set in the first quarter of 2008, right before the onset of the financial crisis. Credit card debt, auto loan debt, student loan debt and mortgage debt are all on the rise (and while home equity loans and lines of credit decreased slightly, borrowing is projected to ramp up significantly in the next few years to come).

If you’re one of the many resolving to get a handle on your debt in 2018, starting now could give you a significant head start. The good news: You don't have to do it the old-fashioned way. Here are some tech tools to help you reach your goal.

1. Make an actionable payoff plan: Unbury.Me

The aptly-named Unbury.Me is a free online tool that allows users to create an account, list all of their debt and map out a payment plan to suit their needs. (The tool offers both the “avalanche” method (attacking the highest interest rate debt first, then moving to the second-highest and so on) and the “snowball” method (focusing on the lowest balance first, then the second-lowest and so on). The first technically saves you the most money in the long run, but the second could be the right choice if short-term wins increase your long-term motivation to funnel more money to your goal. The tool also demonstrates the effect of solely paying the minimum versus doubling up on payments one month, says accounting technologist Louie Balasny, accounting technologist at botkeeper.

2. Attack debt subconsciously: Qoins

The team at Qoins focuses on rounding up each of your purchases to the nearest dollar (much like the investing app Acorns), then applying that cash to your student loan or credit card debt. Almost $1 million in spare change has been saved since the app launched in January 2017, and on a monthly basis, the average user saves roughly $50 to $55 (or $600 plus a year). To get started, you sign up, then link your financial account to begin saving. (Note: The app costs $1.99 a month, but it takes the fee out of your savings pool rather than charging your card.) For users who are patrons of smaller financial institutions that aren’t supported, Qoins has an algorithm that analyzes your checking account and pulls out small amounts of money to save daily on your behalf (usually between 50 cents and $5).

3. Meet payoff goals via savings goals: Digit

One great strategy for paying off debt is being able to do it without having to think about it. Digit is an app that analyzes your spending habits to gauge the right amount of money to auto-save for your goals (usually anywhere from $5 to $100). It only transfers an amount it thinks you won’t notice, and the cash is moved from your checking account to an in-app savings account. There’s also a no-overdraft guarantee. Note the app (available on iPhone and Android) costs $2.99 a month, but median monthly savings are $110 per user. A key perk: You can set a goal amount for a certain debt (denoted by a relevant emoji), and once you’ve amassed that amount in savings, it’ll notify and congratulate you. Then, you funnel that amount of cash right towards paying off that particular debt.

4. Avoid future debt by rethinking credit: Debitize

A golden rule of personal finance is to spend less than you make, but sometimes, credit cards can tempt people into doing just the opposite. If you’re aiming to pay off credit card debt, it’s a good idea to put your plastic in a drawer and lock away the key until you’ve reached your goal. But if you’ve got debt of another kind — or you’ve recently paid off your credit cards — Debitize is an app to help you avoid racking up more. It’s currently free for iPhone users and will likely launch for Android in 2018. The app helps users think of credit more concretely by automatically withdrawing the funds to cover any purchase you make immediately — then paying the balance off on your behalf within a day or two. Users finish out each month with a card balance of zero. Another perk? Debitize always sends in an extra payment before your utilization ratio is reported to the credit bureaus, decreasing it to 1 percent of your credit — which will likely increase your credit score.

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