Three Fabulous Financial Tools I Used to Get Out of Debt Quickly ( & I still use them today!)

There are 3 online financial tools (only 3!) that have withstood the test of time, a growing family, our changing needs, and our complete financial journey. Quite honestly, diving into any online financial tool is an endeavor. It can take hours to link accounts, remember usernames and passwords, set up an online budget within the app, import transactions, and then categorize them.

Listen on iTunes | Listen on Spotify | Listen on Stitcher

I know I’m not the only one who’s done all of this work in an online platform, only to figure out that I didn’t even like the app.

Well, cheers mama, because today, I’m spilling the beans on which online tools I used to help me claw our family out from underneath all that debt AND that I still use faithfully today. After reading this post, boom, the mystery will be solved (ha ha) and you’ll know just what to do.

As you read through this, I encourage you to pause every once in a while and think about if these tools and some of the habits I mention would work for you and your family.

It’s important that you decide if these are some things you would consider implementing and then actually take action on what you learn. How much do you think that would make a difference in your financial life? 

Wanna Listen to This on YouTube?

A Little Background

Over the course of the past several years, our needs and goals morphed and changed depending on how many people were in our family, our income, the total value of our debt, and even the ages of our children. We went from being very comfortable with our finances as newly weds, to drowning in 80K of debt, to debt-free, and beyond, all just within the past 5 years or so.

Throughout this time, the most dramatic and most impactful period in our lives was definitely during our rock-bottom portion of our financial journey.Out of necessity, I became obsessed with the world of personal finance – there were so many books that I read, podcasts that I listened to, and so many websites and apps and methods and ideas that I tried. Some worked and some didn’t.

As I remember all the options I explored, like bankruptcy and consolidation / negotiation companies, and all the financial tips, tricks, and apps that I tried, there are few that not only survived the debt-freedom journey, but also have proved themselves as continuously useful years later.

How to Find the Best Financial Products

The first tool I highly recommend is called magnifymoney.com. It’s a simple to use website where you can easily find and compare credit cards, loans, and bank accounts. This is useful when you’ve decided you want to seek out a balance transfer deal, personal loan, or cash-back credit card offer.

The best way I’ve been able to make use of Magnify Money though, is when I was first figuring out what the heck an emergency fund was and why I needed one. I jumped online and searched out a fee-free checking account and an interest-earning savings account.

I found an A-rated, high-interest earning, online savings account with no minimum balance where I could start to stuff $50 – $100 at a time to begin building my rainy-day fund. I’ve used magnifymoney.com off and on over the years for different things, and each time, I’ve been really happy with the list of options presented and the financial products I’ve used.

One of the best things about Magnify Money is you don’t have to enter a ton of personal information just to see your options. All you have to do is enter your zip code, select which product you’re looking for, and boom, a list of options comes up. You can sort the rate (looking for 0% interest?) or the duration (how many months the promotional rate is valid) from highest to lowest.

The best feature of all, is each financial product listed in your search results is given a rating from A-F. An A rating means the credit card or loan terms are really transparent and easy to understand and, of course, an F means that the terms and conditions are extremely complex.

I, for one, am all about simplicity and clarity. So, I’d only pick financial products that are A or B rated. I want to minimize the chance that I could miss a detail and screw something up.  

Learning About the Importance of Net Worth

As our financial journey progressed, I learned about and started focusing on our net worth instead of any of the other “important” numbers that we tend to get distracted with. Based on the tiny bit of financial education I’d gained from my family and from school, I’d been (wrongly) focused on our credit score for years.

As I read more personal finance books, broadened my horizons with podcasts, and really just dove into personal finance education head-on out of desperation, I learned that net worth was actually the number I should have been focusing on all along.

Net worth is the value of everything you actually own minus the value of everything you owe. For example:

your home value

+ car value

+ total in your retirement savings

– your credit card balances

– vehicle or personal loan balances

– mortgage balances

___________________

Net Worth

Around the time I began to learn about net worth, I discovered mint.com. It’s a completely free website and app on which you can link your accounts and view your credit score, spending patterns, and…my favorite – your net worth.

Mint is often recommended as a budgeting tool, and while it does have a feature in which you’d create categories and set limits, I decided it was not my favorite tool for budgeting.

What I do love about the app though, is that you have all your information on one screen, in one program. Once you get everything linked and imported, you have the ability to see every account, it’s balance, your spending patterns, your net worth, your home’s value, your credit score… a complete, up-to-date, accurate financial picture.

When I was just barely beginning to get a grip on my finances 5 years ago, mint helped me see the big picture and track our spending easily. In time, an established habit of logging in to review spending patterns and double check balances on my accounts allowed me to also watch my net worth creep upward as we paid down debt and built our savings. Even now, ever since we got debt free, I still log in once a week – I love to watch our net worth grow!

The Best Budgeting Tool

The third, and final, and BEST financial tool of all is an awesome budgeting app called You Need A Budget, or for short, YNAB. I tried other budgeting apps – Every Dollar, Goodbudget, Clarity Money, and even Mint –  I didn’t like any of them as a budgeting tool as much as I like YNAB.

I mentioned earlier that Mint has a budgeting feature and that it didn’t really work for me – this is because during our journey to debt freedom I struggled HARD trying to figure out how to budget. Month after month we’d go over budget and I just couldn’t figure out what I was doing wrong… until I found YNAB. I discovered the fact that there’s a wide gap and a huge difference between budgeting and tracking.

Most other “budgeting” apps let you set limits in categories and import your transactions. But you’re focused on the balances and categories after the money has been spent. This is actually tracking, not budgeting. I know it sounds silly, but the thought had never occurred to me before that budgeting is something you do on the front end – it’s the plan. You make this plan before you even have the money. 

Tracking is what you do after-the-fact. When you pull in all the transactions you’ve made, categorize them, and see how much you spent in each category, that’s tracking your spending.

YNAB is different because as you create your budget, within the app, it subtracts that budgeted value for each category from your balance. So, you’re no longer setting up a budget and then looking at your checking account thinking you still have money. You can very clearly see at the top of the screen how much money you have left to budget.

The whole point of YNAB is to help you get debt free and begin to use previously-earned money for today’s expenses. The problem with using credit cards is that this month’s cash and this month’s paychecks pay off things you bought last month – so you’re always running a month behind. It doesn’t make sense to earn the money after you’ve spent it, yet that’s what most Americans do.

By keeping a running total of the cash you have minus what you’ve budgeted into each category and by displaying the “age” of your money, it’s easy to shift your focus onto retaining your money for longer periods of time and remaining under budget.

Maybe you’ve seen my  instagram  or  facebook  posts and have been interested as to how we spend only $60-$80 each week on groceries?

Well, YNAB plays a large role in that – we learned, over years of using You Need A Budget, how to be extra frugal and make things work.

YNAB is not a free application, but if you click any of the links throughout this post, you and I will both get a free month of use, now that’s awesome 😉  Hear me out here: Anything worthwhile is going to a) cost money and b) take time.

Like other apps, you’d want to connect your accounts and import your transactions. There is a bit of a learning curve to really understand how to use YNAB though, so I suggest really taking some time and watching some YouTube videos and learning the ins and outs of the program. It’s worth every hour and every penny.

Once I spent some time with the program to learn how to use it, within a couple of months, we had completely flipped our money around and were paying for this month’s expenses with money we had previously earned which was mind-blowing for us at the time. Boom. No more backward money.

A Little Tip

Choose one of these tools, the one that sounds like it most applies to your situation at this time, and set aside an hour or two this week to create and set up your account.

Don’t make the mistake of trying to dive into YNAB and Mint all at once either. I’m trying to help you avoid overwhelm here. Set a little “date” for yourself, maybe with a hot cup of tea or a glass of wine, and allow yourself an hour or two to just learn one of the applications. Take the time to set things up properly, link accounts, and import transactions.

Sit back and watch a couple of YouTube video tutorials before you get started so that you can potentially avoid the frustration of learning a new platform. Think about it, if this is a tool you plan on using to help you navigate toward a better financial life for years into the future, a couple of dedicated hours to set up the program properly is well worth the investment.

For many people, once they get all their credit cards, bank accounts, loans, etc. connected, they tend to experience a little “come to Jesus” moment. It can be shocking to see everything on one screen with a blaring total at the bottom.

Take a breather here and realize that, THIS is WHY you’re here. You’re seeking a more abundant life. For some people that may mean taking on a mission to simplify, pay off debt, or just increase their awareness around where their money is going each week.

Figure Out What Works Best for YOU

Drowning in debt or debt-free, it doesn’t matter, these tools have been useful and valuable to me for 5+ years. With these three tools combined, lots of intention and consistency, and three years’ time, I was able to pay off 80K in debt.

I logged into mint consistently every week during our rock-bottom, and now I just pop in there once a month or so. When we were really tight on money, I logged into YNAB nearly every day – and for sure, every-other-day because things were just that intense.

Once we started making progress paying down debt, I got to a point where I could just log in once a week. However often I needed to transfer a balance, (which I was cautious about, because there are definitely dangers associated with balance transfers) I’d log into Magnify Money and seek out the best deal possible.

When you do anything with a conviction and a passion, over and over, for years on end, there’s no other possible result but to be successful.

That’s what I did to our debt. I know that if you’re struggling with your finances, no matter your situation, you have the power to turn things around. Whether it takes 6 months or 3 years (like my journey), I believe in you.

Hopefully these tools will come in handy for you too. Edge toward reaching abundance by focusing on the life you WANT and then finding and using , with consistency, tools to help you achieve those goals.