Did you know that the average person in the U.S. has personal debt topping around $38,000? And that’s not even including the hundreds of thousands one might owe for a mortgage!
Whether you’ve maxed out credit cards or have a high auto loan, it can feel impossible sometimes to escape your debts. To make the task easier, you have a solution in the form of a debt tracker. This tool keeps track of all your debt accounts and offers numerous benefits.
Read on to see four reasons you should use a debt payoff tracker.
1. It Gives You a Clear Picture of What You Owe
When you have many accounts, trying to keep track of credit card and loan statements can get tedious. A debt tracker makes the process less painful since you can simply update a single form or page with your starting and ending balances and payment amount each month.
At a glance, you can see what you owe. This can help you decide whether to consider a debt consolidation service, which you can read more details about.
2. You’ll Be More Motivated to Pay Off Debt
Since paying off debt usually requires short-term sacrifices, you want to avoid becoming unmotivated and giving up. A debt tracker helps prevent this since you can visually see your progress at any time.
As the months pass, you’ll see your balances fall to zero and know your hard work paid off. You can also use the debt tracker to jot down some small rewards for each goal you reach.
3. It Can Help You Prevent Missed Payments
Have you ever missed a payment since you forgot about that card you rarely use? To avoid late fees and damage to your credit, you can use a debt tracker to stay on top of which bills you’ve paid each month.
Alongside putting the payment amount, you can state the due date for each account. You can also add a checkbox to tick off each bill as you pay it.
4. You’ll Find It Easier to Make Goals
When you have all your debt info in one place and know exactly how much you owe, it becomes much easier to determine how much extra you can pay to reach your debt payoff goals. For example, you can look at your largest debt and tackle it first, or you can find the debt with the highest interest rate and work on paying it off.
At the same time, you can think about how paying off your debts will help you reach other financial goals such as buying a house or investing in retirement. The sooner those balances go down to zero, the sooner you can begin saving for what pleases you!
Start Using a Debt Tracker Today
If these debt tracker benefits interest you, why not try using one? You can find several spreadsheet templates online, download debt payoff apps, or even make one using a pen and paper.
Be sure to keep your debt tracker updated as your balances change. You’ll also likely want to update your estimated payments as you pay off debts and can afford to contribute more to other accounts.
Be sure to go check out our other posts about managing your money.