A Step-By-Step Guide to Using Mint.com to Get Out of Debt

get-out-of-debtBeing in debt is a special kind of miserable.

You work extremely hard to bring home a paycheck, only to watch a chunk of it fly out the door each month. Ugh.

Student loan debts can be particularly irritating if they are for a degree in a field where you no longer want to work.

That was the case with my grad school debt, which I eventually saw as “cadaver debt,” or dead weight that didn’t add value or have the prospect of adding value.

A home can appreciate and a car will get you from point A to point B, but debt to pay for a now-useless degree? Dead. Weight.

Obviously not all student loans are like this, because many people still use their degree in some way. But unfortunately for me (and I’m not alone), that wasn’t the case. Once I realized it was “cadaver debt,” getting rid of it became a top priority.

Here’s what I did.

Debt Reduction

I’m a huge fan of Mint.com and using it was key in unloading my debt. In fact, Mint was so helpful for getting my debt in control, I actually wrote a book on how to become a Mint pro, so other people could learn to use this awesome tool too.

The first step is to get a look at all of your debt in one place. I know, it sounds scary, but stay with me.

If you’ve linked everything to Mint, then your loans should already be added. But you can verify or manually add them by visiting your profile on Mint.com and following the instructions to add financial accounts.

Then click Trends->Debts->By Account for a comprehensive view. To see this information on a mobile device, just tap the Accounts section and scroll down to Loans.

Lastly, if you want to verify the student loans you see in Mint, check out the National Student Loan Data System to double check that you’ve added everything.

OK – there’s each debt, staring you in the face. Now just work on one at a time.

If one loan has a significantly lower balance, go after that one first. My balances were pretty even, so I went after the lower interest rate first. But if you can cross off a lower balance faster, go for it.

Getting a win right away is huge because it will provide momentum to keep eliminating loans.

Next you’ll set up a loan-payoff goal by visiting Mint.com (you can’t set savings goals or any goals from a mobile devices) and clicking Goals->Add a Goal->Pay off Loans.

Mint will bring up your loans and allow you to name the goal at the bottom of the screen. Select the loan you want to attack first, fill in the balance and rate info, and on the following screen, move the slider to the right to increase your monthly payments.

As you move right, you’ll see how much interest you save by paying early. Set your new monthly payment and Mint will monitor your progress.

Avoid Future Debt

Remember, that when paying off student or any other kind of debt, your finances need to be in order first. It makes no sense to aggressively pay off stable, low-rate student loans while racking up credit card debt (which is a lot more expensive).

Whether you are looking to spend less or save more (especially for an emergency fund), again, Mint can help. To create an emergency savings goal, head to Mint.com and click Goals->Add a Goal->Save for an Emergency.

Mint will then suggest an amount to save, based on your monthly spending, which you can keep or change. Once you set your amount, follow the steps to link the goal to your savings account (or open a new one), set a date and you’re all set!

Everyone takes a different path into debt, and everyone will have to find their own way out. It won’t be easy, so be sure to take advantage of tools like Mint and The Debt Movement along the way. Once your finances are set, start chopping away!


About the Author:

TimTim Murphy is author of The Mint Manual: A short-cut to mastering and saving money with Mint.com. He is also founder of ApplyMate.com – a job and school application tracker. You can follow him on Twitter @ApplyMate.