Debts
The Debts section is where BetterBudgets' algorithm really shines. By entering all your outstanding debts, the algorithm can calculate the fastest possible path to debt freedom.
What Counts as a Debt
Enter any outstanding balance that you're making regular payments on:
- ›Student loans (federal or private)
- ›Auto loans
- ›Credit cards
- ›Personal loans
- ›Medical debt
- ›Any other installment debt
Your mortgage is treated as an expense (the monthly payment) unless you're specifically using the early payoff feature.
Adding a Debt
For each debt, enter:
- ›Name — e.g. "Sallie Mae", "Chase Sapphire", "Car Loan"
- ›Balance — the total outstanding amount you owe
- ›Interest Rate (APR) — the annual percentage rate on the debt
- ›Minimum Monthly Payment — the required minimum you pay each month
How the Algorithm Uses Your Debts
BetterBudgets uses a modified avalanche method as its baseline, but the algorithm is more sophisticated than a simple priority sort. It models different allocation strategies — minimum payments on all debts while targeting one, rolling payments when a debt is paid off, etc. — and compares them across your plan's time horizon.
The result is a plan that shows you exactly:
- ›Which debt to target first (and when to switch)
- ›How much extra you can afford to put toward debt vs. savings
- ›Your debt-free date — the month and year you'll owe nothing
Tips
- ›Accuracy matters. Even a wrong interest rate significantly changes the math.
- ›Include every debt. Small balances add up and affect the algorithm's sequencing.
- ›Don't worry about perfection. Rough numbers are fine to start — you can always edit later.