Feature Overview
The Debt Payoff Tracker helps you create a plan to become debt-free faster.
What is the Debt Payoff Tracker?
The Debt Payoff Tracker is a powerful tool that helps you visualize and optimize your debt payoff journey. It takes your debts—whether from credit cards, student loans, auto loans, or mortgages—and shows you exactly when you'll be debt-free based on your chosen strategy.
Unlike basic debt calculators, the Debt Payoff Tracker integrates directly with your Purpose Budget accounts. You can link existing accounts or add debts specifically for tracking, compare different payoff strategies side-by-side, and record payments that update your projections in real-time.
Adding Your Debts
There are two ways to add debts to the tracker:
Option 1: Link an Existing Account
If you already have liability accounts set up in Purpose Budget (either through Plaid bank connections or manual accounts), you can link them to the Debt Payoff Tracker. This is the recommended approach because:
- Your current balance stays synchronized automatically
- Bank-connected accounts update balances with each sync
- Transactions you record affect both your budget and debt projections
Option 2: Add a New Debt
If you have a debt that isn't yet in your accounts (perhaps an old loan or a debt you want to track separately), you can add it directly. This creates a manual tracking account behind the scenes with two budget mode options:
- Track Only: Best for old cards or debts you're paying off but no longer use. The debt won't appear in your budget's Credit Card Payments section. Create a category like "Discover Payoff" to budget money for payments.
- Include in Budget (YNAB-style): Best for cards you actively use for purchases. Automatically creates a "CC Payment" category. When you spend on the card, money moves from spending categories to CC Payment, showing exactly how much you need to pay off.
Which mode should I choose for credit cards?
- Track Only — Use this for old cards you're paying down but no longer swipe. You'll budget for payments in a regular category you create.
- Include in Budget — Use this for cards you actively use. The automatic CC Payment category tracks coverage in real-time and prevents overspending.
Note: The help text in the form updates based on your debt type selection. Credit cards show guidance about CC Payment categories, while loans show guidance about interest and fee tracking.
Required Information
For each debt, you'll want to provide:
- Debt Type: Credit card, student loan, auto loan, mortgage, etc.
- Interest Rate (APR): The annual percentage rate you're being charged
- Minimum Payment: The minimum amount due each month
- Original Balance: The balance when you started tracking (used for progress calculation)
Smart Auto-Fill: When you select an existing account, the form automatically fills in helpful defaults:
- Debt Type is set to "Credit Card" for credit card accounts
- Original Balance is pre-filled with your current balance
You can always edit these values if needed—for example, if you know the true original loan amount from before you started tracking.
Understanding Payoff Strategies
The Debt Payoff Tracker supports three strategies, each with different psychological and financial trade-offs.
Snowball Method
Pay smallest balance first
The Snowball method orders your debts from smallest to largest balance. You make minimum payments on everything except the smallest debt, which gets all your extra payment dollars until it's gone. Then you "snowball" that payment to the next smallest debt.
Best for: People who need motivational wins. Paying off debts quickly (even small ones) builds momentum and confidence.
Avalanche Method
Pay highest interest first
The Avalanche method orders your debts from highest to lowest interest rate. By attacking the highest-rate debt first, you minimize the total interest you pay over time.
Best for: People who want to save the most money mathematically. If you can stay motivated without quick wins, this saves you the most in interest.
Custom Order
You decide the order
Sometimes neither snowball nor avalanche fits your situation. Maybe you want to pay off a specific debt first (like a loan from a family member), or you have personal reasons for a particular order.
Best for: When you have specific priorities that don't align with balance or interest rate ordering.
Strategy Comparison: The tracker shows you a side-by-side comparison of how much interest you'll pay and how long it will take with each strategy. This helps you make an informed decision.
Using Custom Order
When you select the Custom Order strategy, a drag-and-drop interface appears. Simply drag your debts into your preferred payoff order—the debt at the top gets paid first.
When you switch to Custom Order, the tracker automatically seeds your order based on your current view. This gives you a starting point that you can then adjust.
Extra Payments
The "Extra Monthly Payment" slider shows the dramatic impact of putting additional money toward your debt each month. Even an extra $50 or $100 can shave months (or years!) off your payoff timeline.
As you adjust the slider, you'll see:
- How many months earlier you'll be debt-free
- How much interest you'll save
- Updated projections for each debt
When you find an extra payment amount you want to commit to, click "Save" to store it with your payoff plan.
Recording Payments
When you make a payment toward a debt, you can record it in the Debt Payoff Tracker. There are several options for how payments are recorded:
Tracking Only
Record the payment for projection purposes without creating any account transactions. Use this if you manage transactions elsewhere or just want to update the tracker.
Note: Tracking-only payments don't update your account balances. Your debt projections will update, but the balance shown in the tracker may differ from your actual account balance.
Create Transaction
For manually-created debt accounts, you can create an actual transaction that:
- Moves money from your payment account (checking/savings) to the debt account
- Updates both account balances
- Keeps your budget and debt tracker in sync
Link to Existing Transaction
If you've already recorded a payment on the debt account (perhaps it synced via Plaid), you can link it to a debt payment record. This connects your existing transaction to the debt tracker for accurate principal/interest tracking.
Link from Payment Account
This is useful when you have a synced checking account (with automatic transactions) and a manual tracking-mode debt. Instead of creating duplicate transactions, you can:
- Select an outflow from your checking account that represents the payment
- The tracker creates the matching inflow on your debt account
- Both transactions are linked together as a transfer
Avoiding Duplicates: If your checking account syncs automatically and your debt is manual, use "Link from Payment Account" instead of "Create Transaction". This prevents duplicate payment records.
Deleting Debts and Transactions
When you delete a debt or unlink transactions from the tracker, Purpose Budget handles manual and bank-imported transactions differently to preserve your financial records:
Manual Transactions
Transactions you created manually can be fully deleted if you choose that option. The delete confirmation will show you which transactions are manual and will be removed along with the debt.
Bank-Imported (Plaid) Transactions
Transactions imported from your bank via Plaid are preserved for reconciliation accuracy. Instead of being deleted, they are simply unlinked from the debt tracker. This ensures your bank balance history remains accurate and your account stays reconciled with your actual bank statements.
Why preserve bank transactions? Bank-imported transactions represent real activity on your accounts. Deleting them would cause your Purpose Budget balance to drift from your actual bank balance, making reconciliation impossible. Unlinking removes the debt tracker connection while keeping your transaction history intact.
Understanding Your Progress
Each debt displays a progress bar showing how much you've paid off. The percentage is calculated based on your original balance compared to your current balance.
Baseline Snapshot
When you start tracking a debt, the tracker automatically captures your current balance as the "original balance" if you don't specify one. This means:
- Progress starts at 0% — representing your starting point when tracking begins
- As you make payments and your balance decreases, your progress percentage increases
- If you know the true original loan amount (from before you started tracking), you can edit the debt to enter it manually for more accurate lifetime progress
Example: You add a student loan with a $15,000 current balance. Since you didn't specify an original amount, the tracker sets $15,000 as your baseline. Your progress starts at 0%. After paying down to $12,000, you'll see 20% progress.
Payment History
Click the "Payment History" button on any debt card to view all recorded payments. The history shows:
- Payment date and total amount
- Principal vs interest breakdown
- Balance after each payment
- Whether the payment is estimated or confirmed
- Link status (connected to a transaction or tracking-only)
Payment Status Indicators
Each payment in the history shows status badges:
- Estimated: Principal/interest split was calculated from your APR
- Confirmed: You've entered actual amounts from your statement
- Linked: Connected to an actual transaction in your accounts
- Unlinked: Tracking-only record for projection purposes
Understanding the Timeline
The Payoff Timeline chart visualizes your debt-free journey:
- Remaining Balance: Shows how your total debt decreases over time
- Principal Paid: The portion of each payment reducing your actual debt
- Interest Paid: The cost of borrowing over time
The chart updates in real-time as you change strategies, adjust extra payments, or record new payments.
Visual Indicators
Each debt card shows helpful badges:
- Plaid: Account connected via bank sync
- Manual: Account created manually
- Tracking: Debt is in tracking-only mode (won't affect budget)
You'll also see the payoff order number (e.g., "#1 in payoff order") and projected payoff date for each debt.
Best Practices
1. Keep Interest Rates Updated
If your interest rate changes (promotional rate expires, rate adjustment, etc.), update it in the tracker. Accurate rates ensure accurate projections.
2. Review Your Strategy Periodically
As you pay off debts and your situation changes, revisit your strategy choice. What made sense six months ago might not be optimal today.
3. Celebrate Payoff Milestones
The tracker shows when each individual debt will be paid off. Use these dates as motivation—mark them on your calendar and celebrate when you hit them!
4. Consider Extra Payment Sources
Tax refunds, bonuses, side income—any windfall can accelerate your payoff. The extra payment slider helps you see the impact before you commit the money.
Frequently Asked Questions
Which strategy saves the most money?
The Avalanche method (highest interest first) mathematically saves the most in interest. However, the "best" strategy is the one you'll stick with. If quick wins keep you motivated, Snowball might be better for you even if it costs slightly more in interest.
What if I have debts with the same interest rate?
For Avalanche, debts with identical rates are ordered by balance (smallest first). For Snowball, they're ordered by balance naturally. You can always use Custom Order if you prefer a different arrangement.
Should I include my mortgage?
You can include any debt you want to track. Some people exclude mortgages because of the long timeframe and potential tax benefits. Others include them for a complete picture. The choice is yours.
What about minimum payments?
The tracker always assumes you'll make at least the minimum payment on each debt. Extra payments are applied to the "focus" debt based on your chosen strategy.
Ready to Start Your Debt-Free Journey?
The Debt Payoff Tracker gives you clarity, motivation, and a concrete plan. Add your debts, pick a strategy, and watch your debt-free date become a reality.