I’ve always thought that Mint’s Goals feature has been one of its coolest features to play around with. However, it didn’t take long to realize that it would be even better if Mint had the ability to link these goals to actual accounts you have. Mint allowed me to link particular accounts with my savings goals so that I could have a travel savings account and plan my savings for a trip or car in the future. However, Mint didn’t allow users to link debt accounts to these goals. That was, of course, until this month. Mint has finally implemented a new goals feature for paying off debt. Mint will allow you to choose to Pay off Credit Card Debt, or Pay off Loans.
If you’ve been using Mint, then it’s likely that you already have your credit card and loan information set up. When you click on one of the two debt-related goals, Mint will pull up your accounts related to that type of debt. When I clicked to set up my goal to Pay off Loans, Mint.com pulled up the following accounts:
This is what remains of my student loans. Mint populated the remaining balances, as well as the monthly payment amounts, from my account information. All I had to do was verify the info and press Next.
On the next page, Mint gives you a neat slider where you can choose the payments to set for your goal.
As expected, after paying off a decent chunk of my student loans, more of the minimum payment is going toward principal now. This means that instead of the 10 years the minimum payment was set-up to pay the loans off in, my student debt would be paid off in 4.5 years from now if only the minimum payment was paid each month. However, you know that’s not my plan at all.
My plan right now is to pay off my loans by the end of this year. By playing around with the slider, I determined that this will take about $3,350 per month on average. That means I need to step on the gas. By paying off my debt so quickly, I’ll save myself $3,201 in interest. If I don’t reach my goal but still manage to pay an average $2k per month, I’ll still pay off my debt in less than a year and save myself $2,800. I think that timeline is definitely doable.
If Mint’s new debt goals feature just measured my progress and let me set up my plan using the sliders I’d be more than happy. However, Mint takes it one step further and actually develops action steps for you. Now, the interest rate on my student debt is all 6.8%, but for purposes of showing you what Mint does, I told Mint that the interest rate on one of them was 10.8%.
Mint then provided me with my six-month plan. It’s a pretty nifty chart that shows you how much to pay each month, and on which debt. Basically, Mint will have you pay off the debt with the highest interest rate first. If some of the interest is tax deductible (student loan vs. auto loan), then you may need to adjust this payment plan because I’m assuming that Mint doesn’t factor that in. However, once the debts remaining have the same interest rate, Mint will have you pay down the lowest balance first to get the psychological benefits of getting rid of a debt, much like Dave Ramsey preaches. If my debts weren’t all from the same lender and had the same interest rate, I would probably print off this chart and put it on my wall. Then, as I made each prescribed payment, I would check it off. I think this feature is complete icing on the cake, and it makes Mint’s new pay off debt goals a great addition to the website. This is just one more reason why Mint.com is my favorite personal finance tool.