How do you handle interest payments in Undebt.it

Hi there, 

I have been using YNAB since January 2019 and love it. So much less anxiety around my monthly expenses. 

One of my major goals is to pay off my credit card debt. So far, I have stuck to the method described in one of the YNAB support articles. I figured I can spend $700 across my cards to pay them off. I budget the minimum payment on all of them and, additionally, budget the remainder amount for the card with the lowest balance (so essentially, the Snowball method, I think). I also separately budget in YNAB for the monthly interest accrued for each card since YNAB teaches us that such interest is, in essence, nothing other than an amount spent on the card. Those budgeted interest amounts then get added to each card's amount available for payment. 

I now discovered Undebt.it and would like to use it as I like the idea of optimizing my debt payoff. My problem is that I do not understand how to handle the monthly interest payments I described above in Undebt.it. I cannot add them to my $700 "Monthly Budget" for Undebt.it because if I did, Undebt.it just tries to distribute the budgeted interest according to its payoff plan, whereas they need to be applied to the correct cards in the correct amounts separately from the $700 "debt payoff budget."

Has anyone encountered the same issue and found a workaround? There is no easy option in Undebt.it to do this, I emailed the site owner and he confirmed this.

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  • I think when you enter your debts in Undebt.it you enter the interest rates and it uses those numbers to run it's calculation. If it is optimal that you put that interest money toward one card rather than spread it out, it will show you that. You're still working on paying off the charges and interest, but it's telling you where it recommends you put those payments.

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      • HiGer
      • higer
      • 1 yr ago
      • Reported - view

      lebdavidson2 Thank you. You are correct that you enter the interest rates for each card in Undebt.it, and that it calculates interest based on those.

      So in following what you wrote, I would budget 700 + the monthly interest amount as my total budget in Undebt.it and let it tell me how to allocate it? I am sure that would work, but I am not sure how that would work with reconciling with YNAB since I would now be putting an interest payment budgeted for e.g. an AmEX in YNAB partially towards a Visa and Discover card. Would that not create issues?

      I am just thinking that there must be a better way to do this, especially since Undebt.it offers YNAB integration and syncing, which was also touted on the official YNAB blog.

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    • HiGer I would enter the $700 plus interest into undebt.it, look at the plan it gives me, and then budget the numbers given by that plan. So you're not budgeting AmES interest to Visa. You're meeting all your minimum payments, then using $700+whatever to optimally attack the debt so that over time you pay less total interest.

      *This workflow might look like moving money you budgeted for one card to the payment category of another card. As long as all minimum payments are met, it's not a problem. 

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      • HiGer
      • higer
      • 1 yr ago
      • Reported - view

      lebdavidson2 Yes, that sounds like it would work. I will give this approach a try. Thank you!

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  • Hi! do you use annual interest on the credit cards to enter in Undebt.it? or the monthly rate?

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