This is a guest post from Mike at Richer by the Day. That site features advice on personal finance, investing, incremental improvement, and regularly reviews new business, finance, and investing books. Here is his review of the iPhone app, Pay Off Debt.
After receiving one of the promotional codes @manvsdebt had available for a free download of the iPhone App Pay Off Debt, the least I could do was review the app for his readers.
Pay Off Debt is a simple app that allows you to enter all off your debts and then helps you to decide the most effective way to pay them off. You can choose to pay the smallest balance first (aka The Debt Snowball method), the highest interest first, or a custom repayment plan. This last option is the most innovative, as it allows you to track your Debt Tsunami . For many of us, a custom approach like the Debt Tsunami allows the ideal balance of accelerated repayment and emotional factors.
Using the App
The app settings are very straightforward. You can use the default currency and language and skip the email address setting to get started. The first thing to do is add your debts.
To add debts, you simply fill in a simple form by naming the debt, choosing the debt type (Credit Card, Car Loan, Mortgage/HELOC, Student Loan, or Generic Debt), add the amount owed, the current balance, the interest rate, day of the month the payment is due, minimum payment amount, and payment frequency. For my evaluation, I added four different debts with various outstanding balances, interest rates, etc.
The app then shows the progress you’ve made on each of your debts and reports when each, and all, of your debt will be paid off using the chosen repayment method. From the main Debt screen, you can also record individual payments or all payments.
When you choose to Configure Snowball from the setting menu, you be able to set the additional amount you plan to apply towards debt (in addition to minimum payments) and how you want debts sorted. This is where you can choose between lowest balance (Debt Snowball), highest interest (traditional repayment), or custom (Debt Tsunami). The first two options will sort your debts automatically, where the custom option allows you to drag your debts into whatever order you prefer. With each new sorting, the new estimated payoff date will be given.
The final feature of Pay Off Debt is the ability to email yourself (or someone else) a report. The app reminds you that emailing info is not secure, so you should ensure that you didn’t use account numbers (or other sensitive info) to name your accounts. The email you receive looks very similar to what you see when using the app itself. Here’s an example clip from an email report:
Review
Pay Off Debt is a simple and useful app if you are struggling to decide between different debt repayment methods or want to take a customized approach like the Debt Tsunami. There are some features I would have liked to see, such as the ability to review or edit payments or plot my debt over time to see it coming down. Even without these, Pay Off Debt, still has many beneficial features.
The first question I generally ask myself when evaluating apps is Do I need this on my phone?. The answer to that is similar to the Debt Tsunami in that emotions are a factor. If carrying around your debt repayment plan in your pocket will serve as a constant reminder to avoid wasteful spending then it may certainly be worth having. If you instead use it to see if there’s enough room, before you max out your credit card, to buy something stupid, then you don’t want this with you. If you’re responsible enough to be looking at different debt reduction strategies and tracking options, I suspect you could benefit from having an app like Pay Off Debt.
The other thing to consider before purchasing an app is whether there are less expensive, or more appropriate, solutions available. Most of the features of Pay Off Debt could be implemented fairly easily in a simple spreadsheet. But just as many of us prefer budgeting software over spreadsheet budgets, having the work done for us again tips the balance in favor of a custom application. There are other debt reduction programs out there, both for computers and the iPhone. The relatively low cost, ease of use, and simplicity of Pay Off Debt are all favorable benefits. The ability to customize debt repayment using a Debt Tsunami approach is a big benefit as well. It’s easy to advise against bad apps, which no one should buy. Pay Off Debt is not a bad app. For the right person, it could be a great app. Take a look at the screenshots, review some of the feedback on iTunes, and look into the alternatives before pulling the trigger on this one. If it passes those tests for you, I’m certain that you’ll find it worth having.
Pay Off Debt version 1.1 is currently available for the iPhone or iPod Touch from the iTunes App Store for $2.99. 
*Baker: The above link is an affiliate link that I encouraged Mike to add (his own, not mine). Research the alternatives that Mike outlined before making any purchase.
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I’m fascinated with iPhone apps, the whole idea is awesome. Now I just have to work on *getting* an iPhone. Methinks during this next month
Good post.
Budgets are Sexy’s last blog post..10 Signs the Economy Really Is That Bad.
Seriously… I can’t believe the coolness of the iphone apps. It is as if the world has converted everything into an app. I even got a Bizarro comic strip app that I love. Its the funnies in your pocket. Crazy. Then this debt relief one is way cool too, gonna look into it.
Baker, Thanks again for the promo code and hosting my guest post. For the frugally minded potential iPhone users out there, you may be interested in my analysis of How My iPhone Pays for Itself . I would never have a “luxury” item like an iPhone unless it saved me more than it cost.
Mike’s last blog post..What Playing Disc Golf Has Taught Me About Managing My Finances
That is a sweet, sweet app!! It’s too bad we are way too cheap to buy an IPhone. We just renewed our contract and could have got the IPhone for $200 with the 2 year contract. Great deal but I just can’t see myself spending $200 on a phone.
Great guest post!
Brad @ EOD’s last blog post..New To EOD Page Finally Complete!
Oh how I want an iPhone. There is an app for everything, hopefully tomorrow they’ll announce some $99 options. Thanks for the indepth review of yet another app I’d like to try out.
Paul @ FiscalGeek’s last blog post..Is your printer robbing you blind? Calculate your Electricity Usage with a Kill A Watt
Seems like a contradiction. With it’s expensive voice plans and mandatory data plans the iPhone is one of the most expensive phones you can own! Doesn’t seem to jibe with trying to get out of debt! If you must (and I admit to a bad case of iPhone envy) then maybe the iPod Touch is the way to go.
The amount of applications in the world today are outstanding. There really is an app for everything. This is a nice app for someone who may not know the correct way to deal with their debts. Given this economy I am sure everyone can benefit from an app like this.
.-= iPhone app reviews´s last blog ..Cartoon Wars =-.
I think this is a very beneficial app for the iphone. At the 2.99 price you get a daily reminder of your scheduled date pay off timeline and I think thats important for people in todays economy where every $1 counts. Great review of the app!
We just started using this and it is pretty nice to have the information at my fingers at any time. I had been using a few different methods to track this but this app seems the easiest.