Debt Payoff App Introduction:
Most people find it hard to pay off debt, especially when it comes to managing several high-interest loans. It’s part of why the average American owes roughly $38,000 in personal debt. And this figure doesn’t even include mortgages! Because of this, traditional debt payment methods may no longer be effective.
This is why we developed the Savvy Debt Payoff Method, which combines the best aspects of traditional debt re-payment methods. Through our Savvy app, you can be empowered to get rid of multiple debts, including high-interest loans.
Let’s take a look at how the Savvy app can help you become debt-free and thus, worry-free.
How does the Savvy app work?
The Savvy app combines two of the most common strategies to pay off debt: the snowball method and the avalanche method.
The Snowball Debt Payoff Method
Paying off your smallest debt first is called the snowball method. The theory behind this lies in motivation. By paying off your smallest debts first, you gain momentum. Seeing your debts disappear little by little inspires you to continue paying the rest off.
The Avalanche Debt Payoff Method
On the other hand, you can also pay off debts starting with the ones with the highest interest. This is called the avalanche method, which can help you save money in the long run. That’s because you’re not allowing the interest to build up over time.
Which method is more effective?
A study by the University of Michigan reveals that people prefer the snowball method over the avalanche method. The satisfaction is more immediate, after all. But when shown the high interest rates of their other standing loans, people go with the avalanche method instead. Another study, this time by the Kellogg School of Management, showed that people with large debts were more likely to stick with a debt payoff plan when they focused on smaller balances. This indicates that paying off smaller debts is more motivational in the long term.
However, we found that both methods are no longer effective today. If you snowball your payments, for instance, you end up spending more on interest and prolonging your debt. That’s why it pays to have a good understanding of your income and expenses. This is basically what the Savvy App aims to do. It will show your income and expense every month, and then provide you with a detailed recommendation on how best to pay your debt using the Savvy Debt Payoff Method.
Who is the Savvy Debt Payoff App for?
The Savvy App can be a good tool for those who can’t afford to hire a financial adviser, despite them being more in demand recently. Investopedia explains that financial advisers will charge you a set fee or ask payment by the hour, especially if you’re not interested in investing. While rates vary across states and the adviser’s experience, they can still help you set up a plan to help you get out of debt.
As more Americans get deeper into debt each year, more people are looking to financial advisers for help. They have become so important, especially with the increasing complexity of finance, and will only continue to be more in demand each year. In fact, Maryville University predicts a 30% increase in opportunities for financial planners from 2014 to 2024. However, typical hourly fees for financial planners range from $100 to $300. And at only $6.99/month, the Savvy app is the next best thing.
Based on your unique situation, the app will calculate the best plan of action for you under the Savvy method. Then, it will compare it with other existing methods of debt payment, like the snowball method, to show how much you save in interest for each option. By using math to combine the best of the snowball and avalanche methods, it makes budgeting and debt payment satisfying to help you stay motivated, while also helping you save on interest. Your doorway to making debt payments fast and easy is available for both iOS and Android. And don’t worry — the Savvy app uses bank-level 256-bit encryption and provides data-driven automation to save you time and money.
Author: Angel Carr