I just released a simple debt snowball calculator: Ball of Snow.
Since college I have had many conversations about the best way to pay off student loans, credit cards, and mortgages.
If you only have a single debt, the answer is simple, spend more--pay it off sooner and save interest. The more debts that you have, the trickier it is.
A common approach is to use a debt snowball to gain momentum by focusing on single loans at a time and keeping the debt repayment amount constant after each is paid off. This creates a "snowball" effect where the money you were spending on a loan gets added to the next loan repayment and the "snowball" gets larger--debts get paid faster. Simple idea and a good way to pay off debts quickly. But did you know that the order that you pay off debts changes how much money you can save on interest?
This project is not the first time that I have attempted to make a debt snowball calculator. It is my third attempt.
For my first attempt, I tried to learn how to use Adobe AIR to make a desktop application that people could use to track their debt and keep updating. I had a lot of plans for it: multiple accounts, nice, pretty charts, fancy interface, cool background articles, etc. That app didn't make it very far. I got the basics done enough that I could show an amortization and simple chart, but there were some technical obstacles that I did not have the time or energy to work out and the desire to finish it floundered.
A year or two later I was out of college and starting my first job as a graduated citizen... with graduated student loans. This spurred my second attempt at a debt snowball application. Similar to the first attempt, I had grand ideas and visions for features. This time I decided to use a server side application and just run it as a normal web application. Things started out pretty good, but there were some major downsides that turned me off to finishing it. It was slow, I did not have a place to host it, and no time to make it into my 'dream' snowball application. So I used it to help get myself out of debt (going on 18 months without debt!) and that is as far as it went.
Since I have been debt free I have not really thought about the debt snowball idea for a while. It was a thing of my past, like a shed snake skin that I didn't have a use for anymore. But I was talking with an old co-worker and friend about the idea of debt snowballing and it got my brain going again. Even though I do not need to use it on my own debt, I still talk to many friends and family about repaying their debt and I am excited when I get to help people save money, especially when it is something as simple as paying debt off in a different order.
Using this fresh batch of excitement I gave the snowball calculator another go. But this time I decided to approach it differently to avoid my earlier mishaps:
- Simple. I wanted to shed a lot of the complex ideas that would make it a burden to develop and never get 'done'.
- Fast. My first attempts were a lot slower than I wanted them to be, taken many seconds to process each change. I wanted this project to be fast!
- Scalable. If the service started getting heavy use I didn't want to worry about the hosting strain from a successful project.
- Simple. Did I mention simple?
With my third attempt, I hope to catch the great snow beast and make it easy to understand debt snowballing.
Its free, fast, and fun to experience. I hope you enjoy it as much as I enjoyed creating it!
So what are you waiting for? Go check it out: Ball of Snow.
Posted on 8 Dec 2011