To the good people at Goodbudget,
I’m at a bit of a loss when it comes to managing ongoing debt payments. Each month I make a payment on my student debt of roughly $250. I know how to add a debt transaction, but I’m never sure what to put in the Principal, Interest, and Fees fields (see below).
The other thing I’m not sure how to manage is the interest that accrues. For instance, right now my student loan interest rate is 2.45% and the daily interest charge is $0.37. How do I keep my loan up to date not only with my payments but with the accrued interest?
Any guidance you can provide is appreciated. I love Goodbudget otherwise; I’m just having a tough time getting my head around this subject!
When you created your Debt Account, you entered a current Balance and an Interest Rate for the Account. Then, when you go to make a Debt Payment transaction, if you fill in the total amount you paid in the Amount field at the top, the software will automatically calculate what of that is being paid to Principal and what of that is being paid to Interest based on the Interest Rate you provided. So you shouldn’t have to manually enter anything in those fields unless you want to make a correction or change.
In other words, Goodbudget should help you track those Interest payments automatically, provided you have a constant Interest rate.
Does that help and make sense?
Yes, that does. Upon reading your answer, I realized the mistake I made was to neglect to add the interest rate when I created the Debt Account (I left it at zero). Now it should work.
Thanks for the quick response!