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Shedding the Freshman $15,000

Hal M. Bundrick

NEW YORK (MainStreet)—Out of college and into the workforce means it is finally time to start shedding the freshman 15...

Thousand. Dollars.

We're not talking pounds, we're talking debt. According to the Financial Independence Survey released last year by the PNC Financial Services Group, the average Generation Y twenty-something owes $45,000 for student loans, credit cards, car loans and the rest. Start pushing age thirty, and the average debt balloons to an astounding $80,000.

You are not alone.

Millennials are finding it hard to pay off this mountain of debt -- much less save a few dollars. However, there is hope for one of this nation's largest generations. Time is on your side, but you've got to have a plan.

"Though budgeting can seem overwhelming, Millennials have the luxury of time to develop a strategy and more resources than any other generation to better manage their money and achieve their financial goals," says Shannon Johnson, director of consumer checking and rewards at PNC in a statement released with the survey.

Also see: How To Track Your Spending Beyond Mint.com

Reducing debt and socking away a few bucks means mastering the art of controlled spending. You know, it's that whole "pay yourself first" thing. The good news is, there are iPhone and Android apps that can reduce the hassle-factor of budgeting.

Mint is the well-known grand-daddy of all financial apps, with over 10 million users.

Tim Murphy, a Chicago-based tech entrepreneur and real estate investor, started using the iPhone Mint budgeting app four years ago. He had over $30,000 in student loans and car notes to pay off.

"For me, the power of Mint is the power of information. If I am negotiating something or shopping for services, it's incredibly valuable to be able to look up what I've spent in the past and use that data to make my decision or get the best deal," Murphy said. "Especially on the iPhone or Android phone app, this is dead simple and very fast. Mint can be like Pandora, in that the more you use it, the better it gets. Pandora plays songs you like based on your up/down votes, so the more you vote, the more tailored your playlist. Mint categorizes and tracks goals based on your settings, so the more rules and goals you set, the more automated your finances become."

Murphy is such an evangelist for the process he has written a guide to the Mint app, The Mint Manual: A short-cut to mastering and saving money with Mint.com.

Eva Miller is a D.C. area mom of a one-year-old, trying to make one income stretch while her husband is in school. She has been using Mint for just the last couple of months. So far, so good.

"It definitely saves time over using the old spreadsheet method I used to use, where I'd manually enter my information into a spreadsheet, which would take forever," Eva admits. "I wouldn't want to do it, so I would get really behind on keeping up with my finances. I'm still not perfect at keeping on top of things now, I have a one-year-old who takes a lot of time, but I'm making improvements."

Also see: Can the Student Debt Crisis Outshine the Housing Bubble?

"I like that Mint is so easy to use," she adds. "My one qualm with it is that it's not as flexible with creating your own categories as I'd like. You can create sub-categories, but not higher level ones. I do tend to use Mint more on the website, for the bigger view, but one feature I really like the app for is the ability to keep track of cash that I spend. That was something I didn't have a good system for before -- I used to try to jot down on ATM receipts what the cash was spent for, but a lot of times I'd forget to do it. I also like the ability to check my budgets and balances through the app on the go."

Michael Kitces, a CFP in Columbia, Maryland, thinks Mint is a good starting point for people trying to get a handle on their finances.

"We do find that for many people, they really have no idea what they spend, and so to that extent programs like Mint are a huge help for people to really start to see where the spending goes in the first place," says Kitces. "Another planner in our office likes to recommend Mvelopes, which does a bit more to help people proactively budget and break expenses into categories."

Mvelopes is an app that employs the "envelope budgeting" process. Spend all that's in the envelope for, say dining out, and you're done for the month spending in that category. It's back to the ramen noodles. Mvelopes is available for iPhones and iPads as well as Android devices and the Kindle Fire.

There are no shortage of choices for budgeting apps, most of them free. Pageonce is an app available for iPhones, iPads, Androids – even Blackberrys and Windows Phones. Facebook and Google even have money management apps, as if they didn't already have enough personal data on us by now (cue the song for the NSA's PRISM Program).

The trick is to find one you like. And use it.

If not, that Freshman $15,000 might really get out of hand.

--Written by Hal M. Bundrick for MainStreet

Also see: Most of Us Still Don't Have a Rainy-Day Fund

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