Take the money that you were applying to pay off Debt 1, and add it to your monthly payment amount for Debt Column 2. With the increased savings, you should be able to aim for a payment on Debt line 2 that is up to 3 or 4 times higher than it was before. Related content: Personal finance tips everyone needs to know. Keep adding the additional money that you were putting on each payment for Debt 1 onto Debt 2 until it is a zero balance!
Good for you! Now you can take the combined payment power of both of the other debt lines and throw it at Debt 3. This should be your biggest debt and the hardest one to make payments on that will actually go to the principal amount you owe. You will probably be shocked to see how much money you can now put toward Debt 3 since you have paid off the other 2 Debt lines.
Using these steps and sticking to the plan that you have put in motion will convert the small payments you have been able to make into big payments that really get something done! The Debt Snowball Worksheet will show you this progression in action and you will be amazed at how easy it can be to solve the debt burden that you have been carrying around! Related content: side hustle ideas to earn extra cash.
If you were wanting to use a debt snowball calculator that is compatible with Microsoft Excel and Google Sheets, download the best debt snowball spreadsheet below. The easiest way to create your own debt snowball spreadsheet is to use our ready-made template and upload it to Google Sheets or to Microsoft Excel.
Then, all you need to do is add your information and our debt snowball sheet will automatically do the mathematical calculations for you. Yes, you can use Google Sheets for free. This is where making a budget and sticking to it comes into play. Remember how horrible it felt to be buried under credit card debt? Look at all of the money that you are saving in total interest now that you are not making payments on your credit cards.
It can be tempting to simply move that money to new items that you want to buy or to other costs. Invest , save, and budget and you will be able to save all the money you were throwing away in interest to have for a future rainy day or for a future planned expense!
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You aim to pay off the smallest debt first. After the first debt is paid off, you take the money you were using to pay the first debt and apply it to the next smallest debt, increasing the monthly payment. Tiller connects 21, banks to your spreadsheets and automatically updates them with your spending, balances, and net worth each day. Track everything in one place with flexible templates and no ads. Using the debt snowball method, you would pay off your auto loan first.
But mathematically, the best way to pay off your debt is using the avalanche method. Using this method, you pay off the debt with the highest interest rate first, regardless of how much you owe. In this instance, it would mean paying off your credit card debt first, as it has the highest interest rate.
To set you up for success, here are some of the best free debt snowball spreadsheets. Our debt snowball worksheet comes in both Excel and Google sheets format.
Select the button below that corresponds to your desired format to grab your copy now. Note: If you need space for more for more debts you can grab the extended version of the Debt Snowball Worksheet here. Downloads Download Excel Version.
Download Google Sheets Version. Discover the keys to taking your relationship with money to the next level with this Free Finance Relationship Goals ebook.
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