Struggling with a mountain of debt can feel like you’re lost in a financial storm, right?
My debt snowball worksheet or debt avalanche worksheet can help you start by plotting a path out of the mountain.
It’s not just about scraping by with the minimum payment; it’s about creating a plan that actually works for your debt payoff.
Try using my free debt worksheets and watch those debts disappear before your eyes.
Key Takeaways
- Debt Snowball and Avalanche Worksheets are your cheat sheets for getting out of debt.
- The debt snowball method was developed by finance guru Dave Ramsey.
- The Debt Snowball Method is like starting with the easiest level of a video game to get the hang of it. You knock out the small debt first and work your way up to the largest.
- The Avalanche Method is for when you’re ready to level up quickly by going after the debt with the highest interest, saving you time and money in the long run.
- One helps you beat the game by tackling your debt from smallest to largest, and the other by taking down those with the biggest interest rate first.
- You still make minimum payments or more on the other debts, but using one of these methods can make paying off debt easier.
- Want help tackling bigger debts? Check out my Debt Planner, with over 20 printables to help you manage your debts better.
What is the Debt Snowball Method?
The Debt Snowball Method is a plan to pay off debt. It starts small, picking up speed as you knock out every debt you have.
You knock out the little debts first, and each one you pay off feels like a win.
You use debt snowball worksheets like mine to organize your debts and payments from smallest to largest.
It makes it easier to see what your debts are and how each payment is bringing you closer to being debt-free.
Debt Snowball Worksheet
My free Debt Snowball Worksheet is a handy tool for listing and prioritizing your debts, crunching numbers to calculate payoff dates, and keeping track of your progress along the way.
Think of it as your GPS for navigating your debt-free journey, guiding you with each step you take.
It’s not a debt snowball calculator but a printable worksheet you can keep handy and use anytime to see how you’re doing paying off debt.
Here’s how the debt snowball works:
Take a look at your budget and see how much extra cash you can throw at your debt payoff each month. This could be anything from cutting back on dining out to picking up a side hustle.
Once you’ve got that number, you’re ready to get the snowball rolling! Just print out my debt snowball worksheet to get to work on debt.
List out all your debts, from smallest balance to largest balance.
Take that extra cash you found in your budget and add it to the minimum payment of the smallest debt. That’s your magic number for the month to tackle debt.
Keep paying off that mount or more month to month until that debt is done. Then, go back to Step #1 to destroy the next debt.
Take the money you were putting towards it and add it to the next smallest debt minimum payment.
Example Debt Snowball Worksheet
Let’s take a look at a real-life example of the snowball effect. Imagine you’re juggling three debts: a $500 credit card balance, a $2,000 personal loan, and a $5,000 student loan.
After budgeting, you find extra money – $100 in your budget that you can throw at the first debt with the minimum payment. Cha-ching!
So $500 is the first debt we’ll tackle using the debt snowball method:
Use your debt snowball spreadsheet and list those debts from smallest balance to largest balance.
Instead of sticking to the minimum payment of $25 a month on that $500 credit card balance, let’s crank it up to $125 a month.
With your new payment plan of $125 a month, it will take a little about 5 months to pay off that $500 balance plus whatever interest the card has.
You’ve paid that $500 credit card debt off- and now it’s time to keep the momentum rolling.
Here’s the game plan: take that $125 that was your credit card monthly payment and throw it at the next debt on your debt snowball spreadsheet.
Let’s say the minimum payment on your $2,000 personal loan is $100 a month. By adding your $125 from the paid-off credit card to the minimum payment.
You now have $225 to put towards knocking out the personal loan and getting that debt hashed out.
Snowball Alternative: Avalanche Debt Repayment
If the idea of skiing down a mountain sounds more appealing to you than building a snowball, then the Debt Avalanche Method might be your go-to strategy.
Instead of starting with the smallest debts like the traditional debt snowball method, the Avalanche Method takes a different approach.
Here’s how it works:
- List Your Debts: Start by listing out all your debts, just like with the snowball method. Include everything from credit cards to loans, sorted by their interest rate from highest to lowest.
- Focus on the Summit: With this method, your target is to pay off the debt with the highest interest rate first.
- Avalanche Effect: Once you’ve paid the highest-interest debt, take the money you were putting towards it and shift it to the next debt on your list.
- Rinse & Repeat: Keep doing these steps until you’ve wiped out all your debt!
Debt Avalanche Worksheet
With this method, you’re not starting at the smallest debt and working your way up like with the debt snowball method.
Instead, you’re paying the debts with the highest interest rate first since you’re accruing more debt by not paying it off quickly.
The beauty is that it will help you save money on interest payments in the long run.
When you pay the high-interest debt first, you’re not just making progress- you’re also minimizing the total amount of interest you’ll end up paying.
Example Worksheet
Let’s revisit the three debts from our snowball example, but this time, apply the avalanche method.
Step 1: List Your Debts
- Credit Card Balance: $500 @ 15% interest
- Personal Loan: $2,000 @ 30% interest
- Student Loan: $5,000 @ 20% interest
Step 2: You’re targeting the debt with the highest interest rate first. In this case, it’s a personal loan with a staggering 30% interest rate.
Step 3: Start by putting that $100 extra money toward that personal loan (just like before) while still making minimum payments on your other debts.
After a few months of focused effort, you’ve wiped out the $2,000 personal loan.
Now, you take the $200 you were putting towards the personal loan and add it to the minimum payment for the next debt on your list- the $5,000 student loan balance.
So, let’s say the minimum payment on the student loan is $130 per month. Now, with your extra $200, you’re paying a total of $330 per month towards the student loan.
Once the credit card balance is paid off, you repeat the process with your credit card balance until it’s donzo.
FAQs
How do I get myself out of debt?
Getting out of debt can feel like digging yourself out of a snowdrift- it takes some effort, but it’s totally doable. Here’s how:
- Start by creating a budget to track your income and expenses.
- Take a close look at your spending habits and see where you can trim that money.
- Pick a debt repayment strategy that works for you.
- Put the extra money you saved elsewhere towards your debt.
- Find ways to increase your income, like picking up a side hustle or freelancing gig, to have more money to get rid of debt.
What debts should I pay off first?
If you’re into keeping things simple and love seeing quick wins, the debt snowball method might be your go-to.
You start by knocking out the smallest debts first, no matter their interest rates. It’s all about that feel-good momentum- kind of like crossing tasks off your to-do list!
What is the debt snowball formula?
The formula is really easy. Here’s how it works:
- Start by paying off your smallest debts first.
- Any extra funds are thrown at this smallest debt like snowballs in a snow fight until it’s completely wiped out.
- Then you move on to the next smallest debt, and so on, until all your debts are paid off.
Could I use the debt avalanche method instead?
Absolutely! You can definitely use this method if it suits you better.
Many people would rather tackle high-interest debt because they tend to be bulkier debts or gauging them on interest.
How do I use the Savvy Debt Snowball Worksheet?
Use my free debt snowball spreadsheet to keep everything organized and on point.
- Start by listing all your debts and balances on the worksheet, from smallest to largest.
- Also, put the minimum payment amount in the Monthly Minimum Payment column.
- Figure out how much you have to add to the Minimum Payment each month and write it in the Debt Snowball Payment column.
- Add the Monthly Minimum and Debt Snowball Payment together and write in the Total Debt Snowball Payment Column.
Each month, update your worksheet to track your debt progress and guide your debt repayment journey. Remember to start with the smallest debt and keep pushing forward!
Are you looking for something more?
My Debt Payoff Planner may be just what you are looking for- it has the Debt Payoff Tracker, Debt Snowball Calendar, Spending Habits Tracker, and more.
Can I make a debt snowball plan in Excel?
In Excel or Google Sheets, you have the flexibility to create your debt snowball spreadsheet or utilize one of the pre-made debt snowball calculator templates available.
Creating your spreadsheet allows you to customize it to your specific needs, including listing your debts, tracking payments, and projecting payoff dates.
You can fit it into your unique financial situation and goals.
On the other hand, if you prefer a more streamlined approach, you can opt for one of the pre-made debt snowball spreadsheets available online.
How long will it take to pay off $30,000 in debt?
The time it takes to pay off $30,000 in debt really depends on your monthly payment amount, interest rates, and any additional money you can put toward your debt.
To get a ballpark estimate, you can use a debt payoff calculator.
Just plug in your total debt, interest rates, and monthly payment, and voila, the debt reduction calculator will let you know how long it will take to pay off your debt!
Final Thoughts
You’ve got a couple of choices when it comes to kicking debt to the curb- from the slow and steady roll of the debt snowball to the high-speed plunge of the debt avalanche.
Both methods have their perks- the snowball keeps you pumped with quick wins, while the avalanche slashes those interest rates for big savings.
Just remember, this whole debt-free journey is more like a marathon than a sprint.
