Debt Reduction Snowball Calculator

Download a free credit card Debt Reduction Calculator and Debt Snowball Payment Schedule worksheet for Microsoft® Excel® and OpenOffice.org. This spreadsheet allows you to choose different debt reduction strategies, including the debt snowball effect (paying the lowest balance first) and highest interest first. Just choose the strategy from a dropdown box after you enter your creditor information into the worksheet.

This page also includes debt reduction information and resources, as well as descriptions of the different strategies you might want to try out with the worksheet. For example, you absolutely must make a budget. Read our review of the best tool for creating and managing your budget.

Screenshot Screenshot	Debt Reduction Calculator Use our free Debt Reduction Calculator to help you eliminate your credit card, auto, student loan, and other debts. Easily create a debt reduction schedule based on the popular debt snowball strategy using this free spreadsheet. The first worksheet is a simple calculator where you enter your information, choose your total monthly payment, and see a summary of the results based on the strategy you choose. The second worksheet is a payment schedule designed for you to print so you can keep track of your progress. You can also see how the snowball increases as you pay off your debts. 9/23/08 Update (version 1.1) - Now works in OpenOffice, also! 3/17/09 Update (version 1.2) - Now includes a Snowball Growth Chart so you can see how the snowball increases and your interest due decreases over time (only in the Excel versions).   Play the Video Demo "No Installation, No Macros - Just a simple spreadsheet"	Download Now Cost: Free ($0.00) See Note Below License: Personal Use Only File Type: .zip Size: ~1.5 MB Version: 1.2.0 Required: Microsoft Excel 2002(XP), 2003, 2007, or OpenOffice No Installation, No Macros, Ad-Free Technical Support: Contact Vertex42 via email if you have questions specifically about this spreadsheet.
Join the Effort!	Help us free our society from the bonds of debt by spreading the news about this free debt reduction tool. Link to this page on your website, in your blog, on Myspace, Facebook, etc. Have a Success Story? We would love to hear it. Contact us. A big thanks to Donald Wempe for the motivation to create this spreadsheet, and for his great ideas!
Purchase the Commercial Use License to use this spreadsheet for your business. The commercial version includes a spreadsheet that allows up to 40 creditors. 60-Day Money-Back Guarantee		BUY Now Cost: $39.95 License: Commercial Use (not for resale or distribution) Version: 1.2.2-C Requirements: Excel 2002/2003/2007 only (not for OpenOffice).

Using the Debt Reduction Calculator

Debt Reduction Strategies

This section describes the different strategies that you can choose within the debt reduction spreadsheet. You may also want to see our Credit Card Payoff Calculator for more information.

Unless you choose the "No Snowball" option, ALL of these strategies make use of the snowball "effect" where after you pay off your first debt you roll that payment into helping pay off the next one. For more information, see Dave Ramsey's article on the debt snowball effect, or read his book, "The Total Money Makeover".

1. Debt Snowball (Lowest Balance First): This method is the official debt snowball strategy. The benefit of this method is the psychological effect of seeing the number of debts disappear quickly. According to Dave Ramsey, it's important to build momentum and see success early on. After all, if it was easy to pay off debt, you probably wouldn't need this calculator. :)
   
   
2. Highest Interest First: This strategy results in the lowest total interest, but depending on the balance of your higher interest loans, it may take you longer to see your first loan/debt completely paid off. If the difference in the total interest is not significant, than you may get more satisfaction and success from the Lowest Balance First method.
   
   
3. No Snowball: Select this option if you want to see how long it will take to pay off the debts based solely on the individual payments you specify (i.e. no snowball effect). In some cases, you may find it will take more than 30 years to pay off some debts.
   
   
4. User-Specified Order: There are three options for choosing the order that you want to pay your debts. You can choose "Order Entered in Table", which is self-explanatory. You can also use the Custom column to enter your own formulas or your own ranking and choose "Custom-Highest First" or "Custom-Lowest First". I'd suggest ranking each row using values "10, 20, 30, 40, etc." . The reason to enter the order by 10's or 100's is so that you can easily switch the order. For example, you can move the one marked "30" ahead of "20" by changing the 30 to 19. You can also use the built-in SORT command via the Data menu.
   
   

Variation on the Debt Snowball Strategy

If you choose the "Lowest Balance First" method, and two of your balances are roughly the same amount, but have very different rates, you might want to switch the order that you pay them off so that you pay the higher rate first. It might not make much difference in how long it takes to pay them off, but it could make a difference in how much interest you end up paying.

To use this approach in the worksheet, you'll need to choose the "User-Specified Order" methods described above.

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