Debt Snowball Method Calculator Free Google Sheets Worksheet

How to use the Spreadsheet?

Click on the button 'Access template' in the section above. You will be redirected to a page where you will be able to copy the spreadsheet into your Google Drive. To use this template, you don’t need any other software than your browser; the only requirement is to be logged into your Google account. If you are not logged in yet, it may ask you to log in. Once you are logged in, you should be asked to make a copy of the spreadsheet in your Google Drive. Click on 'Make a copy'. Every time you need to go back to the spreadsheet, go to Google Sheets and access it from there.

The file contains two tabs: one named 'My debts' to list all your debts, and the other named 'Debt Snowball Calculator' to figure out how the debt avalanche method will perform in your situation. In the spreadsheet, most of the cells fill in automatically. In the 'Debt Snowball Calculator', please make sure not to edit cells X4 and X6.

How to use the Payoff Template with Excel?

If you are more comfortable with Excel than Google Sheets, you can still use the template with Excel. To do this, you need to download the spreadsheet in the xlsx format. First, copy the spreadsheet to your Google Drive following the instructions above. Once this is done, open the template in your browser and navigate to 'File' > 'Download' > 'Microsoft Excel (.xlsx)'. The file should appear in your downloads, and you can now use the spreadsheet with Excel.

What’s the Debt Snowball method?

The debt snowball method is a popular strategy to enhance your debt repayment process. The principle is simple: each debt is assigned a 'priority rank'. The debt with the smallest outstanding amount is the one that should be repaid first, while the debt with the largest remaining balance is the lowest priority. Every time you finish repaying one debt, you put its minimum payment towards the other debts. This is why the method is called the named 'snowball' method. With the compounding effect, you will be able to build momentum, and the largest debts, which are the final ones, will be tackled much more efficiently.

Step-by-Step process to Apply Successfully the Snowball Method

Using the snowball method is every easy, here is a step-by-step process to guide you through the process.

Step 1: List Your Debts

Record all your debts, including balances, minimum payments, and interest rates.

Step 2: Order Debts from Smallest to Largest

Sort your debts in ascending order based on the balance, starting with the smallest balance first.

Step 3: Continue Making Minimum Payments

Ensure you continue to make the minimum payments on all your debts to avoid late fees and penalties. You should not put any extra money towards debts that are not top-priority, only repay the minimum required payment on those debts.

(Optional) Step 4: Allocate Extra Funds to the Smallest Debt

Determine how much extra money you can allocate towards debt repayment each month, and apply this extra amount to the smallest debt on your list. This step is optional but is a game-changer since it will save you a lot of money on interest in the long run.

Step 5: Pay Off the Smallest Debt

Continue paying the minimum payment plus the extra amount until the smallest debt is completely paid off.

Step 6: Move to the Next Smallest Debt

After clearing the smallest debt, apply the total payment amount (minimum payment plus any extra funds) to the next smallest debt on your list.

Step 7: Repeat the Process

Continue this process of rolling over payments to the next smallest debt until all debts are paid off!

Why Should I Repay My Debts with this Method?

While the debt snowball method may not be the most cost-efficient, it is highly motivating. The method's psychological benefits make it easier to stay committed to your debt repayment plan by providing a sense of progress and accomplishment, which helps you stay disciplined.
This approach works well for various types of debts, including mortgages, car loans, student loans, and credit cards.

Who Made this Method Popular?

The debt snowball method was popularized by Dave Ramsey, a highly regarded personal finance expert in America. Ramsey is the author of several best-selling personal finance books and hosts the radio show 'The Ramsey Show'. With his wise financial advices, he has helped many Americans achieve financial freedom.
The debt snowball method is now widely used across the United States, thanks in large part to Ramsey's influence.