Today we have some free worksheets (printable PDFs + Google Docs spreadsheets) that can be useful with helping you to get out of debt. There is a debt payoff worksheet and a debt snowball worksheet, so you can use whichever one suits your needs.
More Free Resources:
Why Use a Debt Payoff Worksheet?
If you’re determined to pay off debt and improve your personal or family finances, there are a few different ways that using a debt payoff worksheet can help.
- Stay Organized. A worksheet or spreadsheet can help you to keep track of your balances, minimum payments, actual payments and all of the relevant details. Keep track of everything in one place.
- Track Your Progress. With the help of a worksheet or spreadsheet, you can easily see your progress over time. See how much you’ve already paid off and what’s left.
- Visualize the Debt Payoff Process. If you prefer to learn and understand things visually, tracking your debt payoff on a worksheet or spreadsheet can help you to see the big picture.
What is the Debt Snowball?
If you’re not familiar with the debt snowball, it is a debt payoff approach that has been popularized by Dave Ramsey. The approach involves paying off your debts from smallest to largest (in terms of the balance owed), without regards to the interest rates of the debts.
The logic behind the debt snowball is that you will gain motivation whenever you eliminate a debt, even if it’s a smaller debt. By attacking the smallest debt first, you’re able to get a quick win that will give you encouragement and motivation to keep moving forward. It gives you a positive mental outlook that helps to keep you on track and moving forward with your debt payoff.
If you read many finance blogs you’ll come across countless success stories of people who have used the debt snowball approach to pay off significant amounts of debt.
Here is a quick summary of how the debt snowball works:
- Create a list of all of your debts. This typically excludes a mortgage but includes things like credit cards, car loans, personal loans, and student loans.
- Once you have all of your debts listed, put them in order starting with the smallest balance owed and ending with the largest balance owed.
- Make the minimum monthly payment on each debt except for the smallest one.
- Use all of your excess money to pay off the smallest debt as soon as possible.
- Once the smallest debt has been paid off, use all of your excess money each month to pay down the next smallest debt.
- Continue this process of attacking your smallest outstanding debt until each debt is paid off.