Creating a Debt Snowball Spreadsheet: Step-by-Step Guide for Excel and Google Sheets

Debt Snowball Spreadsheet Set Up – Debt Totals and Interest Rates

If you’re determined to eliminate your debt as quickly as possible, I highly recommend using a debt snowball spreadsheet. In this post, I will guide you through the process of creating your own debt snowball spreadsheet in either Excel or Google Sheets. Before you begin building the spreadsheet, it’s important to gather the necessary information about your debts, such as the total balances and interest rates. Having these details on hand will make setting up your debt snowball spreadsheet much easier.

Let’s start by setting up the payment and loan names across the top of the spreadsheet. Begin in cell 2 by entering “Payment” and label the first loan as “Loan A” with a 3.3 percent interest rate. Repeat the same process for subsequent loans, labeling them as “Loan B” with a 5 percent interest rate and “Loan C” with a 4 percent interest rate. Feel free to modify the labels to match your specific loan names. Including the interest rates is crucial for the debt snowball calculations.

Next, underneath the loan names, enter the current total balances of each loan. For example, you can input $6,000 for Loan A and $15,000 for Loan C. Format these numbers as currency to ensure clarity. Additionally, you can center the cells for better readability.

Now, assign the minimum payment for each loan. For instance, set the minimum payment for Loan A as $100, Loan B as $85, and Loan C as $130. Adjust these values based on your own minimum payment requirements.

Formula to Quickly Add Months and Years to Debt Snowball Spreadsheet

Allocating the Months and Formatting Dates:

When setting up the spreadsheet, it’s important to allocate the months accordingly. Since I’m creating this in January 2023, I will include the months in the spreadsheet. To simplify this process, I’ll provide a shortened formula that you can drag down to populate the months automatically.

Here’s the formula:

  1. In a cell, type “=EDATE(” (without quotes).
  2. Click on cell A3 (assuming A3 is where you want to start the months).
  3. Type a comma (,),
  4. Type “1” to add one month to each subsequent cell.
  5. Press Enter.

Initially, the formula might not work as expected. This is because we need to format the dates correctly. To do this, follow these steps:

  1. Select the cells containing the dates.
  2. Go to Format > Number > More Formats > Custom number format.
  3. Choose “Month” and “Year” from the drop-down menu.
  4. Click “Apply”.

Now, try dragging the formula down, and you should see the months automatically fill in from January 2023 to December 2027.

That takes care of most of the formatting and date allocation. We’ll move on to some calculations related to the payment.

Formula to Calculate Monthly Interest for All Your Debts

We can easily drag this formula down for all the months because the minimum payment will be the same every month. To do this, click on the small blue square in the bottom right corner of the cell and drag it down until you reach the last month listed.

Now, let’s move on to calculating the approximate interest we’ll pay each month for each loan. We’ll use a formula that gives us a good estimate of the interest amount. Here’s how to set it up:

  1. In a new cell, start with the formula “=(” (without quotes).
  2. Click on the cell containing the total loan amount for that loan.
  3. Subtract the minimum payment for that loan.
  4. Close the parentheses.
  5. Multiply by the interest rate. Remember to convert the interest rate from a percentage to a decimal. For example, if the interest rate is 3.3%, use 0.033 in the formula.
  6. Divide the result by 12 to get the approximate monthly interest amount.

For example, if the total loan amount is $1,500 and the interest rate is 3.3%, the formula would look like this: =(1500 – minimum payment) * 0.033 / 12.

Drag this formula down for each loan until you reach a negative value. This will indicate when the loan will be paid off. You can copy the formula by clicking on the small blue square and dragging it down.

Repeat the same process for the remaining loans, adjusting the loan amounts and interest rates accordingly.

To format the spreadsheet, you can freeze the first row so that it remains visible as you scroll. Additionally, if you have more loans (e.g., Loan D, Loan E, etc.), you can add them to the spreadsheet and follow the same steps.

Remember to adjust the formulas and calculations for each new loan.

What to do When You Pay Off a Debt in Your Debt Snowball Spreadsheet

Now that we have the basic setup of the decimal spreadsheet, let’s understand how it works. The principle behind the decimal spreadsheet is to prioritize paying off the smallest debt first, and then use the minimum payment from that debt to accelerate the repayment of the next loan.

To implement this strategy in your spreadsheet, follow these steps:

  1. Once you reach the point where a loan is fully paid off (e.g., Loan A with a balance of $100), you no longer need to allocate funds for that loan.
  2. Take the minimum payment amount from the paid-off loan and add it to the minimum payment of the next loan (e.g., add $100 to the minimum payment of Loan B, making it $185).
  3. To update the spreadsheet, change the payment amount in the corresponding cell (e.g., change the payment for Loan B to $185).
  4. Drag this updated payment amount down until the next loan is fully paid off.

By following this process, you’ll notice the acceleration of debt repayment. For example, after paying off Loan A, you added $100 to Loan B. As a result, Loan B will be paid off earlier (e.g., December 2026) compared to the original repayment schedule (e.g., April 2031). This approach saves approximately five years on the repayment of Loan B.

Repeat the same steps for subsequent loans. After paying off each loan, roll over the minimum payment to the next loan and adjust the payment amount accordingly. Continue dragging down the payment amount until all loans are paid off.

Using this decimal spreadsheet strategy, you can become debt-free faster, potentially saving several years compared to making only the minimum payments.

Debt Free Playbook

That’s why I highly recommend it. Another option I have for you is the Debt-Free Playbook, a mini video course I created. It not only helps you set up your debt snowball spreadsheet but also provides advanced tips and strategies to accelerate your debt repayment. The course delves into specific techniques for paying off student loans and credit card debt. You can find the link in the description below. I encourage you to check it out.

In addition, I suggest watching the next video, which guides you on creating a 50-30-20 budget. This budgeting method will help you prioritize paying off debt while aligning your spending with your values. It’s a valuable resource to focus more of your energy on debt repayment.

Introducing the OfficeHabit Shop Debt Payoff & Monthly Budget Tracker

A comprehensive set of tools designed to help you take control of your finances. This collection includes essential resources such as Google Sheets templates, Debt Snowball Spreadsheets, Bill and Debt Trackers, and a Paycheck Budget Sheet.

The Debt Payoff & Monthly Budget Tracker is built on the powerful platform of Google Sheets, making it accessible and easy to use. With these tools, you can track your debts, create a personalized debt payoff plan using the proven Debt Snowball method, and monitor your progress as you work towards becoming debt-free.

The Bill and Debt Tracker enables you to stay organized by recording and monitoring your monthly bills and debt payments. You can effortlessly keep track of due dates, payment amounts, and payment history, ensuring that you never miss a payment and incur unnecessary fees.

The Budget Planner assists you in creating a comprehensive monthly budget. It provides a structured framework for allocating your income across various categories, helping you prioritize your spending and align it with your financial goals. The Paycheck Budget Sheet specifically focuses on managing your income and expenses on a paycheck-to-paycheck basis, ensuring that you make the most of every dollar you earn.

Whether you’re just starting your debt repayment journey or looking for more effective ways to manage your monthly budget, the OfficeHabit Shop Debt Payoff & Monthly Budget Tracker offers the tools and guidance you need. Take charge of your finances, track your progress, and achieve your financial goals with this comprehensive set of resources.

Leave a Comment

Your email address will not be published. Required fields are marked *

Shopping Basket
Scroll to Top