How The Debt Snowball Really Works (Free Tool Included For YOUR Debt Snowball!)

Want to get out of debt fast? Then commit to the debt snowball.

You might be thinking, “Oh yeah, yeah, I’ve heard of the debt snowball. It makes sense – you pay off your debts one at a time until they’re gone. I got it.

No, you missed it. You missed it entirely.

How the Debt Snowball Works

The debt snowball is about more than just paying down your debts one at a time. There are three major elements to the debt snowball:

  1. Your initial lump-sum contribution
  2. Your contribution each month
  3. Laying out your debts – from smallest to largest

And you know what? Interest rates have pretty much nothing to do with the debt snowball. Do you know why? Because paying off debt is 80% emotional and 20% logical. Paying off debt is more about immediate progress than it is about math. All you nerds out there, just trust me and put your calculators away (and for the love of Pete…please throw away that pocket protector!).

Your Initial Lump-Sum Contribution

This is the first major step of the debt snowball. To get the snowball started, it works best to throw as much money at your debts as possible.

After all, you’re committed to getting out of debt right? And you’re going to do it as fast as possible, right? Then take that $5,000 that you have in savings and throw all but $1,000 at your debts. Then, you’ll use the savings from those debt payments (that you no longer have) and pay off your remaining debts in no-time!

Debt Snowball

If you don’t have any money, you might want to read this post to get started with a bang! – How to Save Up $1,000 in Just 4 Weeks.

Your Contributions Each Month

The second key to the debt snowball is your monthly payments. The more you can put toward your debts each month, the faster you’re going to be able to pay them all off.

This can be done via tow methods:

  1. Reduce your spending
  2. Increase your income

The best way to save money each month is to lay out all your expenses. Look at them, ask yourself if they’re necessary, and eliminate them if they’re not.

Debt Snowball

If you’re thinking about increasing your income, take a look at my “Make More Money” page. Subscribe to the site if you want the full listing of 101 Ways to Make More Money.

How to Lay Out Your Debts

I suggest that people pay off their debts from smallest to largest and ignore the interest rates entirely.

Sure, that 18% credit card debt might freak you out like crazy. But if you tackle the smaller debts with intensity like I know you want to, you’ll get to it sooner than you think – and then bust it out sooner than you ever thought possible!

Set Up Your Own Debt Snowball!

I’ve never seen a free tool out there that helps you lay out your debt snowball, so I figured, “Why not make one for my readers?” Ha, as it turns out, it’s not as easy as I thought it’d be! But, it’s finally complete and it will help you figure out:

  1. How to set up your debt snowball
  2. The length of time it will take you to get out of debt at your current pace
  3. How to speed up your debt snowball by upping your initial contribution or your monthly payment

So let’s get to it! Let’s set up your plan so you can finally GET OUT OF DEBT!

1) Download the Free Debt Snowball Tool

Just click the link below and download the Excel sheet. Then, we’ll start entering your numbers!

Free Debt Snowball Tool – Click Here to Download – you’ll see the download appear as an Excel file in the lower left of your screen after clicking the link.

The Debt Snowball

2) Enter your one-time contribution

How much money could you muster up to get this debt snowball rolling? The more you can throw at your debts for the start, the quicker you’ll be able to get out of debt.

Enter your one-time contribution in cell H12.

3) Enter your monthly contributions

Now, it’s time to enter the amount you think you can throw at your debts – above and beyond your minimum payments. Can you come up with $200 a month? $400 a month? More?

Enter your monthly contribution amount in cell H11.

4) Enter your debts, smallest to largest

Alright peeps. I know it’s painful, but let’s enter those debts of yours into the spreadsheet – from smallest to largest.

In cell C17, enter your smallest debt amount, the minimum payment, and the interest rate. Be sure to rename the debt in the cell block so you keep them all straight.

Continue to move to the right and enter your next debt amount, the minimum payment, and interest rate. List all your debts (up to 6 of them) into the sheet. If you have less than 6 debts, just enter in zero’s for the amounts, payments, and the interest rate.

So what’s the verdict? How long will it take to pay off your debts?

Just scroll down, take a look at the far right column to see how long it will take before all your debts turn to $0.00. In what month will you be debt free? 

5) Figure out how to speed it up!!

Did you enter in all of your numbers and discover that it’s going to take you 8 years to pay off your debts??? Well that just flat out sucks! Let’s figure out how to speed up that debt snowball!

What if you…

  • Sold tons of stuff and made a couple thousand bucks? What would that do to your snowball? Would it take a year off of your debt payoff?? Maybe more??
  • Sold some of that debt? If it’s going to take more than 2 years to pay off that car loan, why not just sell the car??
  • Took on a part-time job that paid an extra $1,000 a month? How much would that speed up the snowball?

The faster your tackle your debt snowball, the more likely it is that you’ll get finally get out of debt!

So put on your working boots, make some money, and get rid of that debt!!

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96 comments to How The Debt Snowball Really Works (Free Tool Included For YOUR Debt Snowball!)

  • whiskey

    Nice little spreadsheet. I like the snowball method best of all and once you get it under control you can focus on your housing. Once you have no pymts, you’ll be amazed at how much $$ you actually have at the end of each month.

    • Thanks Whiskey! I hope this will guide a ton of people out of debt in the upcoming year. It really can be tricky to pay off your debts if you don’t have the right tools. But you’re right, once you’re out, it sure become easy to save!!

  • Suresh Patel

    Great post Derek! Thank you very much for sharing this detailed information..It was very useful for me..

  • The sheet is great. It offers your reader a way to see the difference in savings by lining up the debt as they wish. Every decision is a trade-off, and there’s a cost in paying, say 0% credit card or medical debt (as shown on your sample sheet) with those extra payments vs sending that money to the highest rate debt.

    I don’t dispute that killing off a card completely can provide an emotional reward, a boost to one’s feeling of accomplishment, etc. But, I often say “knowledge is power” and one should know the cost of that decision. A few hundred dollars over 4 years? No big deal. Thousands of dollars? Look carefully at the numbers before choosing the method.

    Consider – ‘snowballers’ suggest you pay your 8 student loans, all zero interest, $10,000 each, before paying that $20,000 18% card. Of course, that’s an exaggeration, but one that easily illustrates why it’s important to look at the numbers.
    JoeTaxpayer recently posted..2016 Year End Tax Tips

    • Hi Joe. Glad you liked the free tool!

      I used to be like you – a hard-nosed financial professional that only believed in the numbers and percentages. Today, I understand much more about the emotional side of money. If you make no progress over the course of a year, there’s about a 100% chance of giving up. If, however, you pay off a $2,000 loan and get rid of that payment completely, you’ll be charged up and ready to tackle another!

      I’d still suggest that people pay off their $10,000 zero interest loan before their $20,000 18% interest loan because there’s a greater percent chance of them getting rid of the smaller debt and continuing their debt payoff journey! Pay a couple thousand extra dollars in interest but paying off the debt is better than trying to save the interest and failing at the debt payoff entirely, don’t you think??

  • Derek, I do not agree with your December 30th reply. If the snowball method costs you “a couple thousand” annually, and you make less than $50K a year, you would have to work 13 months a year to recoup that unnecessary interest.

    The snowball requires nuance. Lets help people work smarter, not harder.

    There are a lot of ways to get a mental boost by paying down debt without just seeing the total number of debts decrease.
    – Use a big “thermometer graph” tally up your debts, fill in the thermometer with the amount, erase the amount each month.
    – Find out “how long would I need to work to pay off this loan inefficiently” See my Work 13 months a year example above. Beating your interest rate is like having a second job, but you get to spend more time with your kids.

    Getting into debt is 80% emotional, 20% false logic. Getting out must be 100% logic. You will feel good doing it as a side benefit.

    • Hi John. I’m a nerd just like you and understand the percentages perfectly. After helping hundreds of people though, there’s no denying that those who pay off a debt early are far more likely to stick with their debt snowball. To help the most people possible, I’m sticking with this method for life.

  • Ben


    I have a housing debt of about $600,000 (my biggest debt) and I think perhaps the spreadsheet cannot accomodate such a big loan.

    I was wondering if you have a spreadsheet that can?

    • Hi Ben. This sheet is really just for consumer debts (pretty much everything except the house). The house payoff should happen after the consumer debts are paid for, you stock up a 6 month emergency fund, you start investing 15% of your income, and you sock away some money for your kids’ college fund. Let me know if you have any other questions!

  • robert

    Hi. Why are the formulas in D23 and D24 different than the cells around them? Excel is stating there may be a problem.

  • Mike M

    Stupid question but is there a way to extend this out to more columns? My student loans, thanks to sallie mae, are broken up into 6 individual loans. Doesn’t really leave any room to include the car, boat and wedding ring. lol. Any help would be great. Thanks.

  • Dani

    Hi Derek, great website and what a wonderful snowball tool you have created! I have linked this page to a Facebook Group, and am wondering if you would mind if I add your worksheet to our files? I would never do so without permission and certainly always give credit to the source and link back to the blog or whatever you may require.
    TIA for your consideration!

  • Lance

    How can I edit this sheet for more than 6 debts?

  • Tony

    I love the spreadsheet but I have2 questions/feedback.

    1. The sheet has “room” for 6 debts, I would love for there to be a way to add more than 6.

    2. As I started playing around with the sheet I put in different amounts in the “monthly extra” figuring the higher the number, the faster you would pay off debt. However the length of time it took for payoff was longer at 175 vs 150. It seemed to work properly at 200 and 225.

    No matter what it is a great tool.

    • Hi Tony!

      1) I’ve had a few other requests to have more than 6 columns for entry. I’ll get started on this and let you know.

      2) Yup – turns out that version one had a bug. The tool has now been updated with a more sophisticated equation. You can download it directly by clicking here.

      Thanks for checking out the tool AND the site!

      • Tony

        Thank you for your reply. I downloaded the file from the link in your reply, and I downloaded the file from the link you posted in a reply to someone below and i still had the bug in both files when i went from 150 to 175. Not sure if I’m doing something wrong or not.

  • Derek,

    I’ve got a spreadsheet of my own I use that calculates interest saved by making extra payments. I’d love to share it with you. Contact me directly.

  • James

    Good morning!

    Thanks for the great spreadsheet. I can tell it took quite a while to make this and is way above my head. Is there an error in the first column? I put my $3,600 car in there and will be throwing an $1,800 lump sum at it, with an additional $200 per month on top of the $283 payment, but the spreadsheet keeps wanting to have my payment be the extra amount I’m putting toward the debt, $200, not the minimum payment plus the extra, which would be $483.

    • Hi James. I plunked in your data to check out how the tool handles it, and it looks appropriate to me.

      Monthly Extra: $200
      One-Time Start-up: $1,800

      Car Balance: $3,600
      Minimum Payment: $283

      With this, you’re saying that you can make all your minimum payments, plus pay an extra $200 per month toward all of them. On top of this, you have $1,800 to get this snowball rolling in the very beginning (nice job by the way!!).

      So what the calculator is doing is:

      $3,600-$200-$1,800-$283 = $1,317 left on your car payment in Month 1.

      In Month 2 and beyond, you’ll see the $483 payment ($283 + $200) until the car is paid off.

      Hope this helps!!

  • Christopher E. Stith

    There are several Android applications in the Google Play Store that also calculate your debt snowball. I’ve not tested any, but a search for “debt snowball calculator” comes up with several highly rated titles. The search even auto-completes.

    • Hey Chris. What’s up? You’re trying to take business away from my site? 😉 I did not perform any search for apps. In my opinion, I’d much rather have an Excel spreadsheet of my own to tinker with instead of some app on my phone or tablet.

  • JP

    Nice spreadsheet, the pay off order is interesting since a lot of my balances are close. It’s currently setup as 1 – 4 – 5 – 6 – 2 – 3. So because the spreadsheet assumes the pay off time frames are in order as entered, when the normal monthly payment completes the balance of 4 without extra help, that payment goes to 5 instead of 2. Odd outcome but the spreadsheet is great regardless!

    • Yup, that can definitely happen sometimes. You’ll find that if you throw more money at your debt each month, it’s more likely that the balances will be paid off in the order of least expensive to most expensive.

      Glad you liked the tool! Share it with your friends. Let’s change the world!! 🙂

  • Marco

    Thank you very much Derek for this “stupid-proof” method!
    I read all the comments above encouraging people to pay off high interest debt first but I totally agree with you, the huge emotional component of seeing a debt (any debt) coming down is what helps sticking to the plan.
    I’d suggest people to put the credit cards away, maybe at the bottom of a lake until you pay them off!!! This has always been my issue: I pay off debt, then I feel like the king of the world and bam here goes the balance up again!

    • Sure Marco! I’m glad that I can provide such a useful tool!

      I’m a big believer in the snowball method (it’s sounds like you are too). The cool thing is, once your debts are paid off and you develop a huge emergency fund and passive income streams, you start thinking to yourself, “Why do I even need credit? I shouldn’t ever have to borrow money again in my life.”

      …this is about the time that you start relating to no one… 😉 But it’s a completely stress-free way to live and I’d recommend it to anyone.

      Pay off those debts everyone! You won’t regret it!

  • Juan


    Wit my wife, we’ve been practicing the snowball effect for several years now without having a spreadsheet and I have to thank you for it because I really like to have the “visual” of it … and I have 2 quick tips for those that are in the same debt “boat” out there…

    I know many will disagree, but it has been working for us pretty well so far:
    1º) on my income tax, I choose on my W-4 to have deducted and “additional” $20.00 per check (I get paid twice a month), so that’s an additional $480/year bucks to the IRS… and I know that $ wont grow interest but… when income tax season comes… I know that I’ve “overpaid” on my income taxes… so that will count towards the “credit/refund”. our initial thoughts were: if it is in the bank (checking or savings), it can be spend it and not “used” properly, so out of sight = not wasted.

    and 2º and most important: we have been using the income tax refund $ to pay-off several accounts for the past 6 years, and our biggest achievement was completed last year when one of my wife’s student loans of 50k was GONE because we used the income tax refund to make a lump sum payment and a very low % rate personal loan from our credit union for the remaining balance (13% APR below the sallie mae/Navient student loan)…

    I’m not saying that we are geniuses, but using the snowball effect specially using the income tax refund as lump sum HELPS a whole lot.

    • Hi Juan. I’m not in love with the method of overpaying on your taxes, but if you have trouble saving then it’s certainly an option. What you could do instead though is automate a portion of your direct deposit to go to a particular debt. That way, you save on the interest and the money is ultimately going to the same place without you noticing any different!

  • Andrew

    Somewhat depressing on how long it’ll take (my newborn will be in college or post grad by then), but it’s a great spreadsheet to use.

    One thing of note: some companies penalize you for paying too much into your debt (case in point: my maximum per month I can put with Wells Fargo for my car is 900, whereas my Chase account will charge a “convenience fee” and drop your maximum if they catch you paying lots off). It’s of course to keep you in debt, so as a side I’d have to edit this to put the extra into savings, then pay it off in a lump sum (which ironically you can do).

    • Haha. Well maybe it’s time to start a side business or temporarily take on a second job!! It’d probably be easier to work your butt off for a year or two than to slowly pay off the debt for the next 20!

  • Tyler

    Thanks for the help. My wife and I started our snowball exactly a year ago this month. In that time we wiped out a small personal loan, all our credit card debt, and a small student loan. I was using a rudimentary snowball tool I built myself and just transferred it all to your tool because, well, it’s awesome.

    In one year we eliminated almost two years of debt from the plan by finding more money through selling, working extra, or just skipping some life luxuries. Our plan started with 6 years to debt free. We are 1 year in and the plan says 4 years to debt free. If this keeps up, we’ll be debt free in 2 years.

    Good Luck to you all!

  • I get that for some people there is an emotional side to debt. I’ve just never liked Dave Ramsey’s debt snowball when applying it to the masses. He appeals to the crowd with no self-control. That’s how they racked up tons of credit card debt in the first place. For those people, extreme measures like going cash only and chipping away at a mountain of debt may be best.

    But for others who can show some self-control and have some financial sense, his methods can be counterproductive. In Joe Taxpayers above example, while our guy or gal is paying off those zero interest loans, that $20,000 credit card bill at 18% is compounding like crazy. Talk about disheartening when you realize the money you’ve thrown away and your debt balance growing like crazy.

    If the dollar difference isn’t that much, then sure, throw yourself a cookie and pay off a small debt if it makes you feel better. But I don’t agree with just paying off the small debts first with complete disregard for the interest rates and the money it might be costing you.
    Go Finance Yourself! recently posted..2016 Review: Where I Invest My Money

    • Hi GFY. This sounds a lot like the debate between paying off your house vs. paying the minimum 30 year mortgage and investing the remaining money in the stock market. Sure, the math might say that it would be wiser to experience the 8% gains in the stock market, but there are two other factors at play that nearly everyone ignores:

      1) Risk – the market won’t always return 8% each year. It might never gain another dollar for as long as we live. Heck, it might even go DOWN in value.

      2) Emotions/Energy/Drive – How many people are so driven to pay off their debts that they live on less and work to earn far more than they ever imagined, which means that they pay off their debts in record time?! Many. How many people are as driven when they invest money into the stock market? Very few.

      We can’t look only at math in these scenarios. People need to be driven, they need to see progress, and they need to feel successful even before the final payoff.

  • Brad


    I entered 4 debts in the sheet, smallest to largest. I put 0’s in for the last 2 available slots. The 6th debt column is populating – and the plan appears to have a shorter full-debt payoff time than the 4th column (where I would expect to see the true anticipated payoff month). How should I read that?

    • Hi Brad! Ignore the 6th column – that was a minor formula glitch. I have corrected the file in the post – if you want to re-download, simply click here.

      Your question about the last debt paying off faster – that happens sometimes when the minimum payment is fairly large or if you’re really close to the end of the payment terms. That’s okay. It doesn’t change anything. Your debt snowball is done when all of the rows read zero, and the you’re debt free!!

  • Robert Strand

    A key point: It DOES Pay to put your higher interest loans earlier. In the example spreadsheet, swap columns 2 & 3 and save over $201!

    • But how much longer will it take to pay off that higher dollar debt?? 8 months?? Twice the amount of people will probably quit before they reach it. That’s the point Robert. Emotions over math on this one. I’d rather stay energized and actually pay off all my debt than save $200 and likely stay in debt forever.

      • Robert Strand

        I have to disagree, speaking from several years of experience. Once you have the plan set, it’s very energizing to see the balances decline.
        Another key is to put the loans with the largest monthly minimums first, as they give you the biggest snowball effect.

  • Jared Griffes

    Downloaded Automated_Debt_Snowball_Calculator2.xlsx, I think you still have a bug.

    I’m not seeing the extra debts showing the strange negative balance anymore, but once the balance of the 1st debt is gone in columns, the 1st debt payment + extra doesn’t move to the second debt, and so on to the 3rd/4th, etc. Any ideas on this?

    • Jared Griffes

      As a follow up, this appears to be happening with the following:

      No One-Time Start-up
      Extra Debt Payments of $200 or less

      It does work with a One-Time Start-up of $1 and extra debt payment of $199

      • Now THAT was a weird bug! Because of one hundredth of a cent!! Fixed. Try the new file here. If you find another bug, keep it to yourself. 😉 HA! Just kidding. Let me know! We want to make this tool the absolute best we can so that thousands of people can be helped! Thanks Jared!

  • Thom

    This is really interesting! I was working on trying to figure out this very thing last year and I didn’t know that there was a real name and method! I admit to being pretty poor at managing finances beyond setting up autopayments to guarantee that things are being paid on time. I think it’s great to see just how much a chunk up front and little extra each month affect the overall time it takes to pay down.

    I was wondering if there was a way to add a step 2 column. While I currently direct deposit a portion of my check directly to savings, part of my plan is that as we pay off debt, I want to increase the amount deposited into savings. Is there way to add a column that would add up? I would like to see how, once the debts are paid off, if I shift that payment total to be an additional monthly deposit into a savings account. My wife and I are thinking of setting a goal of 3-5 years to have our existing debts paid off and looking to move. Would be great to get an idea of what kind of savings we would have after 5-6 years without any additional cash input.

    • Hi Thom! Thanks for the comment and the idea. I think you’re reading my mind. One of my future posts was going to be the debt snowball in reverse. In other words, once you’re out of debt, how quickly could your savings and investments grow. I haven’t started it yet, but be on the lookout for this post in the upcoming weeks!

  • Alex

    I think this is a great tool and visually makes paying everything off look so much more achievable, let alone actually doing it! Quick question – two of the four credit cards I’m working at paying off are 0% interest (one that ends in February 2018 and the other that ends in June 2018). Would it still make sense to pay those off first? If we’re talking about the debts in terms of smallest to largest the two 0% cards are 1 and 3 respectively. Depending on how much I get back from my taxes and what I currently have in savings I may be able to wipe out most, if not all, of that fourth card, the largest debt. Or I’d also be able to completely wipe out the first two cards and start working on cards 3 (the other 0% interest card) and 4. I just feel like it makes more sense to throw everything at cards 2 and 4 first since they are interest bearing, but I could be wrong! Appreciate any insights!

    • Hi Alex! Great question!

      I’m a fan of the debt snowball through and through, which means line them up from smallest to largest regardless of the interest percentages. By paying off 2-3 cards in a short amount of time, your mind will tell you how awesome you’re doing and you’ll then quickly pay off the 4th.

      When we pay off debt based on the level of interest, this can sometimes set us up with a huge debt as our first to pay off, and it may take a year or more to do it! This, obviously, it’s very emotionally stimulating, so many people quit before they even pay off one debt.

      In your instance, I also suspect that those 0% interest cards are actually deferred interest. Once February 2018 and June 2018 roll around and you still have a balance on those cards, you might get slammed with all the interest that was accruing since the beginning. For this reason too, I’d say just pay them off smallest to largest as fast as you possibly can.

      Best of luck to you Alex!

  • Hi Derek,

    Well-made spreadsheet; I just share it in my (very newish) newsletter.

    As a numbers guy (as you are from what I can see), I’m not a fan of the Snowball Method, but I’ve seen first-hand how it can motivate many people to tackle a mountain of debt.

    I’d say, however, if someone has a 18% interest rate credit card with say a $10k balance, they should at the very least try to park it, so to speak, in a LOC or in a lower interest rate CC while dealing with their lower balance, lower interest debt.

    • Hey Chuck. Thanks for sharing! Sure, I wouldn’t mind if someone found themselves a better rate on the 18% credit card, but the point is not to refinance and save a few hundred bucks. It’s to get rid of your debt, and get rid of your debt now.

  • sharon griffith

    downloaded the excel file from your website but can’t “enable editing”. how can i make it work? thanks and can’t wait to start using it.

    • Hi Sharon. There shouldn’t be any trick to it. Just click “Enable Editing” and put in your numbers! If that still doesn’t work, maybe you don’t have Excel enabled on your computer. If that’s the case, go to Google sheets and upload the sheet there. It’s a great Excel alternative. Let me know if you have any other issues!

  • sharon griffith

    thanks again. i do have excel on my computer. will try the google sheets.

  • Shane Leiser

    Hi Derek –

    First, thanx for this great tool. I have tried to build one like this, but not tech savvy enough to make it practical. This is exactly what I’ve been looking for. Have shared it with my six adult kids who are using it as well. That said, a question for you – – I’ve tried to play around with numbers for Cell H12 to see how much a larger starting sum would pay down the total debt, and I’m thinking that cell is not working. I can put “0” or “5000” and it makes no changes in the month to month charting in the graph. Am I misunderstanding it’s intended use?

    Thanx much –

  • Shane Leiser

    Thanx for the reply, Derek. My numbers are 900, 1800, 2300 and 8100. As I mentioned, inputting different numbers in H12 does not alter the graph below.

    Thanx for any input…

    • Hi Shane. Works totally fine for me! With a monthly payment of $400 a month, a $0 one-time startup takes 21 months. A $5,000 start-up will shorten your debt payoff to 13 months.

      When inputting your numbers, be sure to “Enable Editing” in Excel. Or if Excel simply doesn’t work for you, you can always upload this doc into Google Sheets! I know it works there too.



    • Hi Jasmine! Way to take the first step toward knocking out your debt. I’m so excited for you!

      With this tool, you simply look at the last column of debt that you have, search down the page for the last payoff row, and then look to the left to see how many months it takes you to pay off the debt. If it takes 24 months, that means you’ll be debt free in two years!


    Oh… ok so I got 19 months.

  • […] How The Debt Snowball Really Works (Free Tool Included For YOUR Debt Snowball!) (79) […]

  • Matt

    I took a look at your spreadsheet and I think you had a few things mixed up. You were adding monthly interest after making the monthly payment in every period except the first one (which had no interest charged?). As far as a “look how quickly you can pay off debt” tool I’m not sure it matters much. But it’s less accurate as monthly interest has to be paid off first before principal is usually applied. The copy I had seemed to have a few cells where the formulas were off, I think other commentors have already pointed that out and maybe been fixed in the live version of the sheet.

    The other thing is you have a 1 time payment at the outset. To really make the sheet useful it’s nice to be able to project one time payments on some reoccurring schedule (a yearly bonus maybe). I modified a sheet I use to achieve the same “snowball” affect but with more flexibility to change whether or not you apply the extra payments to the smallest balance, or if you want to skip certain debts (for example those with 0% interest).

    I also included an interest only HELOC (the difference being the minimum payment is set to a formula that is equal to monthly interest–typically how home equity lines work).

    Hopefully I got all the settings right on google for this to be shareable:

    • Hi Matt. Month one was basically the “current month”. I wasn’t too worried about the interest here because it’s applied at the end of the month. Like you said though, it really don’t matter much in the grand scheme of everything.

      The multiple “one-time” payment is a cool one – nice suggestion! Maybe I’ll have to add that feature to mine at some point.

      I didn’t quite follow your spreadsheet with my 2-minute glance, but I’m definitely leaving the link there if it can help someone else. Thanks for sharing!


  • […] about the same time, I also came across an automated debt snowball spreadsheet. I promptly uploaded it into my Google Sheets and put in all my information, both dreading and […]

  • Mike

    First of all, thanks for this tool, you’ve done an awesome job with this and it is very well put together and very useful. Just have two small tweaks that I made to my own personal version of this tool and thought I would share. Do with this as you please…

    Don’t know if this has been addressed, as there are a lot of comments above this, but I browsed through quickly and didn’t see it.

    For your balance calculations, I was confused with how you were handling the calculation of the interest portion of your payments. For example, in cell C22, you are taking the balance in cell C17 and subtracting the payment in B22 (after checking to make sure the balance is greater than 0), however that doesn’t take into account the interest that would be charged on that outstanding balance (it’s doubtful you are making that lump sum payment on the same day you took out the loan, right?). Instead, I am making the assumption that you are making this payment after a month’s worth of interest has accrued.

    So, in my spreadsheet I changed the formula in C22 to the following:


    Next, when you get down to cell C23 (the balance after the next payment is made), you are taking the balance, subtracting the full payment amount, and then calculating interest. Instead, I think you should calculate the interest on the outstanding balance, then subtract that from the payment, leaving just the principal portion of the payment to be subtracted from the outstanding balance. This is how I set it up.

    Instead of this (your calculation):

    I did this instead:

    I know, it seems minor, but when I made these two slight changes to all of my debts it changed my overall debt repayment by nearly ten thousand dollars. I am using this tool to not only forecast my own debt repayments, but to also forecast some rental property purchases in the near future, so these changes might not make as big of a difference to some users with smaller debts.

    Anyway, thanks again for the tool. Hope my comments are helpful.

  • […] How The Debt Snowball Really Works (Free Tool Included For YOUR Debt Snowball!) (85) […]

  • […] site. Sometimes free isn’t always better, but in this case I might as well have struck gold. The spreadsheet was perfect and exactly what we needed. I was surprised and thrilled to discover we could have this massive debt paid off in two years or […]

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  • Chris

    This spreadsheet is amazing! I really am impressed and thankful for the ton of time and effort you put into it and the fact that you provide it for free! You the man!

    For all the people that are complaining in which order they should pay their debts off, if you really prefer to pay off debts with higher percentage rates first, then just place them in the spreadsheet in that order. Derek’s recommendation to put them in the order of smallest to lowest, so that people keep motivated, is just a recommendation and the spreadsheet just computes them in the order they’re added anyways.

    • It did take quite a bit of time (don’t look at they formulas…they’ll make your head spin a little), but I’m glad I did it so that people like you can benefit from it. Good luck paying off your debts Chris! Let me know when they’re gone so I can give you a shout-out! Wooot! 😉

  • […] How The Debt Snowball Really Works (Free Tool Included For YOUR Debt Snowball!) (90) […]

  • […] people pay off their debts from smallest to largest and ignore the interest rates entirely,” he writes on his blog. “Sure, that 18% credit card debt might freak you out like crazy. But if you tackle the smaller […]

  • […] pay off their debts from smallest to largest and ignore the interest rates entirely,” he writes on his blog. “Sure, that 18% credit card debt might freak you out like crazy. But if you tackle the […]

  • […] How The Debt Snowball Really Works (Free Tool Included For YOUR Debt Snowball!) (93) […]

  • Suzanne

    Thanks for your tool. It is so much better than the other spreadsheets around. We pay off our house this month — and it looks like all our other will be paid off in a year!

    There’s light at the end of the tunnel!!

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