Thanks to Lisa, who commented in my post on the power of the snowball, for prodding me to make a template for others to follow.
The debt snowball method can be a very powerful force when implemented properly and with sufficient planning. If you’re not well-versed in Excel and the formulas, it can be hard to set up a spreadsheet for yourself. I’ve taken care of the hardest part for you, all you have to do is plug in your numbers
This version of the template will allow for up to 10 debts to be forecast and does have some limitations (that I hope to eliminate in a potential future update):
- First, the snowball will roll from the left to the right, so you need to make sure the balances to the left disappear before the ones on the right. If a debt in the middle of the sheet is paid off before one on the left, the first debt to the right of the newly-paid debt will receive the snowball benefit. This is due to the limitations of the formulas I used (had to prevent circular references).
- Second, the spreadsheet is set to calculate over 100 months. If you need your forecast to extend beyond that range, you’ll need to copy the whole bottom row and paste it to the bottom of the table as many times as you need. There are other more efficient ways to do this, but for the sake of keeping the instructions simple, that will be sufficient.
- Third, variable interest rates are not handled by this spreadsheet. Your best bet, if you have a variable rate loan, is to estimate high on the interest rate and be pleasantly surprised later when you pay it off early.
- If you happen to use Google Spreadsheets to open the spreadsheet, there seems to be a bug preventing display of the payments on the first debt. I don’t yet know what’s causing that one – it opens fine in Excel…
Using the spreadsheet is fairly simple – all of the work is done for you through formulas. I prefilled the spreadsheet with my original snowball forecast (the one I wrote about before was a further customization) and all you’ll have to do is edit the cells in pink to match your data. To use this template, you’ll need to know the following information:
- The date your forecast will begin
- The information about your various debts
- Debt Name
- Monthly Payment
- Interest Rate
- Balance as of the beginning of the forecast
Once you’ve gathered that information, it’s just a matter of plugging it into the spreadsheet in various orders to see what happens over time. My example data illustrates the “lowest balance” method, but that is only one possible way to eliminate your debt. Play with your numbers to find your most efficient snowball and then stick with it. In time, you will see the benefits of the snowball as your debt gets plowed away.
Click for a graphic sample:
Click to download: Snowball Forecast Template
If you come up with improvements for the spreadsheet, let me know and I’ll add them in. There’s no reason we can’t come up with a wonderful solution as a community. And beyond this spreadsheet, there are many other online tools to help you with your snowball planning. If this spreadsheet doesn’t fit your needs, just hit up Google and find the right tool for you. Your debt payment plan is too important to leave in the hands of one tool or method. You owe it to yourself to find the most efficient plan for you!
