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I know what you might be feeling. That dreaded sense of overwhelm when it comes to thinking about all of the debt you’ve racked up and not knowing how to get rid of it.
You may not think it’s possible to pay off your debt that’s built up over time, but with the right tools and mindset it is.
If you’re ready to take control of your debt and tired of it controlling you, read through this post. You’ll find the how-to’s and why’s for a debt tracker spreadsheet that will give you a solid action plan and a tangible escape plan for your debt.
What is a debt sheet?
A debt tracker spreadsheet is a system for monitoring debt, debt payments and how long it will take you to pay that debt off. This tracker can be over-the-top simple (and automated) or it can be accomplished with a more manual pen and paper method. It all depends on your preference. For this post, we’ll go over what it looks like to use a spreadsheet that will help you conquer your debt.
It’s an absolutely crucial component to paying off debt and understanding the how-to and also what the best approach or sequence is. If you’re looking for a tool to give you the rundown of exactly what you’ll need to pay every month, this is for you.
Why You Need a Debt Tracker Spreadsheet
Having a spreadsheet that tracks your debt can be helpful for many reasons. It will not only help you organize but will help you to visualize what you’re up against. Here are some of the many benefits of starting a debt tracker that you might not have thought about.
1. | Debt Organization
One of the most invaluable steps you can take with debt is to just admit it’s there. To see it in front of you and have all of the details you need organized in one place.
It can be overwhelming to know that you have a lot of debt but have absolutely no idea where to begin. What is your total balance? What are the fine details (interest rates) and when should you expect to pay it off with your current payment approach?
Taking down all of these details from your student loan accounts, bank accounts, or credit card statements allows you to see the bigger picture. It gives you back a sense of control. Listing all of these debts in one spot might feel challenging, or like an emotional roller coaster to be more exact, but it’s actually very useful for this spreadsheet to work and in achieving debt organization.
Related: Budgeting tips for beginners
2. | Stay Motivated While Paying off Debt
It can take a lot of perseverance to pay off debt. It’s not always new and exciting, but rather, it can often be discouraging or difficult. You’ll have to make sacrifices along the way and constantly encourage yourself to keep at it.
The ability to have everything organized in one place and start to build a plan of attack for your debt will actually give you motivation and courage to keep going. You’ll see that your plan is working slowly but steadily, and you can remind yourself of this every time you consider quitting.
You’ll also have a specific timeline for when you’ll have paid off your debt. It won’t happen overnight, but you’ll know you have a date that once it’s reached, you’ll be debt-free! Having a specific date gives you hope. It beats the overwhelm and anxiety of knowing you have debt but having no idea what you owe or when it will go away.
3. | Making Smart Debt Decisions
Once you have the visualization of what your debt looks like and what it will take to find the right debt payoff strategy, you now also have actual numbers. You can plan how to pay down this debt and how much extra money you might want to throw at it every month.
You’ll be able to choose the best payment method (avalanche vs. snowball – more on this later) that you’re most confident and motivated by.
You’ll also be able to see what your debt balances have evolved into and what has caused them. You’ll find familiarity or patterns for your weak points and can make plans to stay away from the places or things that trigger you to spend more money.
4. | Choosing your Debt Repayment strategy
One of the components of debt repayment that many people don’t think of is strategy. Will you pay off your highest interest rate debts first or your lowest balances? You’ll need to decide and prioritize which comes first.
The coolest thing about this particular debt tracker spreadsheet is that it helps you to see the different scenarios or outcomes for both scenarios.
If you want to see what it would look like to payoff your lowest debt balance first, you select that option and watch the outcome play out. If you don’t like that option or want to see the opposite approach, select the higher interest rate strategy and compare.
With this useful data, you can make informed decisions off of real numbers and create a strategy that works best for you.
Why a Debt Tracker Spreadsheet Works
So what’s so great about having this debt tracker? It may not look like much (especially if you’re working with bare-bones spreadsheet material), but it can be one of your biggest lifelines in getting your debt under control.
By listing out all of your debts outstanding along with interest rates that follow suit, you are reminding yourself of what has already happened. You’re not burying it or trying to deny its existence. You’re shaking debt’s hand and letting him know that it’s “game on.”
It’ll be a visual reminder that consistently shows you what you’re working towards. A list of all of your debts at first might terrify you, but it’s a great tool to motivate yourself. You’ll watch your debt gradually drop from your disciplined and consistent actions.
This tracker will help you visualize when you can actually BE debt free!
- A visual reminder of what you’re working for!
- A great way to keep yourself motivated
- Breaking down of overwhelm because of the spreadsheet’s simplicity
- Gives you a clear picture of how much debt you have and when you can expect to pay it off
- Gives you back a sense of control over your debt and finances rather than feeling paralyzed
- Gives you an estimate for when you will become DEBT FREE
How To Use The Free Debt Tracker Spreadsheet
How do I track down my debt?
Using the free debt tracker spreadsheet from Vertex 42 is actually insanely easy. It takes a little bit of initial setup, but once that’s done, you’ll be well on your way to finding debt organization as well as a payoff strategy moving forward. Here’s a quick overview or walk through of how to use the free tool.
1. Make a List of all debts
- Creditor Column — Notice here the first column that’s labelled “Creditor.” You’ll add details for the creditor here. This can be either the name of the credit card, bank, or just a general description of what the debt is (car loan).
- Balance — Input the amount outstanding that you still have to pay off on each individual debt. Above, the auto loan #1 shows that I would still need to pay off $3,200.
- Rate — Interest rate (APR) for each debt item. Most of my credit cards have over 20+% interest rates, how crazy is that??
- Payment — Input the current minimum payment for each debt item (i.e. minimum payment necessary for a credit card or loan). This can also be the amount that you want to pay off per month for each item above its minimum payment. For example, my credit card #2 minimum payment might be $50, but I tell myself that I want to pay off $110 so I input that instead.
Recognize your total balance. It might seem like a lot, or it might bring on a little bit of anxiety at first. But it’s time to congratulate yourself for creating this list and taking the first brave step to paying off your debt!
2. Determine your monthly payment amount
Figure out the amount of money that you can afford to use to payoff your debt each month. This amount should be greater than the total amount you see in Column E above ($270).
In this example, I’ve determined that my minimum payment might be $270, but I actually can afford to put $800 per month towards my debt. Once you have this number for yourself, input that into the box in Column C marked “Monthly Payment.”
3. Choose a debt payoff strategy
This is arguably one of the most important steps of this debt tracker. It’s time to analyze your balances and decide which payment strategy is right for both your debt as well as for yourself.
You’ll need to uncover what method is going to motivate you the most. If you see in the image above, there are several different methods you can choose from with this spreadsheet. The most common, and the ones that I would look at, are the top two.
You’ll need to determine if you want a plan that pays off the highest interest rate debt first or the lowest amount of debt (avalanche vs. snowball method). Both are great methods that work well with different people and situations. Go with that one you think is best for your situation and just get started.
4. Understand your payment schedule
Once you’ve selected a debt payment method (see #3), you’ll be able to see a forecast of your payment schedule. This will include the total amount of interest that you’ll pay on each debt listed, how many years it will take to payoff, and the month that you can expect to have that debt paid off.
You can toggle between the various methods by using the drop-down selections. Notice the amounts of interest you’ll pay for each debt you have and factor that into your decision.
It might feel a little soul-sucking at first to see the timeline for your debt repayment plan, but it will allow you to see what you’re up against. It will also allow you to track the progress you’re making every time you make a successful payment.
5. Make monthly payments (and write down extra payments)
Once you’ve selected a debt repayment method, you can use the “Payment Schedule” tab to see a schedule by month to track your monthly payments. Each month follow along this schedule to confirm you’re making the correct amount of payments and adding in any extra income you are able to put towards debt (Column D, highlighted in yellow above).
Be sure to update your debt tracker spreadsheet every couple of months as your minimum payments might change depending on the type of debt. You can also re-evaluate your repayment strategy, which brings me to the next section…
Evaluate Your Payoff Plan
As discussed above, there are two major debt repayment methods that you should choose to follow when paying off debt. The Snowball Method and the Avalanche Method. Both are great for different reasons and play on different logic. Read through these descriptions to determine which one you should use.
Debt Snowball
The Debt Snowball Method is known to be the most motivating debt payoff strategy. It plays on the psychology of seeing your lowest balance debt paid off faster. It’s an effective method for anyone who might need the small victories to keep motivated throughout your debt payoff journey.
The method is simple: Pick your lowest balance and put all of your extra money into that balance until it’s paid off 100%. Once that is paid off, move on to the next lowest balance and repeat.
Debt Avalanche
The Debt Avalanche Method is known to be the most financially sound payoff strategy. Why? Because you’ll be targeting your debt with the highest interest rate.
So the method is simple: Find the debt balance with the highest interest rate and pay that down first. Use all extra funds to put towards this balance while you pay minimum balances on all other balances.
This method is great for those who may not need the “little victories” that the Debt Snowball Method offers in order to stay motivated. You’ll minimize the amount of interest you’ll pay in the long run while you’re paying off debt. This is a victory that the Debt Snowball method doesn’t offer.
For myself and my situation, I actually struggled with this method to begin my debt repayment strategy. As much as I wanted to like it (as it makes sense financially), I just couldn’t stay motivated. I prefer the snowball method.
Download the free excel debt tracker spreadsheet
The debt tracker spreadsheet might seem a little overwhelming or confusing at first. Especially if you’re not used to being in spreadsheets or using them on a daily basis. Don’t worry on this front as this spreadsheet is made to be extremely simple so anyone can use and benefit from it.
Follow the instructions above that I’ve referenced or check out the website and the tracker instructions listed to get it set up. Once you have it setup and working, you’ll be on your way to living a debt free life!
To sum up…
Debt can be an anxiety producing topic for all of us. We often get so overwhelmed that we don’t even know how or where to begin to take action against it. Thanks to the magic powers of excel (or Google Sheets), you have a powerful tool that will help you make the first of several steps to payoff your debt.
What has been the biggest roadblock for you getting your debt under control? Did this debt tracker spreadsheet help you or have you found another tool that has helped you?
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