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    How To Build And Use A Debt Snowball Spreadsheet


    Mounting debts are one of the most common financial issues Americans face. A large financing load can leave a person feeling suffocated and helpless, especially if they can’t pay down their balances.

    Fortunately, several reduction strategies exist to help borrowers organize their payments in a more effective way to repay their balances quicker.

    While many strategies exist, we’ll focus on the snowball method. Keep reading to learn what it is, how it works, and how to build a debt payoff spreadsheet.

    What Is The Debt Snowball Method

    The snowball method requires the borrower to pay off their smallest arrear first, regardless of the interest rate. They do this by making the minimum payments on all other outstanding balances and devoting the remaining funds to their smallest debt.

    The debt snowball method relies on the momentum that one builds up as they pay off their smallest arrears first. Many people who utilize other reduction strategies, such as the avalanche method, have difficulty staying committed because they see very little progress.

    How To Create A Debt Snowball Spreadsheet

    Although free debt snowball spreadsheets exist on the internet, it’s usually more useful to build one from scratch. This can be accomplished using a variety of programs, but for the following example, we’ll develop our debt snowball spreadsheet in Google Docs.

    Step 1: Compile A List Of All Outstanding Consumer Balances

    The plan's first step involves compiling a list of all outstanding balances before ranking them from smallest to largest. It’s important only to include consumer debt, such as credit cards or revolving lines of credit. This is because other types of financing, like mortgages, are typically on fixed payment schedules. 

    For the purposes of this example, we’ll use three lending products.

    • Visa card with a balance of $1,250.00 at 19.99%
    • Mastercard with a balance of $2,000.00 at 17.99%
    • Line of credit with a balance of $3,650.00 at 10.99%

    Step 2: Enter Payment Dates And Debt Details Into The Spreadsheet

    The next step is to enter due dates and relevant details into the spreadsheet. As shown in the image below, payment dates are listed vertically down column A while each credit type, along with a payment cell, is listed horizontally in cells B through G.

    Step 3: Add Interest Rates And Calculate Monthly Payments For Each Debt

    Let’s say we have $250.00 per month to put towards our repayments. Since the Visa card involves the smallest amount, we’ll make only the minimum payment on the Mastercard and credit line, which comes to $33.50 and $58.00, respectively. This means that we’ll have $158.50 to put towards paying down the Visa balance each month.

    For those having trouble formatting some entries as dollar amounts, all one has to do is click the dollar symbol in the toolbar, which has been highlighted in the accompanying image. 

    Step 4: Use Payment Amount And Interest Rate To Create A Payment Formula

    One excellent feature of spreadsheet software is the ability to use formulas (also referred to as functions). In this case, we’ll create a debt snowball Excel and Google Doc formula, which we can use to calculate balances after payments.

    We must first begin by determining how much monthly interest is being charged per loan. Luckily, this is quite simple to figure out using the following formula.

    (Total Loan Balance x Interest Rate) / 12

    Using the Visa card as an example, we would get (1250 x 0.1999) / 12 = $20.82

    This gives us an average of how much interest is charged per month. Once we have this figured out, we can create our function by entering the following formula into cell C3.

    “= (C2 - B3) + 20.82”

    Once this has been entered, it should calculate how much the remaining balance is after every payment.

    Note: To extend this formula to every payment, simply highlight the cell C3, click and hold on the little blue square in the corner. Drag it down until the last payment date, in this case, C14. Once released, all successive balances will fill in automatically.

    As we can see, by making a payment of $158.50 per month, it only takes nine months to pay off the Visa card. 


    One of the significant advantages of using a debt snowball spreadsheet in Google Docs or Excel is that it allows us to enter different payment numbers and compare how long it would take to repay different amounts fully. Because of this, it’s an excellent tool for creating a viable snowball finance strategy.