A Great Tool For Anyone Who Wants To Get Out Of Debt
I recently came across this wonderful new tool to help those that would like to put there own debt plan together. I’ve been playing around with it and found some very useful functionality. This tool comes thanks to Vertex42.
First off you will want to download the tool which when downloaded can easily be opened in excel. To download the file you can click here and you can download the spread sheet.
The tool itself
Once inside the spreadsheet you will see a few things. Bear with me though I am going to give you a bit a detailed version of this tool but if you have already dealt with this before you can skip this part.
- First, you will see a balance date. Enter in the most recent date of the balances you have. This way they can calculate how long it will take you to get out of debt.
- Second, enter in the creditor information, balance, interest rate, minimum payment you are making, and then you can customize it to pay it off the way you prefer. 1 being first to be paid.
- At the bottom of that chart you will see the total balance and the total payments you art making.
- Below that you will see the total monthly payment. This is the payment that will have the extra payment along with the minimum payments.
- Then there is the Initial snowball payment. This is the amount you would like to throw towards the minimum payment. I recommend that you do at least $50.
- Next, choose your strategy. There are six to choose from.
- Snowball ( Lowest Balance First) This is my personal preferred way to setup the plan because by paying the lowest balance first you will see the quickest results.
- Highest Interest Rate. Depending on if you have a lot of credit cards with high interest rates or loans with higher rates this may be a better option.
- No Snowball. In this option it will show you what would happen if you didn’t apply any extra payment towards your debt. I like to use this option as way to compare myself against the actual snowball plan. This way I can see how much sooner I will be debt free. However I will suggest this do not use this as a way to do you debt plan. Use this option only to review your differences between options.
- Order Entered In Table. This is just how you entered them into the spreadsheet. You may have one debt you would prefer to pay off before another.
- Custom High and Low. This allows you to pay off the debt with either the highest balance or the lowest balance.
- Lastly you will see a chart that will tell you what the result will be if you would pay off this debt with the strategy and methods you have chosen. It will even show you the month and year you will have this debt paid off.
Payment Schedule
This is my favorite part. If you click on the tab in the lower left hand corner that says “payment schedule” you will see a list of all the creditors that you have there payment and even the total interest you will pay to them once you have paid off those debts.
You can also customize the way you would prefer to pay off your debt on this page as well.
On the bottom half of this page you will see your entire payment schedule if you would decide to pay off your debt with the strategy you prefer.
If you have used this tool let me know what think about it? Has it helped you? Any ways to improve it? Leave a comment and let me know.
{ 2 comments… read them below or add one }
I thought it was a nice tool, unfortunately, the accuracy is not there… the problem is
it doesn’t take into account what types of loans they are (how they are amortized)… for
example, my credit cards continually charge interest, but with a regular loan, the interest is figured in already and is not continually increased (the way this spreadsheet is set up).
So, my pay off dates are all skewed since I have 3 credit cards.
That’s my .02.
Thanks,
Tim
What (if any) benefit is there in paying 2X per month, instead of once per month ? Can the spreadsheet be modified to run that calculation ?