Using a debt spreadsheet as a motivator

In 2007, when I started to wrap my head around my family’s disastrous finances, I made a list of all our debts. There were so many separate debts that I divided them into mortgage, personal/credit card and student loans. All told, we had 4 mortgages/home loans, 9 personal consumer debts (credit cards, overdraft balances, family member loan) and 3 student loans. And we knew we’d soon have more student loans when my husband went back to college!

To help me further organize them so I could figure out a way to attack them, I started — what else? — a spreadsheet! I’m no expert in Excel, but I can do basic formulas, and I gradually added lines and columns with various formulas so I could analyze our debt in different ways. Eventually, my spreadsheet could tell me:

  • Amount of each debt, each category and total debt
  • Interest rate of each debt, and whether it was fixed or variable
  • Minimum monthly payment
  • Minimum that went to principal (vs. interest) out of each payment
  • Number of months it would take to pay off at that rate
  • Number of years it would take to pay off at that rate
  • Number of months and years it would take to pay off all debt if I paid extra each month
  • The percentage of my total payments not going to principal (going to interest and/or fees)

When I started years ago, the numbers were starkly horrifying. But seeing everything laid out made it easy to choose which debt to pay extra to first. And, it gave me a HUGE push to get going on paying off the debt. I hated seeing how many debts I had, and how long it would take to pay them all off at the current rate (I think it was 25 years back then!). The “If I pay $x extra” line was to give me some comfort that my extra effort was shaving years off that scary amount.

Here’s a fictionalized example of what it looks like:

Sample debt spreadsheet

Debt is such a secret and hidden thing. Except for the very few people who have directly told me their situation, I have no idea which of my friends carry debt and which ones are debt-free. Since it’s not something most people know about one another, it’s also easier to sweep under one’s own rug. My awareness of my own debt situation — the exact amount, interest rates, etc. — faded in and out over the years. Sometimes I’d face it head-on, but other times it was too easy to shrug, decide I could do nothing about it, and just ignore it — and likely rack up more debt while I was pretending it didn’t exist.

Once I set up this spreadsheet, though, there was no going back for me. And it’s not only prompted me to throw tons of extra money at our debts, it’s kept me from getting into more debt. Anytime I’d even contemplate putting something on a credit card without knowing how I’d pay it off, the specter of having to move the numbers on that debt spreadsheet up instead of down made my blood run cold. Unless we majorly upgrade our home and take out a bigger mortgage than our current home debt, I just don’t see us ever taking on debt again without a specific plan to pay it off before we pay any interest on it.

So I encourage you, if you do have debt, to come clean with yourself. To put the data in black and white, see where you are, see if you need to redouble your efforts to reduce or eliminate your debt. To that end, I offer up a template of my spreadsheet. The debt and payment numbers are all made-up — I have no idea if they coincide with the equally made-up interest rates listed. But the formulas are all in place, so if you plug in your own debt amounts, minimum monthly payments and minimum amount that goes to principal, you’ll be able to see how many months and years it’ll take you to pay off each, and to pay off the total. And you’ll see the percentage of your payments that go toward interest and fees.

And, if you want to see how much sooner you could pay off your debt if you paid a certain amount extra each month, click into the cell to the right of “If I pay.” I plugged in $300 as a random extra amount, but you can replace that with the amount you think you could come up with each month to put toward debt.

So, how well has my spreadsheet helped me do? Well, you’ll recall I started with 16 separate debts, and we added two more student loans when my husband started college, so that took us up to 18. And now, we’re at seven separate debts, with a plan to pay off three of them within the next year and a half!

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