Debt Snowball Spreadsheet Template + Guide (Debt Free 2023)


Google Sheets has always been helpful when you need to calculate your earnings and need a way to organize where half of it goes. One of these forms is known as the debt snowball spreadsheet.

In this article, we’ll detail what a debt snowball method is, how it works, and how to create a debt snowball spreadsheet in Google Sheets. For beginners, we will also provide you with a simple, free debt tracker spreadsheet template to use. Read on to learn more.

What is a Debt Snowball?

The debt snowball method (i.e., using a debt snowball worksheet) is a do-it-yourself debt reduction strategy. It helps a person who owes multiple accounts pay off the smallest balances first while paying the minimum payment on larger debts.

Dave Ramsey is well-known for popularising the debt snowball spreadsheet, also known as a debt payoff spreadsheet.

The basic idea of the snowball debt spreadsheet is to pay off your smallest debt as quickly as possible. You may have noticed that smallest debt is paid first, not highest interest rate, you will find out why later in this article. When the smallest debt is paid off, you pay the payment to the next lowest debt instead of spending it elsewhere in your budget.

How a Debt Snowball Spreadsheet Works

So let’s jump right into it. How does this process work, and what can you do to make it a good debt snowball?

Setting up the debt snowball strategy is simple and involves just a few steps, which will be mentioned later on in the article.

You must first get organized to answer our question and make a good spreadsheet. By that, we mean you should make a list of all of your debts. Sort them in ascending order, with the smallest balance at the top and the largest at the bottom.

Ignore interest rates, monthly payment amounts, and other loan features as you compile your list since you must first concentrate solely on balance.

After you’re done getting organized, you must pay the minimum. You need to pay the minimum required on all your loans and credit cards to avoid being charged fees and penalties, and your credit score may suffer.

After you have gotten that out of the way, go ahead and pay extra on your smallest balance. By that we mean, put any extra money you have each month toward the credit card or loan at the top of your list.

Your goal should be to pay off the smallest balance first. After you have paid off your smallest balance, cross it off the list and proceed to the next-smallest balance.

After you have done everything mentioned above, add everything you were paying toward the smallest loan to the next, on top of the minimum payment you were already making. As you pay off each debt, your total payment for the next one grows larger, which makes the snowball method so helpful in paying off debts.

To see this method in action, lets assume that If you pay off a student loan with a minimum balance of $50 and your next smallest loan payment is $100, you combine those payments. Instead of paying $100 as your minimum payment, you now pay $150, which helps you pay off your debt faster.

When that loan is paid off, you apply the $150 to the next smallest loan. You go through the process again and again until you are debt-free. The snowball calculator can be used to pay off your credit card debt, student loans, or any other type of debt, proving to be beneficial and effective.

The Different Methods

So far, we’ve talked a lot about the debt snowball. But what other options do you have? Given your circumstances, could we try a different approach in using a debt tracker spreadsheet?

Let’s look at some of the other debt-reduction options to see if one will work better for you.

Variation of the Debt Snowball

The first method we will look into is the debt snowball variation. This method is for those with similar debt balances in their snowball but very different interest rates. Now to see it in action, Assume the following is your debt snowball strategy.

  • Your First credit card is $1000 at 12% interest
  • The second credit card is $9,000 at 9% interest
  • Third credit card: $9,500 at 28% interest
  • Credit card number four: $12,000 at 14% interest

Take a look at Debts #2 and #3. The balances are comparable, but the interest rates are not. The slightly larger one is 28%, while the smaller one is 9%. It makes perfect sense to reverse debts number 2 and 3.

In other words, organize your debt repayment strategy so that the higher interest rate is paid off first. You’ll save money, and it won’t have much of an impact on your momentum.

Stair Stepper Strategy

This is a variation on the debt snowball that incorporates the mathematical elements of the debt avalanche.

You must arrange your debts in the same order as you would for the debt snowball method. After you are done with that, divide your debts into several categories. For example, If you have nine debts, make three groups, that can be named as the low balance group, the medium balance group, and the high balance group.

Pay off the debts from highest interest to lowest interest within those groups.

So, you’d still start with the small debts, but you’d start with the highest-interest debt in the small debt group. This way, you keep the momentum of paying off small debts first, but you also save money by paying each group down from highest interest to lowest interest.

User Defined Method

The following method is known as the debt payoff method, and it is essentially the free-for-all method. It is entirely up to the debt holder’s discretion.

This method can be used when you owe a family member a personal debt that has been eating you up on the inside. Put this item at the top of the list. Then there’s the debt holder who irritates you and whom you’d rather pay off last. Then put it at the bottom of the list.

We don’t support this method because it’s ineffective, but we understand it and see how it can be helpful to some. Sometimes we need to put things in the order of our emotions rather than momentum or math. Do what you have to do.

Debt Snowball Vs Avalanche

Now that we have seen various methods to create our debt reduction plan, let’s proceed with the article by going back to the basic debt snowball method.

The reason this method has proven to be the most effective out of all the others is that people are motivated by the debt snowball method. They see immediate results in this type of debt payoff spreadsheet and are motivated to keep going and possibly do even more.

There is one method we should have mentioned earlier and it is known as the debt avalanche method.

The debt avalanche method involves organizing your debts from the highest to lowest interest rate and paying them off in that order. Which means it is the opposite of how the snowball method works.

All of the Spock-like mathematicians out there prefer this method. Based on the math alone, the debt avalanche method always pays off faster than the debt snowball method.

And that brings us to the question, “which one is better, the snowball method and the debt avalanche?”

When we compare the two methods, and If everything else is equal, it is clear to us that the debt avalanche will pay off your debts faster than the debt snowball. It will, however, provide you with positive reinforcement more slowly.

The debt snowball will help you gain motivation and will help you stay on track. Meanwhile, the avalanche may overwhelm you from the first few steps. When deciding between the two, make an informed choice and do some research, as both of the methods work great in their own way.

If you want to see how both methods compare, you can use a debt avalanche vs snowball calculator to project your financial future.

Download the Templates

Here are two free templates for Snowball and Avalanche:

  1. Debt Snowball
  2. Avalanche

And here is a free Debt Snowball printable worksheet.

Step-by-Step Guide for Creating a Debt Snowball Spreadsheet

We now understand how the snowball method works and benefits us, and we have looked into various other ways we can reduce debt.

We can finally dive into how you can create your own debt payoff spreadsheet.

Setting up the structure of a debt snowball worksheet is simple, but getting all of the formulas correct so that your sheet calculates the correct amounts at precisely the right time is more difficult.

Here are the steps we used to create our templates so you can learn how to do it to:

1) In Google Sheets, create a new page with the following headers.

Sample headings for a debt snowball spreadsheet

In the screenshot above, I have used four accounts. You can add as many accounts as you need depending on your requirements.

2) On the left side, add the following items:

Costs heading for a debt snowball spreadsheet

3) Start filling in the fields with the relevant information.

Example data in the debt snowball spreadsheet

NOTE: To calculate the amount of the monthly payments, use the =SUM function below the “Total Monthly Payments” header and sum up the minimum payments for each account.

4) Create a new section. On the left side, add a month and date header, and under each account, add a payment and balance header.

Adding payment and balance headings

5) Start adding values to the new section. For the first payment, add the One time Startup Payment and the extra amount both to the minimum monthly payment and deduct it from the starting balance.

Example data for payment and balances

6) After you’ve cleared the first account’s payments, start adding the extra amount per month to the minimum payment for the next account.

Paid off balances carried forward

In the screenshot above, once we cleared the total balance for the home financing account, I added the extra 400 to the minimum payment for the credit card account.

As a result, the payments which were previously 250 have turned into 650. Follow this approach for all other accounts as well, as soon as you clear an account, start adding the extra monthly payment to the following account’s payments.

Additional Resources to Use

When paying off debts, it is important to see how your finances are affected. By using a tool as simple as Google Sheets, you can stay organized in how you handle your finances and ensure a smooth cash flow.

The last thing you want when paying off debts is to bundle up more debt due to mismanagement. Below are some of the Google Sheets templates you can use to monitor your financial status vigilantly:


The easiest way to use a debt tracking spreadsheet, is to download one of our templates and make changes in there. It might seem complicated at first, but just like the budget spreadsheet and various other forms of financial management, this method can be effective when used correctly and with discipline.

Using a snowball method spreadsheet is an effective debt-reduction technique. It could be a good option if you enjoy positive reinforcement in small victories and don’t have a lot of high-interest debt.

However, a debt snowball spreadsheet template may or may not work for you as the snowball method is not necessarily applicable in every scenario. Accelerating payments on certain debts may not make sense in some cases.

Whatever strategy you choose, it’s critical to find one you believe you’ll be able to stick with until all of your debts are paid off. The avalanche, for example, will not save you money if you are forced to stop halfway. So choose wisely!


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Talha Faisal

Talha Faisal

Talha is a seasoned technical writer that specializes in Automation and SaaS. Google Sheets is central to his work, and he uses his writing to make Google Sheets easy to use for everyone.