Free Debt Tracker Printable - Debt Free Worksheet
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Taking the first step to control your finances is managing your debt with this debt payoff planner printable.
If you listen to successful investors such as Warren Buffett, they will tell you the best investment you can make is paying off your debt. From high interest credit cards to auto loans and long term student loan debt, debt will hold you back
Today we're going to show you a few tips and tricks to pay off your debt quickly and efficiently plus give you a debt tracker PDF that will help you along the way.
Why should I use a debt payoff worksheet?
Debt typically has a negative image associated with it and while there is such thing as good debt, the consumer debt most people carry is not good.
Not only is it bad, most people typically have a hard time paying it down, especially in a timely manor.
The problem is that it can be hard to pay off debt if you don't do it systematically. That is why a debt payoff worksheet is so important. It allows you to organize all of your debts and figure out a system to pay it off quickly.
Increased clarity: A debt payoff worksheet provides a clear overview of a person's debt situation and helps them understand how much they owe and to whom.
Better organization: The worksheet helps a person organize their debts and keep track of payments and balances in one place.
Improved motivation: Seeing progress towards paying off debt can be a motivator for a person to continue making payments and stick to their debt repayment plan.
Increased savings: By creating a plan to pay off debt, a person can potentially save money on interest payments and pay off debt more quickly.
Better financial decision-making: A debt payoff worksheet can help a person make informed decisions about how to allocate their money and prioritize debt repayment.
Increased peace of mind: By paying off debt, a person can reduce financial stress and improve their overall financial well-being.
The danger of debt
Debt, depending on the kind such as credit card debt, can have extremely high interest rates. Some debts can have interest rates over 30%!
If you want to retire some day or enjoy life, you can't carry this kind of debt. Even if you have retirement savings and investments, debt with 20-30% interest rates will kill the returns your investments make.
The first step to money management and creating better personal finances is to get rid of your debt.
Proven Debt Payoff Methods
When it comes to paying off your debt, there are typically 2 methods that people who successfully. We'll go over them both and then you can decide which debt payoff strategy is best for you.
Debt avalanche method
The avalanche debt payoff method is a strategy for paying off debt where a person focuses on paying off their debt with the highest interest rate first, while still making minimum payments on their other debts. This method aims to minimize the amount of interest a person pays over time and reduce the overall amount of debt.
The avalanche debt payoff method is better to use when:
High-interest debt: If a person has debt with high interest rates, such as credit card debt, using the avalanche method can save them money on interest over time.
Long-term debt repayment: If a person is looking to pay off debt over a longer period of time, the avalanche method can help them minimize the amount of interest they pay and reduce the overall amount of debt.
Financial discipline: The avalanche method requires discipline and commitment to paying off debt, as it may take longer to pay off the debt with the highest interest rate first.
Low-interest debt: If a person has low-interest debt, such as a mortgage or student loans, the avalanche method may not result in significant savings on interest and may not be the best option.
Overall, the debt avalanche method can be a useful tool for a person looking to get control of their debt and minimize the amount of interest they pay over time.
Debt snowball strategy
The debt snowball method is a strategy for paying off debt where a person focuses on paying off their smallest debt first, while still making minimum payments on their other debts.
Once the smallest debt is paid off, they move on to paying off the next smallest debt, and so on.
This method aims to provide a sense of progress and motivation for the person to continue paying off their debts.
The snowball method is better to use when:
Building momentum: If a person is looking to build momentum in paying off their debts, the snowball method can provide a sense of accomplishment as they pay off smaller debts, leading to greater motivation to continue paying off debt.
Improving credit score: Paying off debt can have a positive impact on a person's credit score, and paying off smaller debts first can lead to quicker improvements in credit score.
Low-interest debt: If a person has low-interest debt, such as student loans or a mortgage, the snowball method may not result in significant savings on interest, but can still provide a sense of progress in paying off debt.
Short-term debt repayment: If a person is looking to pay off debt over a shorter period of time, the snowball method can provide a quicker sense of progress, as smaller debts are paid off more quickly.
Overall, the snowball method can be a useful tool for a person looking to get control of their debt and build momentum to pay it off, while still making minimum payments on other debts.
Picking the method for you
Both methods can work to pay off your debts. Picking which method is right for you will vary from person to person.
The avalanche method will save you money in interest since you are focusing on the highest interest rate debt first.
The snowball method is great in the sense that it gives you small wins quicker that can help you stay motivated.
How to use our debt payoff tracker
Our debt worksheet is extremely simple and easy to use. In just a few quick steps you can have all of your debts organized and a plan formulated to pay them off quickly.
Write down ALL of your debts. To make things easier, put them in order from lowest balance or highest interest rate.
Write the payoff order for all of the debts based on which method you are using, either by highest interest rate or lowest balance.
Make the minimum payment on each debt and then make an extra payment on the debt you're currently focused on.
Now you have a system to pay off your debt and track your progress. As you pay off each debt, apply the payment amount from that to the next one of priority.
Using our debt payoff tracker, you'll be debt free faster than you ever imagined.
Grab our free debt tracker printable to stay on track with your budget
Our debt tracker worksheet is a great way to get control of your debt. Getting your debt paid off completely should be your first priority and the most important step to improving your personal finances.
It's free to download and will help you on your debt free journey. Grab yours now.