A debt snowball worksheet is a worksheet to facilitate paying off debts in order from smallest to largest. This concept was created by Dave Ramsey, a popular financial writer and radio personality, according to his website. On the debt snowball worksheet, the payer lists debts from smallest dollar amount to largest. After the smallest debt is paid off, the payment for that debt is applied to the next smallest, until all debts are paid.Continue Reading
The debt snowball idea is intended to provide the payer with the psychological victory of seeing progress as he pays off his small debts, says Dave Ramsey. He goes on to elaborate that by listing the debts smallest to largest, it is easier to achieve these milestones, rather than starting with larger amounts or higher interest debt. The payer pays the maximum extra that they can afford on the debt being "snowballed" and makes minimum payments on all others. Once the first debt is entirely paid off, the "snowball" is applied to the next smallest debt, until all debts are paid.
Dave Ramsey provides a worksheet to facilitate this method on his website, DaveRamsey.com. Additionally, an Excel spreadsheet to facilitate the method is available at Vertex42.com.Learn more about Debt Law