Getting out of debt with the Debt Reduction Spreadsheet 2023 (2024)

Debt is not your friend, and you should not be friendly with your debt. It’s time to end the relationship with your debt by getting debt-free. Tiny steps today reduce big interest charges tomorrow.

So let’s do something about it! To get started on this getting out of debt journey you’ll need two things. First, you need to be brave and find your sense of debt-hating desire. To get out of debt you must want to do it, badly. Don’t hide from it. Don’t feel stuck. Get into action.

Second, you’ll need bills and statements from creditors. If you’ve already listed the numbers and names in your Budget Spreadsheet (which shows your income, expenses, and what your owe) — then pull up those files. If not — no worries. We’ll get the stuff together today. Kudos.

Getting out of debt!

I have TWO free debt reduction spreadsheets, and both are easy to use. There’s the new one for 2023 with graphs, and there’s the original version. Both debt reduction spreadsheets calculate your numbers and give you the big picture — but a spreadsheet doesn’t do the work for you. You do the work for you.

Regardless of which version you choose, I’ve kept things super simple by listing the biggest debt-busting categories and showing you how it all adds up.

The idea is to track your creditors, list the balances due, see the interest rates on your debt, make your monthly payments, and then target one debt using an amount you have available for extra payments.

How to get Debt-Free with the Debt Reduction Spreadsheet

Step 1: Get the tools.

Download your preferred Free Debt Reduction Spreadsheet. All the data is stored on your end, so it’s private.

Step 2: List it out, add it up!

Take a close look at your debts. Start by listing your creditors or lenders in the left column. Then move down and across.

1. Lenders: List your credit cards, student loans, HELOCs, lines of credit, and the IOU from grandma.
2. Balances Due: Enter the balances due, the total amount owed to each lender.
3. Interest Rates: The interest rate on the debt. If you’ve got credit card debt then you may have rates over 18%. Track it all down.
4. Minimum Payments: Keep up with your minimum payments to maintain a good credit score. But to reduce debt you’ll need to increase the minimum amount to dig into the principal and pay it off faster.

With everything entered, how do your numbers add up?

Step 3: Finding more money.

For those with little wiggle room in your budget for debt repayment, there are a few options. The answer is simple, but not easy.

1. Cut costs: Cutting back and spending less money on your variable expenses is a surefire way to add additional dollars to your debt repayment plan. Cut repeatable expenses, subscriptions, streaming, automatic billings you forgot about. Reduce your grocery bill (buy generics, switch to discount grocers, cook at home, eat out less). See 50 Ways to Save $1,000 a Year for a few more ideas.
2. Boost income: This is where you have to really want to get out of debt. Working an extra shift, freelancing, finding an off-hours gig, selling unneeded items are all tactics I have taken to boost income.
3. Negotiate a lower credit card interest rate: Asking for a lower rate is free. And since most credit cards charge anywhere from 0% to 20% in interest, making a five-minute phone call could save you hundreds, even thousands in interest charges. See How to negotiate a lower credit card interest rate for the script.

In the next step I’ll deal with how to apply this extra repayment against your debt.

Step 4: Make extra payments against ONE of your debts.

Yes, you must pay more than the minimum payment on your credit cards to get out of debt. How do you choose what to pay down first? You can attack the balances in one of two ways:

Step 5: Pick a debt-free date.

Your debt-free date is the projected day you plan to pay off all your debt. Your debt-free day is projected because life comes at you fast and who knows what your income, housing, and life’s needs will look like in two to three years. Look at how much money you owe, and roughly divide your payments into months. Don’t take more than three years to pay it off, ok? You’ll feel frustrated, so aim for under three years. Write this date on your calendar. Shoot for sooner.

Step 6: Stick with it!

Whether you pick to pay off your smallest balance to start or choose to end the debt with the highest interest rate first, the point is to stick with it! Once you’ve retired one debt, move that payment to your next creditor on your Debt Reduction Spreadsheet.

And don’t forget: How to set money goals that slay and get my free budget spreadsheet.

You don’t have to track all your money, just the cash you want to keep!

Love love love,
Kerry

16 Comments

1. 

   The Passive Income EarnerAugust 16, 2010 at 10:39 am

   Great tool for taking control of your finance!

   I would add Step 9. Evaluate different scenarios and shop for different rates when you can while understanding all the penalties you would have by switching the loan. There are 2 ways to accelerate debt: more payments & lower interest rates.

   See Also

   How to Get the Benefits of a Free Financial Advisor - SmartAsset

2. 

   Doctor StockAugust 16, 2010 at 9:43 pm

   This is excellent… wonderful material. I’m not indebted, but I definitely will point people in this direction who are struggling. Thanks!

3. 5 for Friday – The Anal One Edition | JennerosityAugust 20, 2010 at 8:59 am

   […] finally, Squawkfox posted another article in her “How to Make a Budget” series called: dig yourself out with the debt reduction spreadsheet. Now, I’m not in debt, and BenevoLance and I have a very good grasp of our finances, but I […]

4. 

   Debt HelperAugust 23, 2010 at 5:44 pm

   When dealing with spening you should consider needs over wants. Prioritizing your debts and paying the highest interest rate off first is a good start.

5. 

   james@creditcardresearcher.com.auSeptember 27, 2010 at 3:29 am

   Sounds good. A lot of sheets for help.
   I reduced my debts by differentiating between needs and wants.
   Started with paying off first on the high interest debts specifically credit cards.

6. 

   Erin DJune 11, 2011 at 7:47 am

   This is exactly what I needed, great, thanks!

7. 

   Merlin SJanuary 21, 2013 at 2:22 pm

   Hi Kerry,

   From a financial planner’s standpoint we like to refer your site to people who we think could benefit from it. If we could somehow convince every person to do something as simple as putting some money away for a rainy day, we would have accomplished a great thing!

8. 

   CeriSeptember 20, 2017 at 11:30 am

   This is great. But can you advise on any apps that you can use for debt reduction? I was just hoping to keep track via my phone too. Thanks

9. 

   jobeeJanuary 17, 2018 at 9:04 am

   is there a way to have it calculate bi-weekly payments?

10. 

    MoneyplantresearchNovember 12, 2018 at 8:03 am

    Thanks for the great information Kerry. Much appreciated!!

11. 

    BonneyJuly 18, 2019 at 1:12 pm

    Sounds great, but what can be done with a fixed income? A miracle!!??

12. 

    ChloeDecember 7, 2019 at 6:52 am

    Great tool! I have a clearer way to sort my finances. It does not look as bad as I originally thought! Now on to becoming debt-free!

13. 6 Personal Finance Spreadsheets for Your 20s | The Unconventional TravelerMarch 19, 2020 at 11:41 am

    […] This spreadsheet by Squakfox will help you determine how much to pay off each month for each loan you have. […]

14. 

    DanielleOctober 25, 2020 at 2:16 pm

    Hi! By any chance do you have a version of this that is compatible with Mac Numbers?

15. 

    Diane taberJanuary 2, 2021 at 5:40 am

    Hi we’re just both just starting budgeting and trying to get out of debt and then build wealth.

16. 

    CorissaJanuary 8, 2021 at 5:41 pm

    I am interested in how I can incorporate your wonderful spreadsheet into Numbers instead of Excel. Any chance of getting this created in Numbers? Greatly appreciate your guidance as debt needs to be tackled especially with the year that is ahead of us. Thank you!