Hello, Dinks. Debt is something that many people struggle with. I struggled with mine for years until I started making payments on it. Getting out of debt doesn’t have to be as daunting as you might have thought. A debt reduction spreadsheet can help you keep track if income and expenses. Choosing a good spreadsheet can be pretty easy since there are many sources where you can download a free spreadsheet online.
Helps you keep track
One advantage of using a spreadsheet is that it’s very to lose track of your purchases. You might think you’re doing well with your budget, but in reality, you are spending a few dollars here and there. Before you know it, you’ve thrown away a lot of extra money every month. Who wants to do that? I know I don’t want to. If you write down all of your expenses and keep track of it, it’s much harder to waste money. When you can see your debt and expenses in black and white, most people tend to hold themselves more accountable.
It can keep you motivated
Another benefit of using a debt reduction spreadsheet is that it can really help you stay motivated and on track when you actually see your progress. It’s a good feeling when I can see my figures getting smaller each month. It is a very empowering feeling. Besides being motivating, it will give you the strength to resist temptation and stay on track when you have physical proof that you are moving ahead.
Keep the spreadsheet up to date
This next tip is critical. You must remember to keep your spreadsheet up to date. No matter how good a spreadsheet is, it won’t do any good if you don’t keep all the entries up to date. Anytime there is a change in your circumstances such as a change in the interest rate of a certain loan, or the minimum payment requirement. You’ll have to update your spreadsheet so that your new payoff date will be accurate. If you have some unexpected change in your monthly living expenses, you have to update your spreadsheet. Remember, the information you get from your spreadsheet will only be as accurate as the info you plug into it. You may not want always to do it, but you should review information a couple of times a month. By doing that, the info will be up to date.
Find a spreadsheet for you
Different types of spreadsheets will help you focus your efforts, one of the most common types of spreadsheets is the one that has you pay off one debt first, and then you take that amount of money and apply it to the next debt. This is called the snowball effect. It’s a cumulative effect and as long as you are making at least minimum payments on every debt and only using the extra money that you’ve free up by paying something off to pay off more debt.
Spreadsheets can become your best friend when paying off debt. It really doesn’t matter what type of spreadsheet that you use. As long as it works and can help you lower your debt, it should be fine.