Here is a screenshot of our Custom Debt Reduction Calculator:

Part 1: Using the Debt Reduction Calculator

This is how the spreadsheet works:

1. Enter shortened or abbreviated names for your the credit card or lending institution, the current balances, and the interest rate information for all of your current debts (including home equity lines of credit or second mortgages, etc).

2. Enter the minimum payment you will make each month for each debt. You may need to check with your bank or lending institution to determine what your current minimum payments are. Keep in mind that your minimum payment may change if your interest rates are variable.

3. Choose the maximum monthly payment that you can pay each month towards your debts, based on your home budget. The difference between the total minimum payments and your total monthly payment is your initial snowball. This initial snowball, or "extra payment", will be applied to the first debt, depending on your chosen strategy. When your first debt is completely paid, the remainder of your snowball is then applied to the NEXT debt, and so on, until all the debts are paid.

Part 2: Debt Reduction Strategies and the 'Snow Ball' Effect