Debt Payoff Budget Worksheet

Debt Payoff Worksheet for ____________________

Free financial budget worksheet (3 of 3)

In our other 2 worksheets, you had the ability to monitor your spending, and set up a balanced monthly spending plan. Now that you've made some progress on managing your spending, it's time to begin to eliminate debt and take that next step on your path to personal financial fitness.

To begin, list all of your debt obligations on the worksheet below. The list should include any and all persons or businesses that you owe any money to; store accounts, credit card balances, auto loan, mortgage, student loans, etc.

Debt Obligations

As you begin to review the list above, compare it to your spending plan. Be certain that you have included the monthly payment amount for each of these debts. If you didn't, you'll want to make those adjustments so that you do not overspend your monthly income. If you are using Mvelopes Personal, the system will automatically set up repayment envelopes for each of your credit cards, and you should already have an envelope set up for each of your other obligations. Any adjustments that you need to make in Mvelopes should be very quick and easy.

Once you have updated your plan, you can look at how to quickly eliminate these debt obligations. In the chart below, prioritize the list from above in the order you would prefer to pay each of them off. This can be done by highest interest rate, or balance owing. We recomend listing them by interest rates. Place the highest interest rate at the top. Then list the others in descending order.

Debts Listed in Order of Payoff

In the chart above, you probably noticed the extra column titled 'roll-down amount'. So that you can quickly eliminate debt, you can enlist the debt roll-down concept. When you pay off your first debt, put the amount of that monthly payment toward your next debt on the list. For example, if you were paying $75 per month on your Visa card and that card now has a zero balance, add the $75 to the payment amount of your Car Loan, increasing the total from $200 to $275 every month. When your car is paid off, roll that total payment into your next debt on the list. By keeping your overall debt payment amount the same, even after you have paid off some of your debts, you can pay off all of your debts very quickly and save thousands of dollars in interest.

Accelerator payments are just one another method of increasing the rate of your debt reduction. An accelerator payment is simply an amount of money you take from one of your other spending categories and apply it to your debt payments. If you are using Mvelopes Personal, this is easily be done by sweeping any remaining balance from your spending accounts into your debt repayment envelopes. Applying this larger amount toward your remaining balance on each debt can cut off years of payments.

To see how the roll-down principle and accelerator payments work, visit our interactive debt calculator. The debt calculator will show you how much you will pay for your debts over time and how much the roll-down principle and an accelerator payment can save you.

This whole process of spending management can be done electronically, and in a fraction of the time it would take to do it manually. Visit www.mvelopes.com for your FREE 30-day debt payoff trial- no risk, no obligation.