I am willing to bet that I can’t be the only one sick of debt. For years I have made monthly debt payments (credit card, travel trailer, vehicle, hot tub) without really thinking about it. I have never had a hard time making the payments, just started wishing I could save more or do more.
I realized if we didn’t have this payment and that payment we could save a lot more or spend more on experiences (like Hawaii…mmm Hawaii).
I also realized that the out of sight out of mind approach to payments isn’t working for us. I wanted to see in one place what our total payments, total interest and total debt was.
Having this personal debt information in your face makes you more aware, more likely to pay it off quicker, and see best how this can be done.
I created the following free downloadable printable:
When I started, I actually went 3 months back so I could get a better idea what I was spending a month on debt. Especially the credit cards since those payments aren’t a set amount each month. Print several of these off at a time, I did 6 months’ worth.
For our car and trailer loans I created an amortization schedule. Your lender may be willing to provide one for you.
If not, give this one a try – https://financial-calculators.com/amortization-schedule
To create the amortization schedule, dig out your purchase documents. You will need to find the total to be financed (not the total including financing, as this already includes total interest that will be paid if the loan lasts the full term), the interest rate, payment start date, payment amount and number of payments.
The default payment frequency is monthly, if you loan is set up bi-weekly or weekly, go ahead and change that. I left the other fields as is.
This will give you a very close estimate, but remember to always check with the lender for the payout amount should you be in a position to pay off your loan early as their calculations can be slightly different. Use this only as a guideline.
Your schedule will look similar to this:
I printed out an amortization schedule for each of our loans and put them in a binder separated by dividers. This is the same binder where I put my Purchases/Spending Tracking Sheets.
The amortization schedule makes it easy to fill in your monthly amounts onto the free printable you downloaded and allows you to see at a glance how much of your payments are going to interest. In my case I let out a little gasp when it was all added up.
The amounts you need to fill in are taken right from your monthly statements. Credit card statements often include transactions for parts of 2 months. For example, my credit card statement is dated March 14 and includes transactions for the last half of February and first half of March. I considered the March statement to be March regardless of the transaction dates.
For me, it was just too time consuming to record the Feb credit card transactions in Feb and the March in March. I wanted my statements to agree to my monthly sheets. Just my preference.
Every time a credit card or line of credit statement comes in, grab your binder, and quickly fill in the total interest charged than month, payments made, total new charges and balance. Doing this monthly keeps it in your face.
The debt tracking sheet can be downloaded for free here.
Having all the totals in front of you allows you to visualize your debt situation and hopefully come up with a plan. Maybe it will help you think twice before adding to your debt.
What that plan is will vary depending on your situation. Some examples are:
- The snowball method, which was popularized by David Ramsey, is where you focus on paying off your smallest balance first. You make minimum payments on all other debts and as much as you can on the smallest balance until that is paid off. And so on. This method allows you to feel success as you go.
- Pay off the highest interest rate bill first. In this case you pay the minimum on all other bills and as much as you can on the bill with the highest interest rate until it is paid in full.
- Consolidate. If you have high consumer debt at higher interest rates you may want to consider consolidating. The worry here is that you don’t want to combine you debt payments into one loan only to rack up your credit cards again.
- Keep plugging away. At the very least if you don’t adopt a payment plan you will at least be mindful of how much interest you are paying and how much of your disposable income is going to debt repayment each month. Keeping track of your monthly debt will likely help keep you from adding to your debt.
Hopefully after a few months, seeing your debt decreasing will keep you motivated to pay it down faster and help you resist adding to it.
*This post contains affiliate links. There is no additional cost to you. Should you make a purchase from one of my affiliate links I will earn a small commission to offset the website cost. Thanks for clicking.