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How to use Tiller to get out of Debt
How to use Tiller to get out of Debt

Learn about the Debt Payoff Planner and how to use it to get out of debt.

Heather Phillips avatar
Written by Heather Phillips
Updated over a week ago

The Debt Payoff Planner from Tiller will help you understand what it will take to conquer your debt. Use it to track your debt payoff with the snowball, avalanche, or a custom ranking method. It’s compatible with the Foundation Template if you want to use it alongside your budget or install it in your own custom sheet using Tiller Money Feeds.

How to get started

  1. Install the Debt Payoff Planner using the Templates feature in Tiller Money Feeds into your Tiller-powered workbook.

    1. Google Sheets: Click the “Templates” option in the main sidebar and then click “Install” ⚠️ this process may take up to 2 minutes in Google Sheets

    2. Microsoft Excel: Click Tools at the top of the Tiller Money Feeds sidebar then Manage Templates then click Install

  2. Set the Start Month at the top. This should be the current month or a month in the past. This will determine what starting balance to use. See notes about the start month below for more information.

  3. Choose a Payoff Method. Read more about the different Payoff Methods below.

  4. Select accounts from the dropdown list in the Account column starting on row 16.

  5. Enter the interest rate for each account. You can usually find this on your monthly account statement.

  6. Enter the minimum monthly payment for each account. You can usually find this on your monthly account statement.

  7. Click on the check box in column A to activate the account so the data is included in the table and chart.

  8. Optionally, if you’re using the Ranked Payoff Method, assign a rank to your debts to specify the order in which you want to pay them off. The Rank column will only turn green (indicating it’s editable) if you’ve chosen the Ranked Payoff Method.

  9. Enter your Monthly Payoff Goal (just below the Payoff Method selection near the top). This is the amount of money you can put toward paying off your debt each month. Configure this last because it needs to be at least the sum of the minimum monthly payments for all debts that are set as active (have a check mark) and until those are configured you don't have a real sense for what this value should be. Read more below about how to choose a Debt Payoff Goal that’s right for you.

Once you’ve set the template up you should see your Projected Debt Payoff Date, Recommended Payment amount for each debt, and other insights about your debt as well as a pay down chart visualizing the timeline for paying off each of your debts from today. You can use the check boxes to enable or disable accounts if you want to model different debt reduction scenarios.

Try out different Payoff Methods and Monthly Payoff Goal amounts to see how that affects your debt payoff journey and projected Debt Payoff Date.

Payoff Methods

Snowball method

This method prioritizes the lowest balance debt first. Any extra money you’re putting toward your debt payoff will be added to the “Recommended payment” for the debt with the lowest balance. All other debts will have a recommended payment of at least their minimum monthly payment or more if there is extra debt payoff money available to prioritize toward the next lowest balance.

Avalanche method

This method prioritizes the highest interest rate debt first. Any extra money you’re putting toward your debt payoff will be added to the “Recommended payment” for the debt with the highest interest rate. All other debts will have a recommended payment of at least their minimum monthly payment or more if there is extra debt payoff money available to prioritize toward the next highest interest rate debt.

Ranked method

This method prioritizes the payoff based on your own custom ranking set in the Rank column prioritized by lowest number to highest number in the Rank column (e.g. enter 1 for the debt you want to pay off first). Any extra money you’re putting toward your debt payoff will be added to the “Recommended payment” for the debt with the lowest rank number. All other debts will have a recommended payment of at least their minimum monthly payment or more if there is extra debt payoff money available to prioritize toward the next lowest ranked debt.

Start Month & Starting Balance

The Start Month is the month you want to start tracking your debt payoff. It is used to calculate the “Starting Balance” of a debt account. The oldest balance available in the month set as the Start Month will be used for the Starting Balance for each account. If no balance exists in that specific month the oldest balance after that month will be used. The start month should be the current or a past month. Future months are not supported for the start month. If you’re brand new to Tiller you should use the current month for the Start Month because you won’t have any balance history for previous months.

Estimated Interest

The estimated interest amounts on the spreadsheet are based on the current balances of the liability accounts. Over the payoff period the est. total interest and current monthly interest will steadily decrease as you pay off your loans and the balance decreases.

Minimum Monthly Payments and Interest Rates

Tiller’s bank feeds are not able to pull in the minimum monthly payment amount or interest rates automatically from your institution at this time. If your minimum monthly payment amount or interest rate changes you need to update it in the Accounts config table in the Debt Payoff Planner. You can usually find these on your monthly statement. Be sure to periodically review your monthly statement available from your bank directly to make sure these haven’t changed to keep your debt payoff details accurate.

Monthly Payoff Goal

If you’re not sure what the Monthly Payoff Goal should be, a simple method is to subtract your expected monthly obligatory expenses, excluding your minimum monthly payments for debt, from your expected monthly income.

Example:

Total expected monthly income: $4000

Total expected obligatory expenses (does not include min monthly payments): $3000

Remainder: $1000

Review the remainder and make sure it covers the total minimum monthly payments for all debts you’re tracking on the Debt Payoff Planner. You can quickly find the total by reviewing the note under the Monthly Payoff Goal cell.

If it at least covers those minimum monthly payments, start there for the goal. If it’s more than the minimum you can decide how much extra you want to put toward the goal. Remember, the more you put toward your debt payoff the faster you’ll pay it off and the less interest you’ll end up paying.

If the remainder is not covering the minimum monthly payments, figure out where to cut expenses to ensure you’re covering your minimum payments or consider getting a second source of income to help cover your expenses and debt repayment. Start with a number that you know you can reach and then over time increase the Monthly Payoff Goal to continue making faster progress.

If you’re not sure what your expected monthly obligatory expenses or expected income are, we recommend that you use the budgeting features in the Tiller Foundation Template to calculate your planned cash flow. Learn more here about setting up the Foundation Template for budgeting.

Obligatory expenses are things like your rent/mortgage, utilities, and food. Many of the purchases we make may feel like a necessity, but when faced with the reality of debt we learn that they’re really just nice to haves that we can live without for a while to improve our overall financial situation. We may also reflect that it's some of those spending habits that got us into this debt situation in the first place.

Debt related transactions & budgeting

Setting up Categories

While you’re not required to set up a budget to use the Debt Payoff planner, the Foundation Template’s Monthly Budget can be a helpful tool for keeping track of your debt payments.

Create an Expense type category called “Debt Payment” on the Categories sheet and set the budget target on the Categories sheet for that category to the same amount you set as the Monthly Payoff Goal on the Debt Payoff sheet.

This way the expected expense associated with your debt payments will be factored into your budget to make sure you’re holding that money for your debt payoff and still meeting your other obligations.

Add a category called “Debt Transfer” on the Categories sheet and set it as a Transfer type. It doesn’t need a budget.

You can put both of these in a Debt Payoff group on the Categories sheet.

Categorizing Transactions

Categorize transactions flowing out of your checking or savings account for payments (negative amounts) as “Debt Payment.”

Categorize transactions flowing into your debt accounts for those payments (positive amount) as “Debt Transfer.” You may see more than one transaction associated with the payment flowing into the debt account depending on how your financial institution records the payment against principal and interest. In any case you should categorize both transactions as “Debt Transfer.”

Staying Motivated

Regardless of your situation, remember that there is nothing to be ashamed of here. Credit when used responsibly can be a very powerful tool that enables us more financial choices in the future. Without using credit no banks will lend us money to buy a house or a car.

If you want more inspiration about how to stay motivated during your debt payoff journey, check out these blog posts.

Troubleshooting

Check out the troubleshooting tips below. If none of these help, reach out to our support team during our office hours (M - F, 8AM ET - 6PM ET) using the chat tool in the lower right corner of this page.

Google Sheets

Error during install

If you're seeing an error similar to the one below when you're trying to install the template in Google Sheets it means that the process timed out. We recommend deleting the existing tab that was created and try again after closing all other browser tabs and sessions.

Microsoft Excel

#VALUE errors

If you're seeing #VALUE errors in some cells after installing the template it could be due to a bug in Excel. We recommend deleting the tab, completely exiting and restarting Excel and then trying again. Be sure that you have accounts linked to the spreadsheet and balance data filled in before installing the Debt Payoff Planner.

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