Debt Elimination Update

So I’ve already updated the Debt Elimination Calculator (and yes, I do realize it has only been a couple hours). The new version is version 2.2.1 and can be downloaded here or from the original post (the links in each point to the same file).

Features added for version 2.2.1:

  • The spreadsheet now calculates the information (time required to pay off, interest paid, etc.) when paying at the minimum payments only, for comparison purposes. This functionality had been removed in version 2.0.0.
  • The minimum payment calculators are more robust to inadequate minimum payments.
  • Some slight formatting modifications have been made.
  • Added functionality for sending feedback/asking questions via email.

Also, another interesting note on debt elimination. I was just told by a friend that you can make payments in advance. Let me explain. If your minimum payment is $50 and you pay $100, you have made a bigger dent in you balance, but the minimum payment of $50 still comes due next month. Alternatively, you can make two payments of $50: one labeled for this month and one for next month. Then you have still paid $100 dollars and have the same benefits of less interest accruing, but the next payment to come due is in two months instead of one.

When using debt elimination you usually are paying more than the minimum payment. If you use this method each month you have the added advantage of an ever increasing buffer between you and when your next payment is due. There is more bookkeeping required on your end, but you have an extra margin of safety in case something happens. (Though, if you stop paying because you aren’t required to then you not only lose the advantage of the buffer, but also lose ground on your debt elimination. So if you’re going to do this you have to be very disciplined.)

Special thanks to Dave for this insight.