The debt snowball is a popular personal finance approach. The idea came out of Dave Ramsey’s The Total Money Makeover. Before Ramsey, most personal finance experts recommended that, if you were working on getting out of debt, you paid only the minimum payment on most of your debts, while throwing every other cent you could at the debt with the highest interest rate. Instead, Ramsey suggested that you should concentrate on the debt you owe the least on first. The idea is that you’ll pay off your debts faster and have some psychological satisfaction by seeing how much progress you’re making.

Vertex42 is a site devoted to Microsoft Excel templates. One of the free templates available on the site is a debt reduction calculator. Unlike most debt calculators, Vertex42’s allows you to choose different strategies, including the debt snowball, and see how they affect your payment plans.

The calculator is extremely easy to use: it’s just an Excel spreadsheet that you download, open up and start listing your information in. There are actually two worksheets in the file — one is the calculator, while the other is a payment schedule that you can print off and use to track how you are progressing with eliminating your debt.

Personally, I’m a fan of the debt snowball method. While it may make more financial sense to attack debt with high interest rates first, that approach can take a while to see significant progress. With a debt snowball, you’ll see results relatively quickly. I don’t know about you, but just being able to see that I’m making headway makes it easier for me to stick with an effort to eliminate debt. If I feel like I’m just running my head up against a brick wall, I get pretty tempted to give up.

If you’re going about a debt snowball correctly, there are some obvious benefits, even if you don’t eliminate high interest debt immediately. First of all, you can quickly narrow down the number of places you’re sending a monthly payment. That doesn’t just mean that you save on postage and convenience fees. It means that there is one less bill you have to worry about — one less payment that could arrive late.

Some people on the debt snowball plan have even wound up paying off their debts faster than they would have with a more traditional payment plan. Seeing debts disappear can inspire you to find the money for an extra payment just to get that great feeling again.

Lastly, with all the options for zero interest transfers and other ways to rearrange debt in order to get lower interest rates, paying off high-interest debts first can be put off a little longer with fewer worries. If you’re particularly worried about the interest you might add to your debts if you use the debt snowball plan, you might consider looking for ways to lower interest rates.

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