Since you wanted to get rid of your financial woes but you can’t somehow pay your debts the way you should, you have opted to go through a debt management plan. That’s a very wise move since a debt management plan (DMP) can help you pay your debts conveniently and according to your budget. You just need to find a debt advisor offering DMPs and he will be the one to negotiate with your creditors on how you are going to pay your debts. But, of course, before going into DMP, you should find out for yourself if DMP can really help you or not. Mind you, there are also some disadvantages aside from advantages in enrolling in DMP. One of the best ways to find out if DMP is for you to know your financial status and you should learn how to use a debt management plan calculator. If you can’t find it, you can even make one using MS Excel.
Here are the steps in making a DMP calculator using MS Excel:
- Open a new worksheet on MS-Excel. On Cell A1, type in “Balance” and on Cell B1, type “Payments”.
- On Cell C1, type in “Interest Rate” and on D1, type in “Remaining Balance”.
- Try putting in some numbers. Try to type in “5000” for $5,000 under “Balance”. Under Payment, type in “100” which stands for $100 a month as payment, type in “.18” for 18 percent under Interest Rate.
- Now, under “Remaining Balance”, you should type in an equation. For this example, the equation should look like this:
Now, this means to say that when you pay $100, you only have taken off $25.
You should take note that the Cells on your equation are not to be type but, rather, to be anchored. That way, no matter how you change the data on the cells, the equation and the result should stay the same.
5. On the next row, your Remaining Balance should reflect on it. In this case, if the 1st balance is on A2, then, the next one should be on A3 by typing in this equation:
6. Below “Payment” on the next row, instead of typing “100”, make this equation:
And this is also true with the next row under “Interest Rate” and copy Cell D2 to Cell D3
7. Now that you have the equations in place, all you need to do is to drag Cells A3 to D3 all the way down. All of the numbers will be carried over down the worksheet. Drag down until you get a negative number as Balance or “0”. This way, you can tell your remaining balance.
8. If you get the sum of all $100 that you have paid, you will see how much you have paid totally against the first balance. In this example, you should be able to sum up all $100 to around $9,000 minus your balance of $5,000. That means, you have paid an interest of, at least, $4000.
It’s really easy to find a debt management plan calculator. If you can’t, you now have an idea on how to make one.