How to Use the Debt Snowflake Method


You’ve probably heard about the Debt Avalanche” or the “Debt Snowball”, but might be less familiar with the Debt Snowflake method. However, if you’re currently slugging away at paying down a big balance, this is a repayment strategy you want to have in your arsenal to eliminate that debt because it will work in conjunction with whatever you’re already doing.

I know it’s already springtime and you’re probably as sick of snow as you are of your debt, but stick with me on this one because the Debt Snowflake method is worth knowing how to do.

What is the Debt Snowflake Method

The Debt Snowflake Method is using small, unexpected savings to incrementally pay off debt.

These “snowflakes” are tiny cash windfalls that may actually only be a few cents at a time. They’re so small we don’t see them as having any real potential on their own, but much like real-life snowflakes, once you get enough in one place, it can turn into a snowball. Think everything from spare change found between couch cushions to savings from clipping coupons at the grocery store to the $20 bill grandma still puts in your birthday card each year. It doesn’t matter where you find it, not matter how small the amount is, you keep it and use it towards your debt instead of pretending that it’s nothing!

You can use your Debt Snowflakes with the Debt Avalanche or the Debt Snowball

There’s plenty of debate on personal finance blogs everywhere whether the Debt Avalanche or the Debt Snowball is the superior method to tackle debt. I don’t actually care what method you choose. I think the best method to pay off your debt is whichever one gets your debt paid off.

Paying off debt is as much of a psychological undertaking as it is a financial one, and sometimes you need to do whatever keeps you motivated even if it costs you a few extra dollars on paper.

RELATED: The Debt Avalanche vs. The Debt Snowball

Where to find Snowflakes

Collecting snowflakes to eventually become a snowball in your debt payoff strategy is easier than you think. Here are some easy ways to start earning a few extra dollars every single day (yes, DAY) to put towards your debt.

  • Use a cash-back credit card for your purchases
  • Collect spare change in a piggy bank or jar
  • Use a cash-back rewards site, like Rakuten, to earn 1% to 8% on all your online shopping
  • Set up a micro-savings goal of $1 or $2 per day in your Koho account
  • Download Snap by Groupon and clip coupons when you grocery shop
  • Sign-up for Swagbucks and earn Swagbucks for surfing the web, watching video, and more, then redeem for cash via PayPal

One of the easiest ways to “snowflake” is to actually save the money you save when you buy something on sale or skip your latte. You know I will always support you 100% if you get a latte every day, but if there is one day you skip it because you want to make a small dent in your debt, go on and transfer that $5 onto your debt ASAP so you really save it — not just say that you did.

Don’t hesitate to use the Debt Snowflake Method

One thing that can sometimes hold people back from making extra payments on their debt is when those payments are too small. You might be thinking that’s ridiculous, but maybe you’ve never tried to make a $3.63 payment on your debt before. It might seem silly to e-transfer or bill pay a handful of change to an outstanding debt, but it’s totally worth doing.

If you don’t want to be making payments on the daily, make a point to do it at the end of every week. Nothing starts the weekend off on the right foot like a Friday e-transfer to your debt, amirite? Who cares if it’s only $4, no one will know except you and your creditor.

I still think one of the saddest things I’ve ever seen was one of my Facebook friends celebrating finally paying his student loans off… after 10 years. As in, he followed the repayment schedule and never made one single extra payment in a whole decade. Even an extra $10 per week probably would have gotten him out of debt 1-2 years sooner and saved him hundreds of dollars in interest. He needed snowflakes, but he chose the tundra desert instead.

Debt Free? Snowflake your savings

Surprise! All of the above works for saving money, too. If your debt is a distant memory (or never was in the first place — woohoo!) you can still use the snowflake method to save money.

Follow the same steps: collect small change from a variety of sources, and then put it towards a savings goal.

This is fundamentally how interest and dividends work — small payments that eventually add up to be enough to invest in more stocks, that pay more dividends, and so on. In other words, saving actually starts to make its own little snowstorm that will snowflake itself, and debt is really the only one you have to diligently stay on top of.

In any case, stay warm and stay rich by using the Snowflake Method to supercharge your debt repayment (or your savings!) year round.

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