Instead, keep a running tally of your savings for a specified period (like every two weeks), then pay the total amount at the end of the period. Also check with your lender to ensure that you won’t get dinged for making multiple payments in a specified period.
You’re trying to pay off a credit card with a ,000 balance that’s charging you 17% interest and requires a minimum monthly payment. Check out the difference you could make if you could accumulate 0 extra through the debt snowflake method:
At lunch, you and your coworker head to the deli to buy subs. By splitting one instead, you’ll add to your snowflake pile.
How Does the Debt Snowflake Method Work?
Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder. Read her bio and other work here, then catch her on Twitter @TiffanyWendeln.
- The avalanche method prioritizes paying off debts with the highest interest rates first. After the biggest balance is paid off, you move on to the next-highest interest debt, and so on. It’s the best way to save the most money on interest as you’re paying down your debt.
- For the snowball method, you pay off the smallest amount of debt first, then work your way up through paying off progressively larger debts. It’s great for people who are motivated by small wins as they watch individual debts disappear faster.
On your drive to work, you stop for a jumbo coffee that costs . If you downsize to a medium for , you save .
You’d save about 0 and shave 28 months of your debt payback timeline. Let it snow!
Consider the debt snowflake strategy for tackling debt. Unlike its better-known siblings, the snowflake method doesn’t involve a structured budgeting system for paying down your debt — think of it more like an easy way to throw a little extra money toward your debt.
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Consider this scenario:
Both options involve creating schedules for making payments and putting any money toward the targeted goal — that’s not the case with the debt snowflake method.
Contact your lender to request that your payments be applied toward your principal balance — it will help you save money on interest and pay off your loan faster.
At the end of the day, you’ve saved/made that you immediately pay toward your credit card balance.
Ways to Save Money: After work, your neighbor asks if you can babysit her toddler for a couple hours. You consider it a favor, but she insists on giving you for your trouble.
Does the Snowflake Method Actually Work?
We’re not trying to pull some snow job on you (like you didn’t think I’d go there) — collecting the money you save by splitting a sandwich is not your quick and easy way to pay off ,000 in credit card debt.
Ways to Make Money:
Here’s the thing about snowflakes: They melt fast. If you’re going to use the snowflake method, you need to move quickly before your micro payments disappear into the abyss of other expenses.
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But that doesn’t mean snowflakes can’t help you pay off your debt faster. And if you start looking for ways to save/make money each week — yard sale, anyone? — those little snowflake payments can add up fast.
Interest rate | Minimum Payment | Monthly Addition to Your Payment | How Many Months It Will Take to Pay Off Balance | Amount of Interest Paid | |
---|---|---|---|---|---|
No Snowflake | 17% | $90 | -0- | 46 | $1088.88 |
With Snowflake | 17% | $90 | 100 | 18 | $419.80 |
If you’re using a debit card, you can transfer the amounts into a separate account in real time.
Where to Gather Your Snowflakes
First, debt snowflake is basically an offshoot of debt avalanche and debt snowball, two popular methods for tackling debt. Here’s a summary of those methods, in case you’re unfamiliar with them:
However you save it, do yourself a favor and track the additional amount you paid each month as a reminder of how much those little snowflakes can add up — you can use it for motivation when Uber Eats beckons you.
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So how do you capture them? If you’re using cash, you can start a change jar to collect your savings at the end of the day — just make sure to deposit your savings into your bank account and use the entire amount to pay off the debt on a regular basis.
Accumulation is the key to making snowflake work. It requires you to realize all the ways you can save and/or make extra money each day — above and beyond your usual strategies.
Less debt? Now that’s cool.
Need more suggestions for piling on the pennies — and dollars? We have a blizzard’s worth of ideas:
Ready to stop worrying about money?
Let’s look at another example: <!–
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Just like snowflakes, tiny payments might not seem like much when tackling a mountain of debt. But when they pile up, your snowflake payments can add up to a lot of help. Here’s how.