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What Is Debt Snowflake Method And Should You Consider It?

The debt snowflake is one of the most common concepts of saving and may help you to get rid of debt. Here's what you should know.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024
The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.
Author: Baruch Mann (Silvermann)
Baruch Mann (Silvermann)

Writer, Contributor

Experience

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
Interest Rates Last Update: April 15, 2024

The banking product interest rates, including savings, CDs, and money market, are accurate as of this date.

We earn a commission from our partner links on this page. It doesn't affect the integrity of our unbiased, independent editorial staff. Transparency is a core value for us, read our advertiser disclosure and how we make money.

Table Of Content

There are a few different options for what to do when it comes to getting rid of that debt. The debt avalanche method tells you to start paying on the card with the highest interest first, saving you on interest charges.

The debt snowball tells you to start paying on the card with the lowest balance first, giving you the morale to keep going. Either way can be highly successful and make it easier for you to get out of debt quickly.

With either of these, you need to make extra money from your monthly budget to pay down the debt. But not everyone can do that. Or at least, not everyone feels like they’re able to do that. You can use the snowflake method if you don’t have a lot of money to put toward that debt. It’s not meant to be a third option but to help you choose one of the others.

What is The Debt Snowflake Method?

This concept is actually one you probably already know. Make one-time payments whenever you can toward your debt.

A snowflake is small, but when you get many of them together, they can build up in strength. So, if you have $20 to put toward your debt, it will eventually add up over time. That $20 from not going to lunch today could be another $20 tomorrow or even once a week. Whatever it is, keep saving and putting it toward debt.

As you continue building and building, you’ll find that you’ve got an extra $100 at the end of the month. Then you don’t have to feel overwhelmed next month because you don’t have to have that $100, you save what you can and keep moving. Just $100 a month, if you can find it, can greatly impact the amount of time it takes to pay down your debt.

This method works with either of the other two. Pay down the smallest debt first or the highest interest first, either way, you use your ‘snowflakes’ to do it. All you’re using this for is a way to find the money that you’re using.

The Snowflake vs. The Snowball: What's The Difference?

Now, when you use the snowflake process, you’re not getting rid of the snowball. Instead, you can use the two together. When you use the debt snowball, you are taking a set amount of money out of your monthly budget toward your debt. On the other hand, the snowflake method is a single payment.

With an avalanche, you’re starting with your highest-interest debt. That means you pay less in total interest. You will have more efficiency but less immediate impact in the short term.

Both of these will use budgeted money to pay off the debt.

How To Use The Debt Snowflake Method?

The first thing to do here is to make sure you pay any extra money that you get directly toward your debt. You’ll make each payment immediately, as soon as the money is available. So, if you do a side job for someone and get $20 you’ll put it toward the debt. If you sell something you put that money toward the debt, and so on.

You can use the excess money that you get from budget items too. If you didn’t spend all of your grocery allowances put that money toward your debt. If you came in under budget on the back to school shopping put that toward the debt.

 

Have you ever kept a spending log? If you haven’t then you absolutely need to check it out. If you track everything you spend you’re going to find out a lot about what you’re spending, and that’s extremely important.

You can do this manually or you can use a debit card and check the statement for all your spending. Then, take a look at where your money went over the month.

Only by knowing where the money goes can you actually stop spending it poorly.

We all have things that we tend to spend more money on than we should. These could include your cell phone data, eating out, buying items you don’t need, impulse buying, and more.

These things make it challenging to stick to a budget because we don’t even realize we’re spending the money.

Make sure that you each bit of extra money that you have you’re keeping track of. That’s the money you want to use for your debt at the end of the month.

Now, look for any way to figure out money savings. These are just a few ways you can go.

  • Use Coupons from coupon websites, apps, or even the store websites and apps so you can save even a few cents at a time.
  • Get rid of subscriptions you don’t use, from magazines and music to TV and gym memberships.
  • Get cash back as often as possible for any credit card purchases.
  • Go out during happy hour or special nights rather than full-price nights (if you have to go out at all).
  • Look for free activities in and around your community. You can find classes, programs, fun activities, and much more.
  • Get money back for your purchases through online resources.
  • Don’t buy convenience items.
  • Get a side hustle to earn a little extra money.

Pros and Cons of Debt Snowflaking

This method of paying your debts has some great benefits. It helps you psychologically, and it helps financially. You’ll always keep watching your budget for ways that you can save and add more to your debt.

You’ll also be more likely to do what you can to cut back. You’re also going to find a good use for the money that otherwise would just be spent on unnecessary things.

The only real downside is it can be a little too flexible.

Pros
Cons
Tight Budget Still Work
Not A Full Solution
Flexible
Hard To Predict The Impact
Small Money

If you have a really tight budget, it still works because you’re not feeling the loss of money for a specific area. You’re only using the extra money that you didn’t need for that area.

You can make small changes quickly because you’re paying toward your debt with whatever you might have. Even with just $5 extra you can start building up a much bigger impact on your debt.

You don’t miss the money that you’re paying because it’s such a small amount. 

Instead, you just notice the difference on your amounts that are due every month or how quickly you’ve paid the debt off.

This isn’t going to take care of paying off your debt. You’ll be able to make some impact, but you need a more focused strategy toward paying one particular debt off before you pay the rest.

That’s how you can turn this method into something more successful.

If you can set aside a set amount of money every month, you’ll see steady progress and continued impact on your debt. If you’re using the snowflake method, you’re seeing a slower process.

It will only be whatever you can save up in any given month, which will vary from one month to the next. You might have a month where you do great and send a lot of money to debt.

You also might have a month where you can’t scrape together anything extra you can afford to give up.

Bottom Line

Overall, this is a great way to do it for those who want a way to make an impact without feeling like they’re missing out.

You can even keep track of all of your little snowflakes to see how they’re going toward your debt and what kind of results you will see.

Picture of Baruch Mann (Silvermann)

Baruch Mann (Silvermann)

Baruch Silvermann is a financial expert, experienced analyst, and founder of The Smart Investor.  Silvermann has contributed to Yahoo Finance and cited as an authoritative source in financial outlets like Forbes, Business Insider, CNBC Select, CNET, Bankrate, Fox Business, The Street, and more.
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