How the Debt Snowflake Method Uses Small Payments to Pay Off Debt

If you’re not ready for a snowball or avalanche debt repayment approach, consider going smaller. Much smaller.

Consider a debt snowflake strategy for debt resolution. Unlike its better-known siblings, the Snowflake Law doesn’t involve a structured budgeting system for paying down debt — think of it as an easy way to put a little extra money into your debt.

Like snowflakes, micropayments may not seem like much when dealing with mountains of debt. But when they pile up, your snowflake payments can add a lot of help. That’s it.

How does the debt snowflake law work?

First, the debt snowflake is basically Debt Avalanche and Debt Snowballing, two popular ways to resolve debt. Here is a summary of these methods in case you are not familiar with them:

• The avalanche method prioritizes debt repayments with the highest interest rates. After paying off the largest balance, you’ll move on to the next-highest interest debt, and so on. This is the best way to save the most interest when paying down debt.
• With the snowball method, you pay off the least amount of debt first, and then build up by gradually paying off larger debts. This is great for those who are motivated by small wins as they watch personal debt disappear faster.

Both options involve creating a payment schedule and using any funds to target the target — not the case with debt snowflakes.

Accumulation is the key to making snowflakes work. It requires you to understand all the ways you can save and/or earn extra income every day—beyond your usual strategy.

Consider this situation:

On your drive to work, you stop for a $4 jumbo coffee. If you downsize to a medium for $3, you’ll save $1.

At lunch, you and your colleagues head to the deli to buy $10 subs. Instead, by splitting one, you’ll add $5 to your snowflake stack.

After get off work, your neighbor asks if you can babysit her toddler for a few hours. You think it’s a favor, but she insists on giving you $10 to make up for your trouble.

At the end of the day, you have saved/earned $16 and you pay your credit card balance immediately.

Need more advice on stacking pennies and dollars? We have Blizzard’s thoughts:

Ways to save money:

Ways to make money:

Does the snowflake method really work?

We’re not trying to give you some nasty work (like you don’t think I’m going to be there) — collecting your savings by splitting sandwiches isn’t a quick way to pay off your $20,000 in credit card debt.

In fact, the snowflake method can have such small results that you might want to think of it more as a complement to other debt repayment methods.

But that doesn’t mean Snowflake can’t help you pay off your debt faster. If you start looking for ways to save/make money every week – yard sale, anyone? – Those little snowflake payments can add up quickly.

Let’s see another example:

You are trying to pay off your $3,000 balance on a credit card that charges you 17% interest and requires a minimum monthly payment of $90. See what changes you can make if you can accumulate $100 more with debt snowflakes:

	interest rate	minimum payment	Increase your payment each month	How many months does it take to pay off the balance	Amount of interest paid
no snowflakes	17%	$90	-0-	46	$1088.88
with snowflakes	17%	$90	100	18	$419.80

You’ll save about $670 and reduce your debt repayment time by 28 months. Let it snow!

where to collect your snowflakes

Here’s the thing about snowflakes: they melt fast. If you’re going to use the snowflake method, you need to act fast before your micropayments disappear into the abyss of other fees.

So how to catch them? If you use cash, you can start a coin bank at the end of the day to collect your savings – just be sure to put your savings in your bank account and pay off your debt with the full amount on a regular basis.

If you use a debit card, you can transfer the amount to a separate account in real time.

But be warned: many banks have limits on the number of transfers you can make in a month, and you don’t want all of your Snowflakes to pay transaction fees.

Instead, record your savings for a specific period, such as every two weeks, and then pay the total amount at the end of that period. Also check with your lender to make sure you’re not being blamed for making multiple payments within a specified period.

No matter how you save it, do yourself a favor and keep track of how much extra you pay each month to remind you how much these little snowflakes can add up — and you can use it to motivate you when Uber Eats beckons.

Little debt? Now that’s cool.

Tiffany Wendeln Connors is a staff writer/editor at The Penny Hoarder.read Her resume and other jobs are herethen catch her on Twitter @TiffanyWendeln.

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