Dissolve Your Debt With The Snowflake Method

If you're ready to put a big dent in your debt, here's how to do it, little by little.

There are countless ways to pay off debt. But not every method is right for everyone’s financial situation. And if you’re looking for new strategies to help dissolve your debt gradually, this one might be worth considering.

First things first, start thinking smaller. Some strategies promise big pay-offs, others require your entire paycheck, and many come with majorly rigid terms. There are people who swear by the Snowball and Avalanche methods because of their concrete structures and big wins. But let’s talk about a method that provides a little more freedom, a little less pressure, and the chance to tackle your bills every day, even if only a little at a time; it’s called the snowflake method.

Think of these tiny payments as snowflakes. It may not seem like very much at first, but your efforts will eventually show themselves in bigger ways. Like Voltaire once said, “no snowball in an avalanche ever feels responsible,” and no snowball could be made at all without tons of tiny snowflakes. In other words, the more you let your “snowflakes” accumulate, the more those efforts will add up in your favor. Here’s how it works.

Snowballs, Avalanches, And The Snowflake Method

If you’re familiar with terms like “debt avalanche” and “debt snowball,” you might have some idea of what the snowflake method looks like. But if you’re not familiar with the first two, here’s how they work.

With the avalanche method, you make paying off your debts that have the highest interest rates your first and foremost priority. Once you’ve settled your biggest debt, you move on to the next highest, and so forth. Those who want to save the max amount of money on interest while paying down debt typically go this route. The snowball method is basically the polar opposite approach; you pay off your smallest debt first and then pay off larger debts until you’ve reached the biggest. For those driven by little victories, resolving their debts, no matter how small, can feel like a major win. Watching debts disappear can also encourage and increase debt-paying momentum.

The main thing these options have in common is that you must create schedules to make payments and budget in a way that puts most of your money towards paying down your debt. But the snowflake method is different.

woman putting money into piggy bank and using calculator

Per The Penny Hoarder, “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.”

With the snowflake method, it’s all about accumulation. In other words, you’re prioritizing small ways to save and make more money on a daily basis. For instance, maybe you buy a large coffee and a fresh pastry for $8 dollars every morning. Switch up your routine. Buy a medium coffee for a dollar less. Or, have coffee at home and just buy the pastry. By spending a little less consistently, you’ll start putting a lot more back.

This, of course, is one of many examples. There are all sorts of situations that arise throughout our day that are opportunities to cut back in real-time. There are also options to increase our “snow pile.” Maybe your neighbor needs a dog sitter or a babysitter for the weekend and is looking to pay someone. So why not you?

Whatever small amount you save that week, or even that day, put it towards any debt that you can. Maybe you earned and saved an extra $22 dollars today. Take that money and put it towards your credit card debt immediately. Then repeat the process tomorrow, saying yes to unforeseen opportunities and organically revamping your daily routine to include a little more frugality.

But… Does it Actually Work?

Obviously, splitting the bill with your best friend at dinner or switching from premium gas to regular isn’t going to make your debt disappear overnight. In fact, the snowball method might prove so small that the results you’re getting don’t feel worth it to you at the end of each day. Word to the wise: don’t rely solely on this strategy to tackle all of your debt.

Most people who incorporate the snowflake method use it along with another method. There’s always more than one way to solve a problem after all. And considering that a snowflake, snowball, and avalanche have an obvious relationship, it’s not a bad idea to add the snowflake method as an additional strategy, rather than the only one. With all of that said, it definitely works, as long as you consistently put this “add on” method into practice.

question mark in the snow

The beauty of the snowflake method is it allows you to explore more options for paying down debt. So get creative. Start selling clothes you no longer need online. Have a yard sale and see what happens. The more little money saving and making moves you’re able to come up with, the bigger the dent you’ll be able to put in your debt.

What to Consider When Gathering “Snowflakes”

Because you’re making micropayments, the only sure way to reap any real benefits is to stick to the process of paying. After all, snowflakes are tiny and disappear quickly. Why waste your effort only doing it once? You want to build this snow pile until it’s big enough to be seen. So move quickly and stay proactive.

To gather your snowflakes regularly, keep a change jar, coin sack, or some other apparatus handy. Whatever you collect should be deposited and put towards your bills on a regular basis. Otherwise, those tiny snowflakes will likely melt away.

dollar sign in the snow

With that said, be sure you know your bank’s policies on transaction fees. Some may charge much more than its worth, while others only allow a certain amount of moving around money per month. So be sure to continue collecting and time out your deposits accordingly.

Some financial experts say to keep a running tally of your savings for a one, two, or even week period. When that decided period ends, pay the total amount. No matter how you choose to save up, it’s wise to keep track of any additional payments each month. This way, you’ll be able to easily and readily remind yourself of how that one little snowflake evolved into something much bigger, something that actually helped you pay down your debt significantly.

When in doubt and ready to splurge, refer to that tally sheet and remind yourself how far you’ve actually come, one tiny payment at a time.

See Related: Our Guide to Downpayments for First Time Home Buyers

How To Keep Small Savings From Evaporating

One of the biggest problems with small payments and small savings is that they can sometimes be met with larger fees. And obviously, getting hit with fees while you’re trying to make headway defeats the purpose of what you’re trying to accomplish. Here are a few key ways you can stop those helpful snowflakes from needlessly disappearing.

  • Never underestimate the value of a change jar. That money can help pay down debt at the end of every month. It’s within reach, but more importantly, it’s not somewhere you’ll be more prone to spending it like your pocket, wallet, or purse.
  • If you have unspent money in your bank account, many banks and credit unions often allow those who bank with them to transfer even miniscule amounts from their checking account to their savings. Nobody needs an excessive amount of service fees, especially when you’re transferring tiny stacks of cash. Consider grouping your micro transfers together to avoid getting hit with fees that you definitely don’t need.
  • Are you using your snowflakes to get rid of a loan sooner rather than later? Well, then you’ll want to be sure that those extra payments are A-okay with your lender. Also, see if you can have the extra cash applied toward principal.
  • If you’re making “micropayments” on your credit cards, look into the terms for your line of credit. You want to make absolute sure that you won’t incur charges with each transaction before you start using the snowflake method to pay it down.

The Takeaway

Very few things are cooler than the concept of fully paying off debt. Financially speaking, the average person has to devote significant time, energy, and cold, hard cash to pay it down, down, and down some more first. So don’t delay.

A “debt snowflake” can go towards paying down your debt in an immediate way, but you will need to act quickly. You’re earning a little here and saving a little there, and collecting it all in a “snow pile” before putting it towards your bills and debts. But remember, snowflakes melt almost immediately after we capture them. And that’s true of “debt snowflakes” too.

woman wearing all white playfully blowing the snow out of her hands into the air

The trick to getting the most out of this method is to employ it creatively, consistently, and ASAP. As you find tiny, day-to-day savings, you’ll put them towards reaching your zero-debt goal and watch it drop, little by little. The sooner you start, the sooner that big pay-off will come. Just have patience. Also, consider compiling it with its similar, but more structured methods noted above. That’s always a solid approach.

No matter what, these tiny, but helpful payments can have a sizable impact down the road. So start capturing as many snowflakes as you can, as often as you can, starting today. They’ll always add up tomorrow.

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