5 Rules for Debt Snowflaking (Who Knew There Was a Name for It?)

by anna on January 12, 2009


Remember when I explained one of my methods for debt reduction whereby you would send in little bits of money to your credit card companies all the time, just as you got a few extra dollars here and there? Like, say, you returned something and were credited $20 to your debit card, you would then turn around and send a bill pay to your Visa card for $20? The idea being: you had been functioning without that $20 for however long, you wouldn’t miss it, and though it wasn’t a lot of money, little bits like this would be worth more down the road when you look at interest rates, etc.?

Well, turns out that: 1) I didn’t invent this method, despite my thoughts to the contrary; and 2) that there is actually a name for it, taken from the concept of debt snowballing that we have already discussed. Yep: it’s called debt snowflaking, and though I will still certainly argue that I am a unique and special snowflake, I guess other people have already discovered and documented this method before me. I read an article about the debt snowflaking technique on Get Rich Slowly recently that is helpful for people wanting to integrate this method into their daily lives, and points to the technique’s having been originated on the iVilliage debt support discussion forums. Cited as a source for information on debt snowflaking is Jamie at I’ve Paid For This Twice Already, who has five golden rules for debt snowflaking:

  1. Snowflake early and often. Start now and make it a habit. If you get accustomed to this, it can become a game. Snowflaking can almost make debt reduction fun.
  2. No amount is too small to snowflake. “I have snowflaked as little as $1.04 and as much as $1313.74 and everything inbetween,” Jaimie writes. “Any amount can be a snowflake, and any amount can make a difference.”
  3. Anything can be a snowflake. Did a friend repay $5 she borrowed last week? Did you take cans and bottles in to redeem the deposits? Did Aunt Marge send you $20 for your birthday? Was your tax refund bigger than expected? All of these can be snowflakes.
  4. Snowflake as immediately as possible. This is key. Apply your snowflakes to debt as soon as possible, before you have a chance to spend the money. I know from experience how easily those extra dollars become books or videogames or new clothes. Snowflake when you get the money.
  5. Keep track of your snowflakes to use as motivation. “A lot of small amounts may not seem like a whole lot if you don’t keep track of them,” Jaimie advises. “Keep a running total once a month to see how those small amounts add up.”
  6. Source: “Five Golden Rules for Snowflaking,” I’ve Paid For This Twice Already, 2008.

So I guess what we’ve learned is: when getting out of debt, great minds think alike. I think I’m going to start snowflaking again, this time on our mortgage. Sure, it’s going to take a while to make a dent, but it’s kind of exciting to watch how much your balance can go down just from these little, uh, flakes.

What are you guys going to snowflake?

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{ 1 comment }

Kerry January 12, 2009 at 8:53 am

I’m amused by snowflaking advice from someplace where the temperature is probably, like, 72 degrees today or something. Bah.

But that really IS great advice…we made extra payments on our mortgage when I was working, and I am SO glad we did, because now that we are refinancing we have enough equity to get a better rate. Little efforts really do add up.

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