The Debt Snowflake Method: How It Works And How To Use It

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One of the most difficult financial challenges to face is debt. Debt practically restricts your financial capacity. You won’t be able to save toward your money goals or even have some peace of mind. The debt snowflake method is one of the popular strategies for achieving a debt-free life. This strategy can help you clear your entire debt balance if you are willing to stick to the process of how it works.

I still remember when I had credit card debt to pay off. At the time, I already had a good source of income but I felt using multiple credit cards won’t have any bad impact on my finances. “After all, I would pay them back”, I always thought. However, by the time my debt piled up, I knew I was in trouble. I had to rely on the debt snowflake method to pay off what I owed until I regained my financial freedom.

In this post, I would explain what the debt snowflake strategy is and use a practical example to describe how you can personally employ it to quicken your debt-free date.


What Is A Debt Snowflake?

Based on how this strategy works, debt snowflake refers to the little amounts of money you gather to pay off debt. Just as so many snowflakes can merge into a big chunk of snow, you can add up small amounts of cash until you realize a significant amount of money big enough to pay off your debts.


How The Debt Snowflake Method Works?

If you are desperate to come out of debt, the debt snowflake method can help you achieve your goal successfully. Millennials are currently using this strategy to pay off tens of thousands of dollars in student loans. By paying attention to the small amounts of money around, you can raise a surprisingly large amount of cash to clear your debt on time.

Just like the debt snowball and debt avalanche methods, the debt snowflake works in a simple way. As a debtor, your job is to apply small savings directly toward your debt. This is something you are expected to do as often as possible. Over time, the little contributions you are making toward your debt would add up.

For instance, imagine saving $25 every week. At the end of the month, you would have gathered $100. In a year, you would have $1,200. Applying this same savings habit toward your debt repayment can make a significant difference.

debt snowflake method


How Do You Use The Debt Snowflake Method?

Using the debt snowflake method for paying off debt is quite feasible. As long as you’re not too desperate to skip the process, you would get the desired results. Here are the steps I recommend when using this strategy:


Step 1: Saving

One of the major steps to using the debt snowflake method is knowing how to save in small ways. I would advise you to begin by reviewing all your subscriptions and ditching the ones that are not important. You might want to stop watching Netflix. There are dozens of free sites like Netflix that offer premium entertainment. Save that extra $14.

Paid music streaming services like Apple Music and YouTube Music can cost you money unnecessarily. There are other free platforms such as Boomplay where you can enjoy millions of songs without spending a cent.

Your cable subscription is another area to look at. If you really want to speed up your monthly debt payments, you should consider forfeiting cable.

When it comes to grocery shopping, you should take coupons seriously. They can help you save hundreds of dollars over time. If you are the type that eats out, you need to get used to cooking your own meals at home. Eating out consumes a lot of money and you won’t even notice it.

Aside from finding ways to save money, you can also get a side hustle. Sometimes a single paycheck won’t be able to cover your monthly bills and still pay off debt. You need to create a side income as soon as possible. I wrote a post that talks about 15 easy ways to make extra money. You could check it out.


Step 2: Repay Your Debt

Once you are able to develop a good savings habit, the next step is to start paying off your debt. At the end of the day or week, calculate the money you were able to save and send that money directly to your debt balance.

For example, once you realize you are saving around $4 on groceries every day, transfer $4 from your online bank or checking account toward your loan payment. It’s important you direct the savings toward your debt balance immediately, so you don’t get tempted to spend it on something else.


Step 3: Track Your Payments

It’s important you implement a tracking system when using the debt snowflake method. Sometimes it can be difficult to recognize the impact of the tiny amounts of money you save daily. In order to stay motivated, you should track how much you’ve paid off. You can use a spreadsheet to keep a record of the payments from your end.

Anytime you pay up to $50 worth of loan, document it in your spreadsheet. Tracking your little progress will encourage you to keep up with your payments.


Step 4: Invest Your Savings

When you successfully pay off your loans with the debt snowflake method, I would recommend you invest your income. This will create some financial stability and possibly prevent future debts.

Once you no longer have any debt that collects your savings, you have the opportunity to invest in mutual funds and ETFs. This online investment option can help you grow your money without breaking a sweat. Besides, you don’t need a ton of money to get started. I made my first investment with less than $300.


An Example Of The Debt Snowflake

To further decipher how the snowflake method of paying debt works, let’s use a hypothetical example. Let’s assume Mr. John who lives in California has a credit balance of $5,000 with an APR of 15%, and his minimum payment is $150. Mr. John would spend at least 3 and a half years to pay off his debt. Meanwhile, $1,509 will go to interest.

However, if Mr. John starts saving just $5 on grocery shopping every week with coupons, he would have an extra $20 every month to contribute toward paying off his credit card balance. His repayment would take only 3 years and he would spend just $1,272 in interest. This would help him save a significant amount of money.

Besides, remember Mr. John can also save more money through other channels. From subscriptions to utilities, one can derive extra money toward a savings goal.

I’m not saying this debt snowflake example is the ultimate method for paying off credit cards and student loans. You can even rely on other strategies to make the process quicker. Notwithstanding, “debt snowflake” would certainly have an impact.


The Pros And Cons Of Using The Debt Snowflake Method

Before you try to pay off debt using the debt snowflake, you must acknowledge some of the benefits of the strategy, as well as other things that may not make it the perfect strategy for paying off debt. This is why I would briefly discuss the pros and cons of this method.

Having understood the advantages and drawbacks, the prerogative is yours to decide if it’s the ideal debt-repayment technique for your financial situation.


  • Can Work On A Tight Budget

The debt snowflake method doesn’t require you to have a lot of money. You don’t have to set aside a specific amount of money toward the debt balance every month. You can rely on everyday savings to reach your goals. The $5 or $10 you can save every week will make a difference. You just have to be consistent with it.

This also means you have to deliberately find ways to save extra money by cutting down on your living costs. Here are some frugal-living tips you can use to save a significant amount of money toward your debt repayments.


  • Flexible

This method allows you to decide how much time and energy want to sacrifice. You really aren’t committing yourself to any tedious work. Your main responsibility is to find ways to save money.

Once you’re saving money and contributing the savings towards paying off the debt, you don’t have anything to worry about. With time, you will realize how far you’ve come with your goal.

The only extra thing you can do is track your progress. Besides, monitoring your progress is not much of a problem. It will only motivate you to keep pursuing your goal.


  • Helps You Make Better Money Decisions

Just like other methods, the debt snowflake method compels you to save, you will learn to develop a good spending habit. Your everyday effort to reduce expenses will have you spending less money.

If you used to make impulse purchases, you would have no choice but to break that habit. You will be encouraged to adopt good money habits like building a monthly budget, shopping with a list, and being discreet when it comes to making big purchases.



  • Difficult To See The Long-Term Impact

Unlike other debt repayment strategies, you won’t see significant progress immediately after you start using the debt snowflake. It will be hard to stay motivated if you’re looking for short-term impact. Hence, if you aren’t disciplined, you will fall off almost immediately. This is why I recommend having a tracking system.

Seeing the little process you are making will encourage you to remain motivated even if you’re still far from your goal. By seeing how much you have contributed towards your debt, you will see the possibility of achieving the goal eventually.


  • Requires Organization And Discipline

When using the debt snowflake method, you have to remain committed to the cause. This will require you to be organized and disciplined with your operations. Be consistent with your savings, which shouldn’t be difficult since you are only saving little amounts of money.

You need to also have some serious level of mental focus when paying down debt. This is because it’s a long-term goal; something that could take half a decade or more (depending on how much you owe).


Who Is The Debt Snowflake Method For?

The snowflake method of paying off debt is actually for anyone. Whether you are trying to pay off student loans, mortgages, credit cards, or car loans, you can employ this strategy. Moreover, I would also recommend this strategy if you’re feeling overwhelmed by the amount of debt you have to pay. Debt Snowflake brings you closer to your debt-free days without putting you under any pressure.

Remember, you just have to causally save a couple of bucks weekly/monthly towards your goal. Unlike someone who’s not using this strategy, you would pay off your debt faster and save extra money on interest.

Besides, if you are the type that struggles to save money, I would advise you to consider this small savings method for paying off debt. You won’t have to fix your mind on big savings goals. In this situation, it’s the small things that matter.


Quick Summary: The Debt Snowflake Method

I am certain that you’ve found the exact information you’re looking for about the debt snowflake method. You can use the comments to mention anything that I didn’t talk about.

However, I can say for sure that the information discussed in this post will help you significantly as you navigate through the challenging process of paying off debt. Using the debt snowflake tips in the brief example I gave, you should be able to make the right decisions.

More importantly, regardless of the strategy you intend to use to pay down your debt, don’t forget you have to maintain a good credit history. As you make efforts to pay off your loans, prioritize your credit score in the process.


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Author: Anthony Ihz

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