Snowflake Your Debt

The term "debt snowflake" refers to a strategy for eliminating debt that automatically sets aside a portion of any modest savings to use against previously accrued obligations. It sounds a lot like other tactics that try to speed up the arrival of your debt-free date, but there is a significant difference between the two:

When you use the debt snowball method, you put any extra money toward paying off the account with the shortest balance first. This gives you a psychological win as you put that payment toward the debt with the next smallest balance.
When you do a debt avalanche, you pay off the loans with the highest interest rates first, which brings down the overall amount of interest you have to pay. It will provide less satisfaction in the near term but will be more efficient overall.

Both of these methods involve spending money that has been set aside in your budget to pay off debt. The Snowflake Method, on the other hand, seeks minute opportunities for saving daily and puts those funds toward bringing forward the day when you have no more outstanding debt. It can be used in conjunction with the snowball or the avalanche strategy. Small amounts of money saved up over some time may, like snowflakes, add up to a significant amount. And you'd better be quick about it since snowflakes vanish just as quickly as they arrive.

Make the Most Out Of Found Money

If you've done thorough budgeting, you may believe there are no further opportunities for cost reductions. But the snowflake payments, which are payments of a little amount toward a larger debt (or an emergency fund), might come from less apparent sources, such as the following:

Sharing a 12-inch sub with a buddy when you normally purchase a 6-inch sub for yourself can save nearly $2!
Find a twenty-dollar cash tucked away in a coat pocket (and before you take clothes to the cleaners or donate them, please check all the pockets).
A cheque for an unanticipated refund arrived in the mail.
A yard sale.
Compensation for projects that fall outside of your typical financial constraints.

This is not money that is already accounted for in your budget; rather, it is money that you have discovered. You should also refrain from diverting the funds set aside for your personal spending choices since the budget will only be able to function properly with those funds.

The point is to take advantage of these unexpected influxes of cash rather than letting them slide through your fingers without making even the slightest contribution toward your long-term financial objectives, such as consolidating and paying off your credit card debt.

Capturing Little Bits of Cash

How Can You Prevent Such A Modest Amount Of Money From Being Completely Wasted?

If you maintain a change jar, you may put whatever extra money you save in there, and then at the end of the month, you can use that money to help pay off any debt you have. The most crucial step is to ensure that it is not now accessible for spending in your pockets or wallets. Be sure the bank locations are easily accessible if you want to deposit cash.
If the money in your bank account has yet to be spent, certain financial institutions, such as banks and credit unions, may let you transfer even very small sums from your checking account to your savings account. You can also write a check to yourself or collect the several little transfers together and make them all at once, for example, once a week.
If you want to get rid of a loan faster by utilizing snowflakes, you need to be sure that the lender would take additional payments and that you will be able to put the extra money toward the main of the loan.
Make sure you won't be charged any additional fees on either end of the transaction if you want to use your credit card to make "micropayments."

Every day, look for opportunities to save costs. Always being on the lookout for new opportunities to cut costs is essential to the success of the Snowflake Method. Reduce the money you spend on things you don't need by looking for cheaper alternatives or just not buying them. If you put aside $3 daily, you'll have approximately $100 more at the end of each month to pay off your debt. You can save several dollars daily by brewing your coffee and bringing it to work in a thermos. This is a simple approach to save costs. Make a sandwich at home and bring it with you to the office rather than going out to purchase lunch. You should consider the smallest amount of money saved a "victory" and celebrate it. Give yourself a hearty fist pump, but remember to pay off your bills afterward.