If you’ve ever been faced with a large amount of debt to pay off, you know just how overwhelming it can seem. You just know it’s going to take a long time to pay off and you’ll end up paying a lot of interest.
The part that many people overlook is the power of chipping away at that debt with lots of small extra payments. This is referred to as snowflaking your debt.
Basically you do what you can to make extra money in your spare time and pay it directly towards your debt. It doesn’t matter how big or how small the money you make is. The key is that you consistently work at it and pay off as much as you can.
For some people it might mean taking on a side gig such as babysitting to delivering pizzas. For others it might be spending their time creating some kind of crafts that can be sold online or at crafts fairs. If you’ve got writing or design talent, you could offer your skills as a freelancer online. Or maybe it’s something smaller like returning your bottles and cans.
These amounts might seem like small payments, but when consistently made over time it can have a significant impact on your debt. When you see the impact it has on your debt repayment it is bound to give you the motivation to find other money making ideas.
Then once your debt is all paid off you could keep these side gigs going to work towards your other financial goals. That new car or vacation suddenly becomes that much easier to save up for.
If you are a blogger and would like to participate in future giveaways, click here.
Do you use the snowflaking method when you are paying off debt? Or do you have any other strategies that have worked well for you?
I love me some snowflakes. We used to track our”snowflake income” that we threw at our debt back in the day. Great giveaway, because it’s the little things that can go a long way. you know…..assuming you put the money toward your debt
Jacob @ iheartbudgets recently posted..Cloth Diapers vs. Disposables: Cost Comparison
Just like the example in your post today Jacob. People might manage to save some money or earn extra money, but they’re not necessarily disciplined to put it all towards their debt or savings goals.
This is a great way to pay off debt. I think more and more people out there require a “side gig” so to speak in order to pay off debt and save for other desires such as a vacation. (I know this is true for me)
Jason Clayton | frugal habits recently posted..Don’t Neglect what is Truly Important in Life
It was definitely true for me over the years. If I just relied on my daytime job, there’s no way I’d be able to afford the extras like vacations, a nice car and other luxuries. Of course I didn’t really need all that, but I was irresponsible for a long time.
I’m going to say yes as any extra money we make goes towards our debt (mortgage) which we can now pay off in full. It’s because of all those little sacrifices along the way and putting aside extra money we made whether through overtime, selling something, or side work that this has been helpful along our journey! Great contest mate. Cheers Mr.CBB
Canadianbudgetbinder recently posted..Scanning Code of Practice (SCOP) In Canada…Did You Know?
Congrats on being able to pay off your mortgage now Mr CBB. That must make all those sacrifices feel so worthwhile. Now think of how much you’ll be able to save for retirement if you keep up those same habits.
Any money we save by opting for cheap or free entertainment goes in our snowflake account. For example, if we can catch a free outdoor concert instead of going to the movies, the money we save goes to pay off debt.
That sounds like a pretty good strategy to me. That way you get to see the actual effect of opting for that cheap or free entertainment. I think it would just be hard to quantify some of those activities such as a day at the beach or a walk in the park.
If you have a hobby or knowledge in a niche area you can often make a bit of extra money on the side from it to aid your snowflaking! I think I need to enter this giveaway now.
Money Bulldog recently posted..Will Moving To A Nicer Area Lower Insurance Premiums?
There really are a ton of ways to make extra mind if you are willing to put in work. Even without any special skill, there are various side gigs you could take on.
I saw a few bloggers doing this… very cool! Glad you got to participate.
Lance @ Money Life and More recently posted..What Would You Do? Pay Off Higher Interest Rate or Variable Rate Loans First?
Well the host will be keeping this going weekly for a while. So feel free to join in. There’s a good chance I’ll take part again if my stats get padded a bit.
I work 4 jobs and only 2 are consistent paychecks, so the other two are my snowflakes. At the start of the month I’m only on a schedule for 2 days but by the end of the month I’ve picked up 13 days! It helped us pay of $30k in 9 months.
Jessica @ Budget For Health recently posted..Make a photo book online with Blurb- FREE GIVEAWAY!
Wow, 4 jobs?! Paying $30k in 9 months is pretty impressive. You deserve a lot of credit for working so hard and still finding time to blog.
I’ve honestly never heard of this idea or theory before but the sound of it is incredible. Smart ideas like these are needed.
I wouldn’t really say it’s a ground breaking strategy since I’m sure people have been doing something like this ever since debt was invented. The only difference is that people often stop worrying about small payments once their debt is too big.
Brushing away at debt, one snow flake at a time
. We all have to start somewhere, and the sooner we start paying off that debt the better. My strategy for paying off debt doesn’t come until later in life. Right now I’m not too concerned about paying it off. In fact my debt actually increased every year for the past 4 years, but I know I’m weird like that lol. But when I start to de-leverage some day I’ll want to try out this snowflaking method for sure.
I know if you case that debt isn’t a big concern. You’re obviously pretty smart with your investing so that you’re making much more through investment income than through any debt interest. It goes to show that some debt isn’t necessarily a bad thing if you are using the money in a smart way.
I like the way you put that argument across Jeremy! For me, the realisation came when I looked at the difference a few hundred pounds extra a month would make on my mortgage – It takes 10 years off the duration!!!!
Savvy Scot recently posted..Packing Reminders For Your Honeymoon
For sure, looking at the calculations can really magnify how big an effect this strategy can have. The more money you can throw at that debt each month, the quicker it will get paid off and the less interest you pay. Unfortunately people often make excuses about why they aren’t willing to make the sacrifice to work harder.
I like snowflaking when I receive extra income, previous side gigs have included teaching French and Spanish, tutoring kids, catering and waiting tables at a wedding, supervising school excursions, baby-sitting… it can really make a difference
Pauline recently posted..Watching your Alexa ranking every day is like checking your weight daily when dieting
Sounds like you’ve done a wide variety of side gigs. The variety probably actually makes it easier since it would keep things interesting. Each of those gigs is sure to knock off some payments from your debt.
I think that rather than finding a small amount of side income to help reduce debt, most peoples efforts would be better focused on finding small savings in their existing spending regime.
Say like not buying that daily morning coffee… It doesn’t sound like it would do much to help reduce your debt, but with the added power of compound interest things can really start to add up.
Glen@MonsterPiggyBank recently posted..How coffee is impacting on your mortgage
I agree that cutting expenses helps a lot too, and that savings can be snowflaked too. Ideally people combine both strategies and find ways to pay off a lot of their debt each month. You just have to make sure you aren’t making so many sacrifices that you can’t keep it up.
Well, we are all about snowflaking. We throw every little piece of extra income at our debt right now, and we can’t wait to get rid of it!
Greg@ClubThrifty recently posted..Why Being Out of Style is Cool
I know you’ll have your debt clear in no time. You 2 seem really good at stretching your money and your blog is bound to start making a lot of money.
I’ve just started using the snow flaking method when it comes to earning extra income. I’ve got a bit of income coming in, and as sad as it is to see it go, I immediately put it all towards my student loans. I hate doing it, but I know it’ll be for the best.
Jordann recently posted..How to Alienate Voters in America
It would be tough to accept at first. When doing that extra work it would be tempting to reward yourself somehow. Congrats on picking up that staff writing gig. That’s sure to help with your debt payments.
I plan to start snowflaking by making hats and such to sell.
Interesting idea. That shows how you can put your creativity to work and do something that you probably enjoy doing anyway.
My snowflaking consists of: 1) the cash I get back from Mr. Rebates or Ebates, 2) money from online surveys, and 3) selling DVDs/CDs/books on Half.com. Since all you have to do is list by UPC code, I find it to be much quicker to list than Ebay.
Just listing stuff by UPC would really simplify the process. I really don’t like doing the full item description on sites like ebay. Good luck with those strategies FF. Hopefully your blog builds up into another snowflake source.
I have to admit, I probably wouldn’t use the money towards debt, but go for the Amazon gift card and apply it towards the Kindle Fire that I plan on buying entirely with gift card money. But the Fire is largely for ebook testing purposes to help me make more money to apply towards paying off debt.
That doesn’t sound like a bad strategy since you would be using it to make more money. Sometimes you have to spend money to make money.
I have never heard of this idea before to pay off debt. But it makes sense. Someone who has a some skills in a particular niche, I think, he can make a lot of money than others.
Parvinder recently posted..5 Money Mistakes That Make You Poor
And if all that income is put towards your debt, it can have a serious impact. It does take some willpower to not just blow that money.