None of us like to have a large amount of debt hanging over our heads. It makes us feel nervous, and adds to our fears about the future. It’s no surprise, then, that most people want to pay off their debt as soon as possible, and are waiting for the day when they will get a large windfall to make that happen. This is called a debt snowball. It’s a large amount of money that accumulates over years, or that you get at one time, which is used to pay off a debt.
The problem with debt snowballing is that most people don’t win the lottery or inherit a large amount of money. Saving up large amounts is difficult, too, in today’s economy. While you are saving up, your debt is also accumulating, and in some cases, skyrocketing.
Then there is always the problem of getting your spouse to agree that a large amount of money should be used to pay off a debt, when so many other things look so much more attractive to spend it on.
There is another kind of debt payment system that can solve this problem, called debt snowflaking. What is it, and how does it work?
Small Extra Payments
In debt snowflaking, You use small extra payments, and apply them to your outstanding debt. The first step before you do this is to write down all of your debts, from the smallest amount to the greatest. Then plan how to accumulate small amounts of money that can be applied to the debt in a frequent payment program, over and above the minimum payment due on the debt. Be sure to pay at least the minimum on every debt.
The extra money may come from weekend jobs, selling something online, birthday money, or any other source. It could also be a small amount taken out each week from a paycheck. For this payment system to be really effective, it should be deliberate and intentional. Your goal is to make small extra payments frequently, starting with your smallest debt first. When that debt is paid off, you continue up the ladder till you get to your largest debt.
Benefits Of Snowflaking
Obviously, snowflaking is easier than snowballing for many people to do. It also has the positive result of making you feel successful about paying off a small debt. Many people need that positive reinforcement to keep going until all their debt is paid off.
The shock of throwing an entire large amount of money down the debt tube is avoided. So you probably won’t have to fight with your spouse about it!
Snowflaking can be combined with other forms of debt payment, such as snowballing and debt stacking, when the opportunity becomes available.
Don’t wait for a large windfall to start paying off your debt. Start where you are now, and begin paying off that debt in small extra increments. You’ll be surprised at how effective it can be, and how good it feels.