I am fascinated by snowflakes.
No, I’m not talking about snow and blizzards. (Although I do love snow!) I’m referring to financial snowflakes.
I first heard about snowflake’s from PaidTwice’s snowflake primer here. But I’ll do my best to explain it as well.
Snowflaking is a spin on the popular snowballing method, where you take any extra income each month and pay down debt. (I’m simplifying things here, because snowballing doesn’t really apply to us.)
The principle for snowflaking is simple: Each snowball is made of snowflakes, or small amounts of extra cash.
But small amounts of money can add up quickly. Take any money you can find, no matter how small, and apply it to debt. Saved $2 by buying something on sale? Snowflake the savings, and add it to your debt payment. Found a quarter on the ground? Snowflake it.
This would be great for us, if we used cash.
We don’t have much of a cash system in our house. We budget x dollars for food, gas, ect. Everything goes on the credit card, we track how much is spent, and the card gets paid off each month. When the budgeted money is gone, we put the credit cards away.
But now that we’ve been working with a budget for a few months, something strange and wonderful has been happening. Each month, we spend a bit less. There’s always a few dollars leftover in each budget. I’ve been rolling that money into the next month’s budget, but it’s starting to add up.
Today, I vow to USE my snowflakes to better our financial picture! I’m thinking we should send 75% to the mortgage, 25% into student loans. (Check out my goals for reasoning.)
We’ll sit down and finish our budget tonight. Check back tomorrow and see how many snowflakes we found!
Just getting started 