What Is the Debt Snowflake Method?

Quick Answer

The debt snowflake method is a repayment strategy that involves paying down debt using small savings you find in your everyday life. While each "snowflake" may not have a significant impact on your debt, they can accumulate over time, turning into big savings.

Macro of snowflakes in snowdrift over blue background at snowy night

The debt snowflake method is a debt payoff strategy that you can use on its own or in conjunction with other approaches to tackle your debt.

The debt snowflake method may not appear to make a difference in the short term, but over time, it can help you save money and allow you to pay off debt faster.

What Is the Debt Snowflake Strategy?

When paying down debt, it's common for people to put extra money toward their monthly payments—usually a fixed amount or whatever cash is left over at the end of the month.

With the debt snowflake approach, however, you'll take small savings and income that you earn on a day-to-day basis and put that money toward your debts.

Like real snowflakes, each debt snowflake may not appear to make a difference—and if you don't use it wisely, it can disappear fast. But over time, repeated debt snowflakes, similar to a snowstorm, can have a significant impact on your debt payoff plan.

Due to the nature of the debt snowflake strategy, it can be used on its own or as a supplement to other debt payoff approaches, including the debt snowball and debt avalanche methods. You can use the debt snowflake method with any type of debt, but it's best to use it for high-interest debts.

How Does Debt Snowflake Work to Pay Off Debt?

While effective, the debt snowflake method takes a little more diligence than other debt payoff strategies because it requires you to watch for savings opportunities and to use those savings before you spend them.

Potential debt snowflakes may include:

  • Money you save at the grocery store by using coupons
  • Cash back you earn from your credit card spending
  • Gas savings you get from carpooling with a loved one or coworker
  • Unexpected checks and other payments
  • Proceeds from a yard sale
  • Payments for odd jobs, such as mowing lawns or babysitting
  • Found money, such as coins between the couch cushions or cash left in a jacket pocket
  • Savings from a meal made and eaten at home rather than at a restaurant
  • Savings from changing your thermostat higher or lower, depending on the season
  • Opting for generic brands rather than name brands at the grocery store
  • Getting books from the library rather than buying them

To maximize your savings and pay off debt faster, consider using the debt snowflake approach along with the debt snowball or debt avalanche method. Here's a quick summary of how they work.

Debt Snowball Method

The debt snowball approach involves making the minimum payment on all of your loans and credit cards, then taking any extra money you can put toward your debt each month and adding it to the payment on your lowest balance.

Once that balance is paid off, you'll take the minimum and extra payment you were putting toward it every month and add it to the minimum payment on your debt with the next-lowest balance. Keep doing this until all of your debts are paid in full.

Debt Avalanche Method

The debt avalanche method is the same as the debt snowball method in every way but one: Instead of targeting the lowest balances first, you'll focus on the debts with the highest interest rates.

The debt avalanche method is designed to maximize your interest savings, while the debt snowball method can give you wins early on as you pay off small debts, which can help keep you motivated.

Pros and Cons of the Debt Snowflake Method

As with any approach to paying down debt, the debt snowflake approach has both benefits and drawbacks to consider. Here's what to keep in mind before you get started.

Pros of the Debt Snowflake Method

  • Can work on a tight budget: Even if you can't set aside a specific amount to put toward a debt every month, you can still utilize everyday savings to achieve your goals.
  • Adds flexibility to your approach: You get to decide how much time and energy you want to dedicate to the strategy. If tracking every bit of savings you get sounds too tedious for you, you can determine which areas to focus on.
  • Can help you make better money decisions: Looking for everyday savings can help you be more mindful about how you spend your money and prevent you from spending money needlessly.

Cons of the Debt Snowflake Method

  • Limited impact in the short term: If you have trouble staying motivated on your debt journey, the small short-term impact of using the debt snowflake approach on its own can make it difficult to maintain discipline.
  • Difficult to see the long-term impact: With other debt payoff strategies, including the snowball and avalanche methods, there are calculators you can use to get an idea of how much money you'll save and how long it'll take you to pay off your debt. With the snowflake approach, however, there's no way to really see the long-term effect because your everyday savings can vary from month to month.
  • Requires organization and discipline: The debt snowflake method requires a lot more work than other debt payoff approaches. If you struggle to stay organized and disciplined, you may be left feeling discouraged.

Prioritize Your Credit as You Pay Off Debt

Regardless of how you decide to tackle your debt, it's important to prioritize your credit score in the process. With Experian's free credit monitoring service, you can get access to your FICO® Score and Experian credit report. With these resources, you can pinpoint areas to focus on during your debt payoff journey and also track your progress toward a higher credit score.

As you build and maintain a good credit history, you'll have a better chance of getting credit with favorable terms in the future.