Debt Snowball vs. Debt Snowflaking

November 6, 2013

debt snowballIf you are serious about getting rid of your debt, you need to have a plan. There are numerous approaches to paying off debt, but two of the most common are the debt snowball and the debt snowflake methods.

Think about the merits of each approach, and determine whether one or the other might work well for you.

Debt Snowball

Many people know about the debt snowball method. This is the method advocated by Dave Ramsey.

The approach is fairly basic:

  1. Order each of your debts, from smallest balance to largest balance, listing the minimum payment amount for each.
  2. Look at your monthly budget. Figure out how much extra money you can afford to use as a debt reduction payment each month.
  3. Take that extra money and apply it to your smallest balance on top of the minimum. Keep paying your other minimums as normal.
  4. Once your smallest loan is paid off, take all of the money were using to make a monthly payment and add it to the minimum payment on the next loan on your list.
  5. Repeat with subsequent loans until everything is paid off.

As you can see, as you move forward with this process, your debt pay-down amount increases each month, and the rate of your pay-off accelerates later on. It’s like a snowball getting bigger as it’s rolling down a hill! With this method, you set up a budget, and stick with it, paying the same amount each month until your debt is gone.

Debt Snowflaking

The idea behind debt snowflaking is a little different. As with the debt snowball, you order your debts according to how you want to pay them off. You also make the minimum payment on all your accounts. However, instead of having a set amount extra that you pay each month, you take all the small savings you can in the month, and apply them toward your debt.

You can go about this in one of two ways:

  1. Each time you save a small amount of money, you immediately log into your account online and make a payment on your debt.
  2. You keep track of the small amounts throughout the month, and then make one payment – on top of your minimum – at the end of the billing cycle.

Either way works fine. The idea is to look for ways to save a small amount of money and have it add up to a bigger debt payment amount. So, if you brown bag it for three days one week, instead of eating out, you take the difference and apply it toward your debt. If you cancel a subscription, you take the savings and apply it to your debt.

For many people, it becomes a game. It can be fun to see how much you can save each month for your debt pay-down amount. Every little bit helps.

Combine the Two Methods

One way to be super-effective in your debt pay-down efforts is to combine these two methods. First, make a basic debt snowball plan. If you can only put $100 extra toward debt reduction each month, plan on that. It becomes part of your regular effort to pay down debt. However, don’t stop there.

Once you have your debt snowball underway, boost your efforts by snowflaking. See how much more you can reduce your debt each month by finding little ways to save and then adding that amount on top of your debt snowball payment. You’ll pay down your debt faster by combining these two very effective debt reduction techniques.

How are you paying off your debt? Leave a comment!

This article was originally published October 22nd, 2012.


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Miranda writes about personal finance almost every day. An experienced freelance writer, she's covered your money online and in print from every angle and is always looking for new ones.

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2 Responses to Debt Snowball vs. Debt Snowflaking

  • Matthias

    Wouldn’t you focus on the loans that cost you the most interest and pay those off?

    For instance you’d may:

    19.5% APR MasterCard


    4.5% APR Line Of Credit


    3.0% APR mortgage


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