Snowflaking

Before I go on: Today is the 8th anniversary of the 9/11 terrorist attacks on our country. Please take a moment to reflect and remember those who perished.

After seeing a lot of personal finance blogs (such as Beachgirl’s Budget Blog) referencing something called “snowflaking,” I decided it was finally time to find out what the heck these folks are talking about.

Basically, snowflaking is finding ways to make extra money to be put toward debt, such as selling stuff on eBay, taking paid surveys, rebates, interest, saving loose change, doing odd jobs or freelancing (that would be me). The idea is to apply all of this extra money to your debt. But you can’t always apply it right away to your car loan, credit card or student loan debt — check the terms of your agreement to see if you will be penalized for pre-payment with fees or even an increase in your interest rates.

This is different than a “debt snowball,” where a set amount of money is put toward paying down debt each month in order to pay it off quickly.

My approach is two-pronged: I combine the ideas of snowflaking and debt snowball and apply them in different ways. While I put a fixed amount each month toward our credit card debt, any extra cash I make on the side from freelancing, selling or loose change is put into our savings/emergency fund.

While I could put the “snowflaking” money toward our debt, I’m more comfortable adding to our savings and also putting a big chunk of $$$ toward our CC bills each month to knock out those debts. In two weeks, we’ll have paid off Mr. Saver’s two high-interest credit cards, leaving my two low-interest cards (one with a 1.99% balance transfer good through February). Under the current plan, we’re on track to pay those off by February, so I’m happy with the way things are working out.

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