Debt Snowball- paying off debt by making the maximum payment possible on your highest interest or balance debt (depends on your preference for paying it off) while paying the minimums on all other debt. As each debt gets paid off you put the same amount of money toward the next highest debt.
Snowflaking- putting little bits of money toward your debt as you get it.
Now, I never really understood snowflaking. I mean, do I save this money and use it at the end of the month? Do I write a check each time I have some extra cash? Do I have a garage sale? The answer is basically YES.
Snowflaking can take many different forms. I had heard of the concept before, but it wasn't until I read a discussion board post on it that I really understood.
Take me for instance. Today, I had to go get a few things at the grocery store. I really wanted to go to McDonald's and get a chicken nugget happy meal. However, the post was still fresh in my mind so I decided instead, I would go home, eat what was there and put $5 for the happy meal that I didn't buy into my credit card account. So that is what I did. (My bank has you transfer money into a seperate part of your online account then they take the money out and pay the credit card for you.)
Some other ideas I read online included saving change and adding that to your debt. Now, I do save my change, but I usually use it in the vending machine at work. (I know I should know better) Well, I am going to start taking whatever I have at the end of the month to the bank and putting that amount toward my credit card debt.
The ideas you can come up with for snowflaking are endless. I am sure my readers have some great ideas. Please add your ideas to the comment section!!
Tuesday, April 22, 2008
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