Feb 7th, 2008
Snowflaking a Savings Snowball
There’s been some talk in the personal finance blogosphere recently about snowflaking, which is a technique used widely to help build up debt snowballs, a debt payoff technique discussed in a previous post. The idea behind snowflaking is to put any amount of “extra” money you come into on top of your snowball to make it bigger and bigger. Sell something on eBay? Work a couple hours of overtime? Put those dollars–your snowflakes—toward your debt payment–your snowball.
Since I don’t have any non-mortgage debt at this point, I don’t have a debt snowball to build up. I do, however, have a savings snowball that I’m trying to build up to purchase a new MacBook. So every little bit of money I pick up in addition to my usual salary goes immediately into that fund. Sunday’s contributions? A $20 Cashback Bonus from Discover Card and $15.94 from recycling (how I end up with $15.94 for five cents per can is beyond me). No, a bit under $36 is not going to get me my MacBook, but it will get me $35.94 closer to it, and every cent closer makes a difference.
I’m not sure what other snowflakes may be coming my way, but they’ll immediately go onto my MacBook savings snowball. Hopefully, it’ll build up the momentum I need to get that computer quickly!
Smart move, over the period of a year, $36 every week or 2 will really add up. I like the idea of selling stuff (junk) on ebay to build up your snowball. I did this alot when I was in CC debt up to my eyeballs. Nice blog you have here, I just added you to my reader.
That’s a great point. I used to think it was pointless to save if it was only a few dollars here and there, but I’ve really gotten the travel bug and know I need a ton more money for that. I’ve started putting little amounts I earn or get back here and there (I’ve even deposited cash I’ve earned from babysitting neighbors), and it’s added up more quickly than I could have expected. Snowflaking is definitely a concept that can help saving up or putting down debt. I hope that idea spreads, and people realize every little bit really does count!
Kyle,
Thanks. I can use all the subscribers I can get!
EmilyStarbuck,
Thanks for the kind words. Yes, I sometimes like to travel too (can’t as much as I did before); the costs add up, so we need to have a way to get the savings to add up beforehand!
[...] discussed snowflaking in this venue before; it’s basically taking any unexpected or unaccounted for [...]
[...] been quite awhile since I discussed snowflaking, the art of building up lots of small amounts of money into one large amount, here in this blog, largely because I haven’t been doing well at [...]