I read a LOT of articles on personal finance and personal development, but for those of you who don’t, I thought I’d share “snowflaking” with you since it ties so well into what this blog is all about. All this time, I’ve been trying to tell you just one less, or get a roommate, or optimize your lifestyle, but without a clear goal in mind! Well, since roughly 75% of Canadians are still in debt, here’s the goal: Get to Zero, ASAP.
I’m in debt too, and snowflaking that away has been one of my main priorities. Simply put, snowflaking is what personal finance nerds call it when you make small, one-time payments towards your debt to kill it off. Came in under budget on your groceries by $20? Snowflake it in! Made $300 selling old crap at your garage sale? Sprinkle that on your highest-interest credit card! Decided you didn’t need a $5 latte today before work? That goes in too! Obviously, none of this works if you’re still accumulating massive amounts of debt, but here’s a strategy for that as well.
Let’s say you owe $6,000 on a 20% credit card and $4,000 on a 15% credit card. Go to your bank and negotiate the lowest interest you can on a credit line or card, then transfer all your debt to that account! (I’m at 7.69%, which isn’t great, but here’s another low-interest debt strategy you may not have thought of.) With your previous numbers, you’d be paying $1,800/year and making no dent in your debt, but now that you’ve negotiated a better interest on your credit line, you’re probably closer to 9%, HALVING your debt payments to $900/year. That’s just an example, but they’re realistic numbers. You might even be able to do better! Another snowflaking opportunity? Hell, yeah! Whatever your numbers, the sum of your debt is now a very clear Debt Number to attack. You’re no longer allowed to rack up a balance on any of your credit cards, and you are now 100% devoted to snowflaking the fuck out of your credit line until that number is Zero! Simple, right?
Every $100 you knock off your Debt Number is a cause for celebration. I still think of each $100 as a Happiness Unit, and you should game this as much as possible. Every time you save or earn a small slice of cash, snowflake it immediately towards your debt. It may be easier to place it into a savings account first, then transfer it all into your debt at the end of the month if you think that’d be better. This can be a great psychological motivator as well! Try and beat your high score every month!
Think of every snowflake as a small win. Do this often enough that it becomes automatic. Squirrel away your money before you get tempted to spend it. Let’s create a goddamn blizzard.