6 Ways to Gather Snow Flakes in Summer

As Americans become increasingly serious about living in a debt free environment, the concepts of snowballing and snowflaking continue to gain popularity. In fact, people who have accumulated and carried substantial consumer debt for decades have experienced savings growth and debt elimination by practicing these simple techniques.

Understanding Snowballing

Snowballing is counterintuitive at first glance. Instead of prioritizing individual debts according to the largest balance or highest interest rate, the snowball approach targets the smallest debt or monthly payment and then attacks it with a vengeance. Paying down smaller debts will show tangible results almost immediately. 

When the smallest debt is eliminated, the money that had been applied to it is now added to the monthly payment for next smallest debt. This process continues until the largest debt is addressed. By that time, the monthly snowball has grown so large that the impact is meaningful and immediate.

Snowflakes

Snowflakes provide the substance that allows a snowball to grow and prosper. For example, if a debt has a monthly minimum payment of $200, choosing not to purchase a premium latte on a particular day provides a $3.75 snowflake that can submitted in addition to the minimum payment. 

Maintaining a disciplined approach to accumulating snowflakes and faithfully applying them to the monthly debt is critical to the success of the program. Detailed record keeping for even the smallest unexpected income can make a significant difference in the overall time required to eliminate the debt. 

Payments in excess of the minimum should always be applied directly to the principal as this will save substantially in total loan costs. It is important to call the lender and insist that any additional money added to the payment should be used to reduce the principal on the loan. Lenders must agree to principal reduction unless it is specifically prohibited by the loan agreement.

With the proper commitment and dedication, at some point all debts will be repaid. For those who are debt free or accumulating a “rainy day” fund, snowflakes are great way to build an incremental nest egg. Whether saving for something specific or to enhance a lifestyle, snowflake savings offer a sense of fulfillment in knowing the money was accumulated through perseverance and ingenuity.

Summer Snowflakes

Although the summer season provides a great opportunity to enjoy a well-deserved vacation, it can prove to be a difficult time to maintain budgets, especially with the kids out of school. Here are a few ways to continue to collect snowflakes during the heat of the summer and help absorb some of those added costs.

• Use a Programmable Thermostat: Many homes built since 2000 are equipped with a programmable thermostat. Unfortunately, most homeowners were never shown how to operate these devices. Programmable thermostats can save up to 10% on cooling bills in the summer. Locate the manual and learn how simple it is to instantly start saving money.
• Raise the Temperature one degree: A 1-degree change in the thermostat setting can save 4% on the cooling portion of the utility bill. Thermostats should be set between 78 and 80 degrees in the summer for maximum savings.
• Sell Your Stuff: What’s better than a summer yard sale for collecting snowflakes? The cash you get for each item you sell can be added to your snowball. 
• Look for Deals: Every time you get 10% off or a reduced rate on a hotel or any other discount, take the money you saved and snow flake it.  
• Treat the Kids at Home: Ice cream is much cheaper by the half gallon than by the cone. Soft Drinks like Kool Aid go a long way in making them smile as well. Put the lawn sprinkler on for them to play in the yard. Take them for a walk or bike ride. Kids love all of these low-cost activities.
• Find Cheap Gas Online: A number of websites offer detailed price information on gas stations throughout the country. Two of the most popular are gasprices.mapquest.com and autos.msn.com. Advanced trip planning can provide significant savings on gas by fueling at those stations with the lowest prices in the area.

It can Snow all Year Round

The summer season presents limitless opportunities to relax, enjoy and rejuvenate. It can also prove to be a great opportunity to keep collecting snowflakes that will add to the growing savings or debt reduction snowball.