How to Use the Snowflake Debt Approach in Three Steps

Money trouble — it’s a problem that just won’t go away. 

Millions of Americans find themselves in debt, with bills piling up and spilling over. The New York Fed reports Americans hitting an astounding $13 trillion overall debt just last year. Student loan debt alone has landed itself in the trillions, making up 7.5% of the United States’ GDP. 

These numbers keep climbing, and Americans are becoming increasingly frustrated when it comes to paying off their soaring debt. Financial institutions all over the world have recommended multiple repayment schemes, but here is one that has recently stepped into the spotlight: The snowflake debt approach.

What is the snowflake debt approach?

Here’s a quick overview: The snowflake debt approach concentrates on tiny amounts at a time. Step by step, dollar by dollar, the snowflake debt approach is a long-term resolution to expedite debt repayment and even reduce the amount paid when interest is considered. This is, of course, by no means declaring it a better strategy than others – everyone has their own method for repaying their loans – but if you don’t mind going the extra mile to save, then this might be the method that saves you from a life of debt. 

How to use it?

There are three main moves to the snowflake debt approach: saving, repaying, and tracking. Sounds simple? It is. Here are the three steps you should follow:

Part 1: Saving

Saving is often made to seem like a more complex concept that it should be. What does it necessitate? You can start by doing away with the luxuries of life. 

  1. Cable television, for instance, can be one of the first to go. No more subscriptions to late night movies on Netflix means more money goes toward repaying that debt.
  2. Cut off any media that might convince you to spend. If you are a compulsive buyer, stay away from online shops that tempt you into buying more. Amazon is scarily competent at fooling consumers into thinking they should purchase all those attractive “suggested items,” but all that adds up to is more money to them and less money to repaying your debt.
  3. Transport is another quick way to save. Why take an Uber when you can take your bike? And how many places can you walk to instead of driving? Pick the budget alternative, even if it isn’t the most convenient, and you will thank yourself when your daily expenses start dropping.
  4. Cook for yourself. Can’t cook? Now is an excellent time to learn. Google a couple of inexpensive, easy-to-make recipes and try them out at home. Make food in generous quantities because shopping in bulk is always more worth it. Grocery shopping is also much cheaper than buying takeout or eating out at restaurants – and once you learn how to use coupons and vouchers to save on groceries, it’s game over for your debt.
  5. Part-time jobs are quick, sure-fire methods to earn cash. Online surveys are all the rage now, paying you to submit your opinion. Perhaps you could babysit someone’s child for a day, or walk someone’s dog. These short, simple jobs have low opportunity cost while offering payment (alright, the pay is sometimes low, but cash is still cash).


The snowflake debt approach is all about getting little bits of money here and there and stockpiling them until it makes a significant dent in your debt. You can find similar methods online such as interest rate negotiation, cashing out life insurance, etc. This process won’t happen overnight, and it won’t happen in a month. In other words, debt reduction is not a sprint, it’s a marathon.

Part 2: Repaying

With the extra money in your bank, now what? It’s time for Step 2, where you take all that cash and immediately redirect it to repaying your loans. Don’t let the money sit around in your wallet, your house, or your bank account, waiting to be spent. It breeds temptation that will bring you to ruin, so get the cash out of the way, and it’ll be a smooth sailing process onwards.



Part 3: Tracking

Sounds difficult? Don’t be fooled. All this involves is watching where your money is going. Make a spreadsheet to track your expenses and savings, or even jot it down on a page in your diary. It reminds you of how much you have managed to pay off and acts as a burst of encouragement every time you lose hope. Just like how people who diet are advised to keep a food journal, people who save should keep an expenses journal. Do whatever is best to keep yourself motivated and driven to continue on this path of snowflake debt repayment. 


Finance professors John R. Salter and Ron Rhoades postulate that Americans are increasingly getting used to debt. “The idea of saving… has diminished,” Salter said, highlighting how people have a higher comfort level with debt in all forms. This mindset could prove detrimental – the way people have become more at ease with the concept of debt could make them forget the importance of being able to pay it off. As interest piles up, the real value of the debt increases; if you want to repay your debt fully, it needs to start today. Don’t live your life in debt. The snowflake debt approach is just one of many methods that can help you deal with your debt and clear it from your name as soon as possible.

Published by
Chad Van Horn

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