Financial Zip

If you have never heard of the concept of snowflaking it parades under different names that people use David Bach has DOLP (dead on last payment), snowball payment, accelerator margin. There are lots of names for it, but they are essentially the same strategy.

I looked into the name because up until about 3 weeks ago I had never heard of the name although I knew the concept. The concept is essentially taking your debts putting them in a certain order (highest to lowest min payment) or (highest to lowest interest payment.) Then taking an extra amount per month and adding that to your first credit card payment. As you pay down your credit card taking that payment and adding it on to the next payment and so on and so forth until your debt is paid off.

This is a very effective strategy to use. Then a few days ago I was reading about someone making micro payments to payoff credit cards. That was really intriguing concept to me a using a micro payment to payoff your credit cards. It is a small payment you make to your credit card once every week or 2 weeks to continually lower the balance on your credit card bill. $5, $10 or what ever you scrounge up, whether you find it in your couch or the seat of your car. It is just those little payments that add up over time.

So I got to thinking what if I combined the 2 concepts into a powerful debt reduction strategy which is what I am going to do, and here is how it works.

Find that snowflake money or your extra money you can focus on to pay down that first debt. So if you are able to come up with a $100 extra month and your minimum payment on your first priority card is $50 then you are focusing $150 on that debt.

Then during the month find your micropayment that you can either spread around to different credit cards or you can pay it to your priority card in addition to your snowflake money. The power that exists in this concept is that of reducing the interest being charged on the balance. You will be paying essentially less interest because your balance is being lowered dramatically through you snowflake payment and then adding the micro payments on top of the that.




Find Your Micropayment

The way that I am getting a micropayment is I find stuff to sell. If you don’t have stuff lying around your house that you can get rid of, look harder. I have been selling shirts I have had on eBay, a couple other odds and ends on craigslist to give me a little more money during the month. I also take maybe $5 to $10 out of my checking account and make a micropayment that way.

If you spend a lot on stuff you don’t need eating out, cigarettes, other wasteful stuff there is your money to get yourself out of debt. The fact is if you really want to get out of debt it is a matter of wanting to and then applying yourself to doing that.




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