23
May
2011

The term debt snowflake has gained substantial popularity in the recent years. Debt snowflake is essentially a debt reduction process, and it refers to making additional small payments towards your debt.

Debt snowflake can be seen as a part of debt snowball process. With debt snowflake, you make payments as per a fixed strategy (usually trying to clear the smallest debt first and then concentrating on the next smallest debt and so on). But the trick is in making some extra payments whenever possible to accelerate your journey towards a debt free life.

Let’s consider a few examples. You might skip eating out once in a couple of weeks, and use that money to make debt payments. Have you got some birthday money? Think of using a part of it towards your debt. If you have received a bonus for your work, then do not hesitate to contribute that money for debt reduction.

You would find numerous opportunities to pay a few extra bucks towards your debt. These tiny little payments may seem insignificant like snowflakes, but in long run these snowflakes can be effective, addictive, and even fun. Note that use of debt reduction calculators can be really helpful if you are following debt snowflake method.

Can debt snowflake be considered as an alternative to debt relief programs? The answer is no. Debt snowflake is basically for people who are having difficulty in managing their money, but are not in serious financial trouble. On the other hand, if your monetary situation is acute then debt relief programs are your only option. You need to understand that debt reduction strategies like debt snowflake can help you to manage your finances in a better way, but that might not be enough to rescue you from a crisis situation. You might need reduction in principal amount or interest rate or both. Many debtors also benefit from a better repayment plan, which is an option only with debt relief programs.

In light of the above points, it can be safely said that debt snowflake is not an alternative to debt relief programs.

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