Snowflaking, as I define it, is a process where little bits of "whatever" can accumulate to make a great impact. Like how snowflakes (little) make a snowball (bigger), which can get even bigger still.
I've seen this term used in talking about debt reduction: little amounts of surplus money go towards paying a bill, which causes it to be repaid sooner.
Sears Card = 600 w/minimum payment = 50, payoff =12 months
Car note = 2,000 w/min payment = 200, payoff =12 months
Visa = 1600 w/minimum payment = 100, payoff =16 months
But if you could squeeze out an extra 25/month, you could repay the first one in 3 months and do this:
Sears = 500-75 for 8 months = 0
Car Note = 2000-200 for 8 months = 400
Visa = 1600-100 for 8 months = 800
and in month 9
Car note = 400-275 (the 75 from Sears)=175
Visa = 800-200=600
Car Note =175-175
Visa = 600-200-100 (from the car note) = 300
and in month 11
Visa = 300-300 = 0. So you get done 5 months early.
In cases where the debt doesn't accumulate interest, the math is very straighforward: whittle away at the smallest first and when it's done use the freed up $$ from the first debt to take chunks from the next one.
But often, debts aren't that simple. In this case the interest and the principal has to be factored in, and it may not be the best strategy to go from smallest-biggest or even highest interest first. I guess an easy way to ballpark it is to not snowflake the low balance, no interest debts and attack the smaller of the interest-bearing ones first.
I actually use a calculator to figure this out, because the difference in payment order can add or delete several months to the repayment time. This is partially because of the interest, but also because my snowflake amount may vary each month.
Here's the link to the calculator:
And I got the link from this amazing blog:
It's your money. He's got other cool stuff too.
If I were better at computer programming (which is to say, if I could do it at all) I would write a program that would just do it for you. Maybe someone out there with higher brain wattage can tackle this job?