Q on snowflaking and varied minimums

iVillage Member
Registered: 12-12-2004
Q on snowflaking and varied minimums
6
Sun, 01-08-2006 - 11:16pm
HI, All. Q on snowflake. Do we just send in monthly snowflakes of any amounts we paid extra (i.e., roundups, or extra $50.00)? Or, do we send in the monthly balances on each debt owed (i.e., medical bills, doc, cc, etc), how much we NOW owe only based on the snowflakes? How on earth can I keep track of snowflaked amounts when the amount owed sometimes varies? For example, if the Discover card is $86.00 for the month of Jan, and I snowflaked $400 AND paid $100, (I did), what if the next bill is $96.00 and I snowflaked less? Sometimes my snowflake amts vary depending on what I have extra each month and to where it is going. For example, I snowflake about $50 extra per month to Cingular, but now, I have a positive balance, so it is pointless to keep sending in money that I dont owe, right? What about snowflakes to mortgage? Does that go in a separate column? Dont see anyone doing it. Just curious. Whiz.
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Mon, 01-09-2006 - 12:46am

I calculate my snowflakes every month.

All my best,
Danni

Avatar for endomagazine
iVillage Member
Registered: 11-09-2004
Mon, 01-09-2006 - 10:45am

Hello,

I'm not sure where you're tracking your snowflaking, but I have my credit cards set to automatically withdraw the minimum payment each month. So any extra payment I send to the credit cards is noted in my check register as "Discover Extra Payment", vs "Discover Minimum Payment". Normally, I'll pick just *1* debt that I'm snowflaking on, so the rest are all minimum payments. Your minimum payment will normally go down over time, since your minimum normally pays off the debt very very slowly.

For example:

Discover Minimum Payment Jan: $100
Discover Minimum Payment Feb: $98 + add $2 to snowflake debt payment
Discover Minimum Payment Mar: $96 + add $2 + $2 to snowflake debt payment

If the minimum goes up, you won't be getting any snowflaking done from that minimum that month. My minimums go up when I transfer balances, etc.

When I have my *other* debt paid off, I will be snowflaking to my mortgage.

Here's how I figure out which debt to pay off:

Total Balance / Current Minimum Payment = # of Payments to Pay Off

I take the one with the lowest # of payments to pay off, and snowflake to that account. My mortgage is going to take 28 years to pay off, so I always know that one will be the *last* to get the snowflakes. Sometimes if I get a large lump sum, (tax refund) I'll send 10% of it to the mortgage as an extra principal payment, using the rest for my current snowflake target.

So, if I had three debts with the following stats (not my real data):

$20,000 Balance / $200 Minimum Payment = 100 Payments
$15,000 Balance / $300 Minimum Payment = 50 Payments
$2000 Balance / $50 Minimum Payment = 40 Payments

I would choose the $2000 balance to send my snowflakes. Sometimes the one with the lowest # of payments is the debt that has the highest percentage minimum payment. One of my credit cards asks for a 3% minimum payment, and another one asks for a 1% minimum payment.

Sincerely,
Lindsey Schocke

Got Dot? Why Not? It Pays!
http://www.website.ws/runsamok/show

Sincerely,
Lindsey Schocke

Geeks on Tap: Mission Accomplished

iVillage Member
Registered: 12-12-2004
Tue, 01-10-2006 - 2:33am
Hi, Danni, thanks for clarification. You are right--sometimes, I cannot "technically" report it until I get the next statement, so then, I would have to report it for the next month, right? I like the idea of a dry eraser board. It would seem to make things easier in black and white. Whiz.
iVillage Member
Registered: 12-12-2004
Tue, 01-10-2006 - 2:37am
Hi, LS. Thanks for making this simple. What I am doing is rounding up payments, THEN snowflaking. So, if the gas bill is $166.08, I round it up to $170, and then send an extra $25.00. But then, the snowflake, "technically" would be about $29.00. I just find it easier to round up, and then send an extra amount if I can. I usually dont write anything on the check, though. Your example is something I want to "borrow", so I can keep track of this better. Thanks! Whiz.
iVillage Member
Registered: 05-09-2002
Tue, 01-10-2006 - 4:37pm

Hi,
Your questions were great ones - now I have one too although this may be something everyone else already knows. I just started snowflaking this week. I was only planning to chose one bill - the highest with the highest interest - to send extra payments to. I wasn't planning to send anything extra on monthly bills such as cell or utilities because those bills have no interest. For someone in my position with plenty of interest bills to chose from, I assume this is the best idea? Or if not, I am open to any suggestions! Thank you!

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Tue, 01-10-2006 - 6:58pm

That is how most people do it and the most effective way to snowflake - in general (the rounding up is usually just a few cents so you can still do it with others & with the min. going down but you don't ADD to anything except your target bill).


For example Month #1:


Credit Card #1 is your highest interest targeted card with a minimum of $100 - you send in $110 (the $10 is your snowflake).


Credit Card #2 minimum is $100 but lower interest rate so you just send in the $100 (no snowflake)


Credit Card #3 minimum is $50 lower interest rate so that is all you send in $50 (no snowflake)


Moth #2


Credit Card #1 has a minimum due of $98 dollars now - you send in $105 (The $100 you normally sent in plus $5 extra - your snowflake is $7 that month).


Credit Card #2 has the minimum of $98 now due to min. usually go down each month - you send in your $100 same as last month (so no extra from anywhere, just what you sent it previous since you have now locked your min. payments as to what you started with.