Updated on 05.01.10

Snowflaking and Goals

Trent Hamm

One of my favorite personal finance tactics is “snowflaking.” For those unaware, “snowflaking” refers to the idea that if you make little frugal steps throughout the month, you simply add the amount you saved with that method and include the total as an extra payment at the end of the month. So, for example, if you used coupons to save $5 on your normal purchases, you would then add $5 to an extra debt payment at the end of the month. This knocks $5 off of the total amount you owe, reducing your interest owed in future months and getting rid of the total debt that much faster.

“Snowflaking” is almost always used in a debt-related context – the name itself comes from the popular “debt snowball” – but I’ve actually found that snowflaking is incredibly powerful for almost any goal in life. In fact, I use snowflaking all the time in my own life for bigger goals.

Here are some examples for how I use snowflaking for some of my personal goals.

Bigger savings goals The biggest savings goal that Sarah and I have right now is for our next home. We intend to buy a piece of land in the country with some wooded area on it (expensive) and then build a house to spec on that land (even more expensive), along with a barn (whew!).

That’s an expensive goal.

So I keep that big goal in my mind as often as I can. I have a picture of a home with a barn and some woods in the back that I look at all the time to keep myself reminded of it. When I make a choice to save a few bucks – buying something in bulk or some similar little effect – I log onto my online banking and transfer that amount to a separate savings account, never to be touched until we’re ready.

With every little choice, that account grows and we move a little closer to our dreams.

Motivational goals I’d like to get a better pair of walking shoes. Instead of just going out and buying a new pair, I simply pledge that if I reach the 250 mile mark with my walking this spring and summer, I’ll allow myself to buy the shoes.

Again, this is snowflaking, just in a little bit different form. If I don’t have the motivation to go on a really long walk, I’ll just talk myself into a short walk around the park near our house. I’ll kick out a mile and a half or two miles and be back at the house in less than a half an hour, but that little bit contributes to my larger goal.

Cash snowflaking can work well alongside this non-cash goal. If I talk myself into walking for an hour instead of renting a pay-per-view movie or something like that, I can contribute the savings to an account for that goal.

Splurges Let’s say, hypothetically, that I wanted an iPad. I might want that in the short term, but still want to save for the bigger goal in the long term. What do I do?

I could simply split the snowflakes, putting half of the money into the big goal account and the other half into the iPad account. I could also just go for the short term goal now, putting all of it towards the iPad and moving back to the other goal once I have my gadget.

My preferred way, though, is to snowflake in certain ways for one goal and snowflake in other ways for other goals. So, for example, if I save money by choosing free entertainment instead of something with a price tag (like I might normally do), I’d save that money for an entertainment splurge (like an iPad). On the other hand, if I save money with smart food buying, that would go towards the house instead.

Of course, this is a hypothetical assumption that I want an iPad instead of, say, a good paperback.

To put it all simply, snowflaking is a great tactic for any financial goal. It creates a powerful connection between big goals and the little choices we make each day, often in a very tangible fashion.

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  1. Tammy says:

    Until today, I had never heard of snowflaking in regards to finance and frugality, only for planning and writing a novel.


    (in case you hadn’t seen this essay before)

  2. geoff says:

    Really good article I loved the idea of snowflaking. I think its a great tactic.

  3. “Hypothetically” want an iPad? C’mon! Everyone BUT you seems to know you want one…are you just trying to convince yourself otherwise?

  4. KC says:

    Have you actually priced out the location that you’re interested in for your home in the country? Friends of mine have about 10 wooded acres in the “country” (and a nice house and a barn) and their property would sell for considerably less than my 1600 sq ft house on a postage stamp yard in a nice subdivision. I’m just wondering if the “very expensive” goal is something you’re assuming or something you’ve put an actual figure on.

  5. Rachel says:

    I LOVE this idea. Something that works for me is to have an account with ING Direct called “Money Spent on Me.” The idea is that any time I spend $ on myself (be it $1 or $10) I have to match that money in savings. Makes it a little easier to keep myself from spending, if everything I buy is
    “double” the cost. Works in my head, anyway. :-)

  6. Mal says:

    These are the best walking shoes I’ve ever owned:

    Reebok Versa Comfort DMX Walk – Men’s


    And the price is so good that it’s vastly cheaper for me (in Australia) to buy them from Eastbay US and have them shipped.

    And the black leather is good enough to wear with a tie and suit.

    That’s my snowflake’s worth for today!

  7. Joyful says:

    I like your article. It mirrors what I think about snowflaking. I am using small amounts each month (from recycle deposits mostly) and adding them to a fund. Once I reach a few hundred dollars I will use it to help some women villagers in Kenya by micro-lending. I can think of others ways t o use such funds if I start others :-)

  8. Rose says:

    This sounds very similar to what I do, I actually really want an iPad so am saving up the full amount for it then waiting until the second generation comes out. Hopefully it will fall in price a bit and I’ll have earnt some interest on the money in the mean time.

  9. I can get into this idea much much more than the “det snowball” one. That makes no sense in the world to me, this one makes all the sense in the world…

  10. For me it is the same situation with the Kindle 2. But the question is: is it worth some hundreds dollars?

  11. PureFi says:

    I really like the concept of snowflaking and also have used the idea of keeping a picture of your bigger goal in mind with a photo or other representation.

    Having a friend do snowflaking with you and checking with each other regularly helps too.

  12. Millie says:

    Don’t forget that you can get those walking shoes on eBay, too! Go try on and write down the style you like and the correct size (try on at the store) and then go look around. I got a fabulous pair of shoes that had only been worn about a dozen times for about half the price, on eBay. :)

  13. Allison says:

    I’ve snowflaking my way to a new camera ($900)! I have $400 so far! My snowflakes have come from money I save with coupons and left over change! But another portion comes from my exercise/healthy living goals! For every quarter hour I work out a day $.25 goes in the fund! Makes me want to spend more time trying to get healthy and exercise is free! The other healthy living goal came from looking at my statements and noticing how much I spent on fastfood! (ouch). So I limit myself $10 a week (almost a fourth of what I was spending) and whatever is left from the $10 goes to the fund! So weeks I have an awesome deposit to the camera fund some weeks not so much! But by doing this I feel like I’m earning this big ticket item!

  14. Maria says:

    I use the snowflake strategy too, but instead of waiting till the end of the month to add the money toward my goal, I add the money at the end of the day. This gives me the advantage of daily compound interest.

    The iPad is also a major desire. I cannot help but wonder, of the people who have already bought the iPad, how many of them have their emergency fund fully funded? How many of them have no debt on their credit cards, car loan and student loans?

    I am constantly trying to overcome these temptations. So far, no iPad for me. I told myself that I have to save another year of college funding for my child and then I would give myself an iPad…

    If I have to choose between sending my child to college with little or no debt, versus buying an iPad so that someone else’s kid can go to college with little or no debt, I choose my child.

  15. Caroline says:

    I understand how you snowflake, but it seems like it only works if you see something for “x” amount but know you can get if for “x-y” somewhere else. If I knew that “x-y” existed, it would become my “x” and though I would know that I saved money in some fashion, it wouldn’t make me want to put that money into a savings account. I’d simply think – “look, I’m staying under budget so now I can spend more in that category.” I dunno, my brain just doesn’t want do the snowflake. Maybe it wants to see the snowball at the end of the month and sweep that into savings b/c those tiny transactions clutter up my statement :P Also, I’m wondering if the concept works better when you spend cash (then you can actually remove that money from an envelope and set it aside for a snowball later). I realize it’s just a little thing to trick yourself into saving more. My own “trick” to saving now is stocking up a couple funds at the beginning of the year with the amount I intended to save over the 12 months (I’m fortunate to be able to do this – like $1000 in a medical account, $1500 in a vacation account), then I save the rest in another account for grad school (it’s a much bigger amount that I can’t just load up immediately). I also have another hack for saving $1000 in a year – in yet another account (my credit union account), I put $84/month because that ends up being $1000/year, yet feels painless (it’s not so much more than $50/month, yet isn’t a whole $100/month). I sometimes think I should just set up 10 accounts each taking $84/month because it feels less painless than one big lump sum of $840/month (though it means more clutter!) :P I’m even switching to a biweekly budget b/c it reflects how I get paid and the amounts are smaller so it feels like less to pay out or save. I realize the irony that your whole post was on saving small amounts and here I’m telling you how I trick myself into breaking money into smaller amounts that feel easier to save. Honestly we’re all just looking for something that inspires us, right?

  16. Matt says:

    Thank you for this impressive tip regarding snowflaking. I think I need to apply this when I complete my 30 day soda free goal, and then think about my next 30 day trial (which will be related to savings and finances).

    I believe the idea of saving in one area and applying that to my financial goal will be the best way to build up that plan. Even when it comes to extra income that will be trickling in (which in my case includes league winnings from bowling, impending flea market and yard sales we’ll be conducting throughout the summer, and survey incentive checks that come in the mail) I need to throw more money into our emergency fund.

  17. Annie says:

    I’ve not heard of the term in the past but I do a similar thing. When I save money on a purchase I take the money saved and stash it in my savings account. Great post!

  18. Stephen says:

    I also “hypothetically” want an iPad, so I decided to sell off some of my unused gadgets on Craigslist. A super neat universal remote control ($60), a Wii + games ($250), a rarely used, but great condition netbook laptop ($250). Now, I have enough money to get an iPad, but I realized that I don’t really want one.

    However, selling these items has allowed me to find another income stream. I had “hacked” my netbook computer, and the person that I sold it to has a group of friends who now want me to “hack” their netbook for them as well. I said I could do it for $75 each, and 3 people have already replied that they would love for me to do it for them. Since it’s a very easy job (something I can start and let run while I’m working), it’s an easy way to make some extra cash that I can save and invest, or buy myself a toy if I want to!

  19. Richard | RichardShelmerdine.com says:

    The 250 mile goal is definitely something I’d look into. Sounds like a great idea. I’m always willing to try out new ways to achieve my goals.

  20. Stephan says:

    its a great way to realyl eat into your debt. The problem however that makes it hard to follow is the fact that a lot of people can not stick to the rule. If they save 5$, they are more likely to spend those extra 5$ on something else than save it for the future. Its just a part of the american way of living and money management, but hopefully this will get better as we have all lived through a very tough economic time the past couple of years.
    Preferred Financial Services

  21. Dawn says:

    I love this idea! It’s really easy to overlook how small things affect your finances, but this idea is a great way to make those small things count.

  22. Andrew says:

    I developed Cashflake for those who want to track their snowflaking on the iphone.

    If it is OK to link, it is available at http://cashflake.com.

  23. Charlie says:

    I really like this idea. I know the way that I’ve been saving is to do automatic transfers between my checking and savings account. It happens one the first day of every month. I am also looking for ways to reduce my expenses. Recently I am going to be able to make two changes. I am moving to a bit smaller apartment ($400/month Savings) and also dropping cable and phone service, sticking with just Internet service (approx $100/month Savings).

    With those choices complete, I will increase my monthly automatic transfers by $500 more each month.

    Bottom line, the way I look at it is if I’ve been used to spending X amount of dollars and now it will become X – Y dollars, might as well put those Y dollars into savings.

    Good luck everyone!

  24. vinicius hisao suzuki says:

    i loved this idea. in fact, i believe this will work perfectly for me because you don’t “feel” saving money, but at the end, you see the result. great idea! going to start today! thanks.

  25. Frank says:

    I can say I enjoy the concept of snowflaking but have yet to put it into effect. I don’t know if it is due to the way I was raised or the context in which I saw others spend money, but I buy immeadiately or I don’t buy at all. This behavior has made me be known as a modern day cheapskate. I just don’t buy as much stuff anymore. Using this technique you just shared I think I will be able to acheive some of my material goals and also some professional ones as well. It’s good to think in the context that it doesn’t have to all be done at once to be sucessful.

  26. Jack says:

    I have used this process to my advantage often.
    Whenever I break a bill, I put the singles and change in a seperate pocket. When I get home, the silver and singles go into one jar, and pennies into another.

    With this, I have purchased a $4000 bicycle, a MacBook Pro, and some other smaller items.

    This money becomes my Rat-hole, which I turn into large bills, and squirrel away. I usually have about $100 in coins, and $500-$1000 in large.

  27. Crystal says:

    Money saved is not really money earned, so where does it all come from? I want a new car but don’t want to wipe out our auto and home maintenance fund to buy it, so I choose to keep driving my crappy Aveo. Do I get to move the $15,000 I’m saving to another goal? Nope, because that would be counter-productive.

    Wouldn’t it be simpler to save a set amount for a goal? If I wanted a new car, I’d put 10% of my paychecks or $200 a month or whatever into an account for a new car…seems easier and more efficient than moving around a few bucks every time I buy meat from Sam’s Club instead of Krogers…

  28. Credit Girl says:

    The idea of snowflaking is a really good one. This article is also really good because it gives you some other ideas for savings, including snowflaking. Hope you like it!

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