• Like a bad penny, debt always turns up…

    unless we change how we interact with money, of course!

    The Bad Penny is dedicated to two pursuits: getting out of debt and staying out of debt! It recognizes that frugality and caring for our planet go hand in hand, and that our unsatiated need for stuff is hurting us in so many ways.

    Easier said than done!


    I am not a finance professional. I write about the world as I know it, and my advice may not be the best course of action for you! Please seek qualified advice for your particular situation.

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Snowball or Snowflake?

I was recently introduced to the concept of snowflaking at paidtwice.com. The author didn’t come up with this idea, but I’d never seen it before. It’s a simple concept, and one that I realize I’ve contemplated doing on occasion. But I never considered methodically snowflaking.

It’s based on the familiar concept of snowballing, introduced en masse by financial guru Dave Ramsey. Snowballing is a method of paying off debt where one pays the minimum payments on all cards but one. That final card (which is also the one with the smallest balance) receives any extra money that can be given to paying off the card. Once that card is paid off, the debtor moves to the card with the next smallest balance, paying the minimum payment plus whatever he or she was paying on the first card. As debts are paid off the credit cards one-by-one, the debt is also paid off faster and faster as the debtor applies the same overall amount to fewer cards. This method is great for that nice boost you get when you accomplish something – like paying off a credit card!

Of course, it takes many little snowflakes to make a snowball, which is where the concept of snowflaking comes in: Any time you have a little extra money – either by spending less or earning more – put it toward debts or savings immediately.

So how can you make that extra little bit?


1. Sell things you don’t need on Ebay, Craigslist, or another forum that allows the sale of items.
2. Look at your grocery receipt – usually it will tell you how much you saved at the bottom – put that aside as snowflakes.
3. When you pay in cash, keep the bills, snowflake the coins.
4. Fill out surveys or read emails online for money (more to come on the companies that have actually paid me!)
5. Become a paid blogger.
6. When shopping online, use a site like Ebates to get cash back. Then snowflake the money you saved.
7. If you use a credit card with a cash back program and pay the balance off in full each month, snowflake your rewards right back into the credit card. Use the money you saved by paying off that bill with the rewards to pay more off another credit card.
8. Find “gigs” – these are usually short-term, part-time jobs. You may find yourself serving food for a caterer, working as a model, painting houses, or any number of things. You can find gigs in the local paper classifieds as well as in their very own section on Craigslist.

There are also many ways you can almost-snowflake by finding things you need for free or cheaper.
9. Swap babysitting with a friend.
10. Use restaurant coupons to save money eating out.
11. Bargain at the farmers market or flea market.
12. Plant a garden or raise your own chickens/pigs/cows (lol, that may be extreme for a little milk…)
13. Carpool.
14. Bring a bagged lunch to work or school.
15. Turn your thermostat down and dress in layers. Use a blanket on your legs when you are sitting down. Wear house shoes or thick socks.

I could go on and on, but I won’t. You get the idea, hopefully, my readers, and I’m sure I’ll bring up the subject again!

So that’s what I’ll be trying in the next couple weeks. I’ll let you know how it goes and what I learn. We’re working on paying off our personal credit card right now, and I can make a payment once a day, so I can even just put a few dollars in here or there. In fact, I just paid $20 that we had in the checking account that wasn’t allocated to anything! That’s the beauty of being able to use a billpay system or to pay right on the creditor’s website – you can pay small amounts often, and easily!

I’ll also try to put a portion of that to our savings account, which is also our emergency fund.

I think I’ll be surprised by how much I can put in there. It will be important to track my payments so I can see what extra amounts I was able to pay.

Just remember that this is on top of your monthly payments! If you don’t pay them, you might end up with late fees, and that would defeat the purpose.

I think the main benefit to snowflaking is it will keep me on track and focused. Right now I really want to do something to work on this problem (of our debt) but we don’t get paid until this Friday. As I snowflake, I can be constantly on the lookout for other ways to save or earn more money to put toward the debt. I can be proactive. It is a huge mental boost to even pay a small amount, because it feels like I am accomplishing something instead of just waiting!


One last business post

Okay, I’ve talked the debt over with my husband. He and I both feel like getting this mess down on paper changes the way we feel about the debt – instead of being afraid to know and avoiding the issue, we are much more confident in our ability to pay down the debts. “There’s a light at the end of the tunnel” is how Brian described it.

So now it’s time to get a plan on paper. I’m writing it out for my own benefit, but also in the hope that it will help some of my readers (few as they are at the moment, I know that in the future others will look back at this post.)

First we need to look at our bills. Most of these are unchangeable, though we are considering switching from broadband internet to high speed, which would save about $25 a month. However, with as much work as I do on the internet, it would probably end up costing more in productivity, so we need to assess that before we actually do anything. We can’t get rid of our cell phones, since we’ve already gotten rid of our land line. And finally, if we give up our $9/month basic cable, we won’t get one single station without buying an antenna for our roof.

And one thing to note is that summer will be much less expensive than winter – right now we are paying more for electric heat, oil heat and firewood (yes, our house is very complicated. 🙂 ) and we have to pay someone to plow our long driveway, especially since we live in the snow belt of the snow belt. In summer, we’ll open windows for our air conditioning, the clothes are hung up outside, fresh veggies and fruits will be growing so we don’t have to buy them, and the driveway will remain clear – all for free!

What we have to pay monthly (some of these are semi-annual bills, so I’ve cost-averaged them for each month):

Mortgage: $750
Electricity: $120-$200 (these are winter costs. Summer bills are about half this, if not less.)
Cell Phones: $65
Internet/Basic Cable: $55
Firewood: $90 or so for 1/3 cord (this is based on our last experience with poorly seasoned wood. The next $90 batch may burn much longer and hotter, so we don’t have to use as much as fast.)
Trash pickup: $25
North Carolina trash and water services: $10
North Carolina Electricity: $10-$20 (the house is vacant.)
Plowing: $100/month from December to April.

Total (based on the highest amounts): $1215 a month.

Our guaranteed monthly income is $2068, plus any additional income I make from my side jobs or selling things online, and income from the business we own, which usually generates no less than $200. So I can probably guesstimate a monthly income of about $2400, to be on the safe side.

So we have $2400-$1215= $1185 a month to pay for seven categories of budgeted money: food, gas, home repair/improvement, savings, tithe/giving, allowances, and debt. We also generally give ourselves a monthly allowance of $40 a person, although it will be going down to $20 each for a while. It’s not much, but it’s enough for us to each have some cash to use for whatever we want (usually the coffee shop in town!) without having to justify it to anyone else. It really is a measure taken for our sanity!

Based on yesterday’s debt calculations, we will have to come up with $615 a month just to pay the minimums on our cards – at least right this instant. As we pay off or pay down cards, this number will change. This leaves us with ($1185-$615) = $570 for food, home repair/improvement, savings and tithe/giving. Here’s how I’ve sorted it out:

Tithe: $200 (approximately 10%)
Food: $100 (we’ll have to get creative, but this is good for right now since we have a well-stocked pantry.)
Gas: $100 (thank goodness we don’t drive very far or much!)
Allowances: $40
Home repair fund: $50 (this is to cover necessary repairs and improvements, like new blinds for our son’s room.)
Savings: $0 (this will go up in the future, and when we have extra money, part of it will go in here, but there’s no room in the budget for it right now.)
Total: $490
Left over: $80 – this will be put toward paying credit cards as well.

So that’s it – our rudimentary, but suitable, budget. I’m glad we threw away our credit cards when we did, because our budget would have become tighter and tighter. I’m already disappointed that we only have approximately $80 to put towards our debt above and beyond the minimum payments.

So what do we do now?
Obviously if we could eliminate some debt, we’ll have more flexibility with our budget in case of an emergency. Plus there’s always the added benefit of having less debt quickly! 🙂

We need to sell off some of the items we have laying around that we don’t use and planned to sell but never got around to it (we have an antique electric stove in our basement and a sailboat in our garage from the previous owners of our house, among other things.) We’ll put that money toward a credit card to pay it down quickly.

We will snowball our debts, which I will talk about in a future post. We also plan on snowflaking any small amounts of money we get into the debt, which is something I want to explore further in another near-future post. Until then, you can read the article I linked to – the woman who writes that blog is very much in the same situation as us.

We will also continue to try to save money through thrift, stewardship, and thoughtful living. This is why we tithe. It is hard to explain to someone who doesn’t tithe, but we do believe in supporting God’s workers in the world, so we won’t give up our dear child we’re sponsoring or giving money to our church, who uses it to support missionaries who build wells and schools. Time and time again we find we always have enough when we’re dedicated to giving 10% of our income to those who are less fortunate. You may not agree with me, and that’s fine. My point is that what we consider priorities when it comes to our money may be different from the people around us.

There’s so much I have to say! I’m having a hard time not typing it all out here! You’ll just have to keep reading. 🙂