What is Snowflaking?

I’ve been hearing a lot recently about snowflaking and although I understand the idea behind it I’ve never really looked into it. I wanted to learn more about the idea and to see if there was any real merit behind it.

The idea of snowflaking is pretty straightforward in that any extra money that you save or make is applied to a financial goal right away regardless of the amount. Paidtwice has some great articles about snowflaking and this is where I learned a great deal about it:

Snowflaking a Primer
Five Golden Rules for Snowflaking
Here a Snowflake There a Snowflake

The concept is pretty simple in that you have to keep track of your money and your spending and anything that you save gets applied to a financial goal. This also goes for any extra money that you happen to make. Over time these small amounts really add up quickly. If you buy a latte from Starbucks for say $4 a day that adds up to $1,460 over the course of a full year. Most of us completely ignore that $4 and continue with our lives. The snowflaking idea is in principle very simple and it should work.

I’ve done similar things in the past where I have set aside small amounts regularly over a period of time to find that it very quickly added up to a significant amount. I can see a problem with the concept in that you have to keep a very close eye on your money to make it work. Keeping track of extra money that you make is pretty simple but all the money you don’t spend is harder and unless you’re diligent you might lose track of it.

Personally concepts can make sense but how they are applied really makes the difference if the idea has any real merit. To find out if snowflaking is a good idea for me or where there might be some issues with it I would need to put it into practice. In the month of April I’m going to test out the concept of snowflaking to see the ins and outs. All of this will start with making sure I have a detailed budget in place for the 1st of the month at which point I will apply the snowflaking idea for the 30 days following.

Trying an idea out is the best way that I know if it really works, or more appropriately how it works for me. I already know that snowflaking works great for a whole bunch of bloggers but I can see myself having some issues really applying it. This test will give me better ground to stand on when it comes to forming an opinion about it. I’ll post my results and then an assessment at the end of April. Wish me luck and if you’re interested have a read through Paidtwice’s posts they’re very informative.

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