Found Money | Paying Off Debt

How to Find the Money to Pay Off Your Debt

March 3, 2011

Spring is starting to bust out here, but I’m still thinking about snowflakes. As in debt snowflakes. After a brief pause for an all-cash Christmas and some much needed all-cash home improvements, we are again focused on paying off all non-mortgage debt as quickly as possible.

Debt snowflaking is the most successful method I’ve used to eliminate debt. If you take all of your “found money” (basically anything that doesn’t regularly come in in the way of a salary or business income) and apply it toward your debt, it can add up fast. If you start actively looking for ways of creating debt snowflakes, it goes even faster.

How fast?

Consider this: Since October, we’ve snowflaked almost $3700 to our non-mortgage debt, just by using the found money/snowflake method. The largest snowflake was $375.40 and the smallest was $7.50. The average amount was $80.24

So what kind of things can you snowflake? Literally anything. Here is a list of methods I’ve used or have read about others using to pay down debt.

  • Rebates
  • Refunds and reimbursements
  • Coupon savings
  • Garage/Tag/Yard sale proceeds
  • Sell your books
  • eBay sales
  • Bonuses at work (does anyone get those anymore?)
  • Income from side businesses
  • Income from part-time work
  • Selling artwork or crafts on Etsy
  • Proceeds from cash back debit cards
  • Swagbucks (earn money by surfing the web)
  • Money gifts (birthday checks from Grandma, etc.)
  • Canceling memberships – especially little-used ones (gyms, Netflix, etc.)

I know this list is just the beginning. If you’ve got a way of paying down debt that isn’t on this list, please add it in the comments below. I’d love to hear about it!

  1. Good job with your snowflaking!

    Adjust your tax withholding and send the money straight to your creditors. Why pay interest to someone when you are giving interest free loan to uncle sam :)

  2. Good points, Suba. Actually, we're self-employed, so we don't ever get tax refunds, but for someone that does, it's a good snowflake oopportunity.

  3. Hi Julie,

    GREAT post – lots of good ideas here! I'm including it in tomorrow's Monday Morning Personal Finance News post over on my blog. :)

  4. one way that we snowflake debt is by rounding up payments and, even when a payment goes down, continuing to pay the higher amount. for instance, we have a set car payment amount of $330. the first month, the payment was something like $329.43; we just rounded up to $330. as we’ve been paying more than the minimum, the payment goes down each month but we stick with the $330. we also do it for my husband’s student loans and our mortgage (our only other debts).

  5. I found you through Money Saving Mom and I’m reading through the posts. I do have a question. If you start selling books and/or crafts online and maybe start a blog and start earning little bits of money from that, do you claim all of the little bit of money on your taxes. Are you considered to be your own employer? This is an area I’m stuck on. What if you only made say $500.00 in a year selling books.

    1. Hi Terry. Great question. Please understand that I am in no way a tax advisor or professional. However, my understanding is if you sell something you already own and are selling it for less than you bought it for, you’re probably okay not claiming it. It’s like having a garage sale. However if you buy things cheaply in order to flip them for profit, or start selling crafts, etc. online you need to claim that income. I do claim the income from my blog and pay self employment tax on it. You would definitely want to check with your own tax advisor based on your specific situation.

      Thanks for the question. It’s one many people have.

  6. Stop extra spending. Not only because this will keep more money in your pocket, but because you won’t be fighting yourself even if you get more money to put towards debt. If you are spending more than you make, no matter how much you make, you won’t be able to get out of debt.

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