How to Snowball Bills
The snowball method is a savings method I started doing to get myself on track around last year. I did have to restart everything because a few emergencies popped up all at once. But I started this again this month and so far the results have been wonderful.
The important part about snowballing is that you label everything, track it, and don't touch it unless you ABSOLUTELY have to!
Why should you snowball bills? > Think of your money like it's a snowball, and there's a hill with lots of bumps and lumps on it (bills). You start out at the smoothest area you can find, with the least amount and begin rolling the snowball down the hill. Your money (the snowball) begins to get bigger and bigger, eventually, those lumps and bumps are hardly noticeable!
STEP 1: Identification
The first step is really simple, you need to identify a few things.
A list of every bill you have (non variable)
A list of fun expenses (getting mcdonalds, 5 below plushies)
The first step is to list out every bill you have and their amount PLUS one to two dollars. Once you have this you'll be able to see exactly how much bare minimum expenses are.
It can also be helpful to budget groceries etc throughout the month to avoid over spending on things you genuinely don't need. But there's going to be another post on what I recommend stockpiling to avoid overspending eventually.
Now identify your fun expenses, be realistic. Do you go to mcdonalds or something like twice a week? How about clothing shopping? Books?
You don't have to avoid spending for fun completely with this method which is why it works.
STEP TWO: The Process
What are some very reasonable adjustments you can make to your fun expenses? Maybe one less mcdonalds trip a week? How about one less book per month?
Are there any side hustles you can pick up? Maybe writing on fiverr, art, cleaning houses, selling nudes, idk. You can also do things like swagbucks for small amounts of money.
The one thing I stress here is start with the smallest bill first.
That is the entire BASE of this method. It's the glue, it's the starting snowball you need to roll it down the goddamn hill.
So now that you have a list of all your expenses and you have identified the smallest bills, all you have to do is follow these steps.
Pick the smallest expense you have and the moment you have excess money, put that amount back for the next month. If you have an expense that is $10 as your lowest and you have $30 extra to spend.. Put three months of that $10 expense back.
Once you have 3-5 months of the smallest expense back, start on the next small expense. You'll do 3-5 months of that expense, and so on and so forth.
When you get to the really big bills, if you don't have enough to put back for that bill, start at the smallest bill again and just keep going.
You can also decide to just slowly build the money up for the big bills 3-5 months ahead. That part is up to you. BUT if you do it the way I do (as previously mentioned in #3)..
4. Once you run out of small bills for all 12 months, take your money and begin putting it all towards the bigger bills ahead. You may not have it all at once, but just like that snowball itll get bigger and bigger.
Now you don't have to completely avoid fun expenses when doing this but it gives you a way to effectively save SOME sort of money. You can either put this money into an account or you can keep it in cash and slowly build up and then start depositing as time goes on.
Closing Example
I figured I'd provide a solid example as for how this can help.
Let's say you typically spend $15 / week at mcdonalds or on some random expense. Now, your lowest expense is $10. So you pay $10 / week towards that expense.
Each week is a month of that expense paid off and no longer a worry in the future. It will take 12 weeks, or 3 months, to have an entire year of that expense paid for.
But now let's say, you find a small side hustle and you make about $20 per week off of it. You start building it up.
With this method, you could be saving months ahead of time with excess money. It doesn't matter how small the excess money is. Even if it's money you got from donating plasma or something, it will still help.
Now let's say on a more extreme example, you pick up a second job that's tip based and work two days a week (5 hour shifts) + make $20 per week from your small side hustle.
In this example, you make $50 per shift average at your new job. That's a total of $120 extra per week. So you take the $20 and use that for your fun money and the $100 for that one week pays off 10 MONTHS of that small expense.
Then your next expense is $20, but making that extra $120, you can now pay off 12 months of that $20 expense in two weeks.
This obviously changes based on your personal situation but it's something I heavily suggest you think about.
