Heard of the Debt Snowball? How About the Dumb Snowball?


Now I’m not setting out here to write this little bit and make anyone feel dumb. Well, not really. This is really more of a confession because man did I do a bunch of dumb things during this past week. In order to save at least a little bit of face, I’ll just highlight a few. Hopefully though, my point will be driven home.

If you haven’t yet read about our recent moving drama, that can give you a sense into what exactly happened — the original bit of snow for my Dumb Snowball.

You’ve probably also heard of the debt snowball by now, where you pay only the minimums on everything but your target debt. When the target debt is paid off, you apply its minimums and any extra you were applying toward target debt number two. You repeat that “snowballing” process until all of your debts are paid off. The secret, of course, is intensity.

Well, this last week I discovered the “Dumb” Snowball. Basically, one thing happens to knock you financially off-balance, and the snowball effect kicks in where you proceed to do one dumb thing after another.

Last Monday our trusty Chevy Prizm died. And thus began my series of dumb mistakes. Being somewhat worried, having my wife and two little boys on the side of the road, I failed to remember that we have roadside service. We pay for that just in case things like this happen. Well, the tow truck cost $200. We can probably get that reimbursed through our insurance, but until we do, we’re out $200.

We rented our car from the airport where they have huge fees. There was one rental company that would let me do a long-distance drive with a car not from the airport but they were a few dollars more expensive. I chose the airport location at a rate of $80 a day. That wasn’t so bad. The mistake came when we failed to switch that car for a cheaper one for several days. That mistake alone probably cost us $150.

I forgot to fill up the $80/day rental before returning it. That cost us $40.

To add insult to injury, there is a gas station literally 30 seconds from the rental drop-off location.

Because I chose to save a few dollars and went with an airport rental I (1) had a harder time getting to the DFW airport to make the switch to a cheaper car and (2) still had to rent from the airport again (with their huge taxes) once I did get the cheaper car. That meant I was paying more and had to drive back to the airport to finally drop it off.

I guess this is more than just a few of my mistakes (but certainly not all of them). These all took place in less than a week.

There are two things that really scare me about the position we were in. I wasn’t worried about us financially because of our emergency fund (for just these types of situations) but I was worried about these two other things:

  1. First, it seems that spending breeds spending. Once we forked over the $200 for towing, I noticed a change in my thinking about money. It seems that being in “Emergency Fund” mode gave me a license to spend (case in point, we went to Applebee’s that night instead of to Wal-mart for some food. And we don’t even like Applebee’s.) Being in the eye of an Emergency storm does not give you license to throw all well-groomed spending habits out the window. It was happening though. My wife and I could both feel it.
  2. Second, and this is actually much scarier (and more expensive) is the Dumb Snowball. I don’t know what it is, but it seems that these crises seem to keep us from remembering even the easy things (fill up the rental before returning it, don’t forget the gate opener for the apartment complex in the rental that will require a $60 fee if you lose it — we’re trying to get it back). This snowball effect is costly! What was even more worrisome for me was that we were needing to purchase two cars in just this type of mode. We came to grips with the fact that we were paying through the nose daily for our rental, and took our time getting what we feel was a good deal on the cars.

Being in these situations is scary though! Psychologically, you feel as if your financial house is tumbling down around you. Little do you realize that the large bulk of that feeling is purely a figment of your imagination, that things will work out, and that you’ll come out smarter and more savvy. A bit more ready for the next crises.

In the thick of an emergency event? Take a few deep breaths. Go for a run. Lift a few weights. And above all, don’t succumb to the Dumb Snowball. It’s a costly ride!