Line a baking sheet with parchment paper or wax paper to keep the peanut butter snowballs from sticking and to make cleanup easier.
In a medium bowl, beat the peanut butter and softened butter together with a hand mixer or sturdy spatula until smooth and creamy. Stir in the vanilla extract and salt.
1 cup creamy peanut butter, 4 tablespoons unsalted butter, 1 teaspoon pure vanilla extract, 1/4 teaspoon fine sea salt
Gradually add the powdered sugar, about 1/2 cup at a time, mixing well after each addition, until the mixture is thick, smooth, and easy to roll. It should feel like a soft cookie dough. If it is too sticky, add a bit more powdered sugar; if too crumbly, add a teaspoon of peanut butter.
2 to 2 1/2 cups powdered sugar
If using crushed graham crackers, vanilla wafers, or crispy rice cereal, gently fold them into the peanut butter mixture for extra texture.
1/2 cup crushed graham crackers, vanilla wafers, or crispy rice cereal
Using a small cookie scoop or spoon, scoop about 1 tablespoon of the mixture at a time and roll between your palms to form balls. Place the balls on the prepared baking sheet. You should get about 18–22 balls, depending on size.
Place the tray in the refrigerator for at least 30 minutes, or in the freezer for about 15 minutes, until the balls are firm. This helps them hold their shape when dipped in chocolate.
In a microwave-safe bowl, combine the chocolate chips and coconut oil or shortening. Microwave in 20–30 second bursts, stirring after each, until the chocolate is completely smooth and glossy. Alternatively, melt gently in a double boiler on the stovetop.
1 1/2 cups semi-sweet chocolate chips, 1 tablespoon coconut oil or shortening
Using a fork or skewer, dip each chilled peanut butter ball into the melted chocolate, turning to coat. Tap the utensil on the side of the bowl to let excess chocolate drip off, then return the coated balls to the lined baking sheet.
While the chocolate is still soft, roll each ball in shredded coconut or sifted powdered sugar to coat. If using powdered sugar, you may find it easier to let the chocolate set for a few minutes first so it does not absorb the sugar.
1/2 cup finely shredded unsweetened coconut
Return the tray to the refrigerator and chill the peanut butter snowballs for 20–30 minutes, or until the chocolate is firm and the coating has set.
Arrange the finished peanut butter snowballs on a platter for serving or pack them into tins or airtight containers for gifting and storage. Keep refrigerated until ready to serve.