What to do when the Debt Avalanche or Debt Snowball methods don’t work for you?

In all the finance blogs I have read, I have never seen anyone address what to do if neither the ‘Debt Snowball’ or ‘Debt Avalanche’ methods work, which was the case for me last year. I had been following the debt snowball method for a couple of years and was making good progress, I was in tune with my finances and knew what was going out and when, and I could, at the time afford all my minimum payments. But I knew my financial situation was going to change in September 2020 with a huge drop in income leaving me in a financial position where I wouldn’t be able to cover the monthly minimum payments on my debts. Six months leading up to this financial change (March 2020) I knew I had to do something completely different.

I listed all my debts, but this time in order of the highest minimum payment to the smallest.

Although a Loan had the smallest balance, it was the highest monthly payment. And in total, I had £916.84 going out every month as a MINIMUM. Shocking really and looking back I will never know how I covered it. I always did though. I never missed a payment once, ever.

I did need a new plan so over the next six months from April 2020 to September 2020 I paid as much as I could off the loan and then the credit card. The loan didn’t allow me to make overpayments, so I created a bare bones budget, meal planned every week and saved everything I could in an account until I had enough to pay if off in full. I was able to do this by May 2020 and paid the loan off in full. This then freed up the payment I was making on the loan, thus reducing my total minimum payments on all debt to a much more manageable amount.

O then attacked the next one in a similar way to reduce the minimum payment. Again, with a bare bones budget, meals planned, money saved, and de-cluttered items sold, the minimum payment came down to a much more manageable figure by the deadline of September 2020, when I received my reduced income.

As I write this, March 2021, I have now switched back to the Debt Snowball method where I am trying to attack the credit card with a vengeance!

I think the moral of my story is this, it’s important to try all the different methods out there if you think they will work for you but be open to doing your own thing if your circumstances change. It’s important to regularly review the methods you’re using and if you anticipate a change in your finances, make sure you leave enough time to adjust your way of working so you don’t come unstuck. Ultimately, if I had not done what I did then I would have been unable to pay the minimum payments and would have had missed payments and possibly CCJ’s on my credit file for several years.