Quick Debt Question!

Smudge32 · 13 May 2005 at 9:48PM

I've just started implementing lots of Martin's tips including the one about saving bits of money each month for things in the future.

For example, I'm putting aside £25 per month for my holiday next year, £15 a month for presents (whole family, cards, wrapping paper etc) and £15 a month for my tax disc. I'm doing quite well so far with six months worth there.

However...it's taking quite a while to get myself out of the hole I was in with debt and I was just wondering if people would use that money to help myself get out of debt quicker? I have a £350 overdraft, £1500 on Sainsburys c/card (0%, at limit) and £2250 on Lloyds c/c (0% going down slowly). There's about £225 in my account to use, but it seems such a drop in the ocean to use it for my debt repayments. On the other hand, I'm finding it really hard still to live each month - real hand to mouth stuff and it's getting very wearing/depressing!

Any ideas experienced MSEs??!!!

Malestrom · 13 May 2005 at 10:09PM

No, don't use it against your debts. What you are doing is budgeting. If you take that money that you've put aside and pay off some debt, then when you need to pay the car tax or the chrimbo pressies, where's the money going to come from? Yes, back off the cards again. So, round and round in a circle with no end in sight.

You're doing the right thing, stick with it!

homersimpson_3 · 13 May 2005 at 10:38PM

budgeting is answer to money management and if you want to reduce debts you need to spend money on what you need not what you want. yes when you are living hand to mouth (as you put it) it can wear you down and sometimes you do feel up. the answer is think of light at end of tunnel- what you will be able to buy and more importantly save when out of debt.
putting money aside for presents and tax disc seems sensible but you may wish to consider why you really need a holiday. the extra £25 could be used to reduce debt further. use it to clear overdraft on which you may be a paying a high rate of interest. 350/25- in 14 months overdraft paid off. also suggest if you haven't already then cut up credit cards to remove temptation.

Malestrom · 14 May 2005 at 7:17AM

Homer is right - doh! - you should really use that holiday money to pay towards a debt but I think that having something for yourself that you can work towards helps to prevent debt-fatigue. We see a lot of posts on here from people who are halfway through their debt program and sick to death of living on a pittance, so if you can take a holiday that you've saved hard for and paid in CASH, including the spending money, then I think thats allowable under the circumstances.

Xbigman · 14 May 2005 at 3:58PM

You need to realize that this is the hard part. This is the first year you have saved up for things so you have the debt of last years car tax / holiday being paid as well as saving for next years. Effectively you are paying for these twice in a year. Next year it will be easier. Keep going, it is worth it.
Regards

X

Smudge32 · 14 May 2005 at 8:36PM

Thanks all of you. You really don't know how valuable this advice this, and more importantly how good it is to feel that I'm not on my own! I'm not sure whether you're out of debt or not, but it's good to have people supporting you.

Cheers people!

Iona_Penny · 15 May 2005 at 9:40AM

Well I think you sound like you are doing really well and although it is hard to stick to your budget and feel you are missing out on things, stop and think of the alternative....if you gave yourself a less harsh lifestyle how would you pay for it ..yes 'plastic fantastic' which would increase your'e debt, pressure your budget to repay and make you feel worse etc etc.

Stick with it and keep the money you have put aside because its spoken for.
Do you want to post your budget? Can you increase your income ie second job and tell yourself you will only do it to pay off X or Y debt? I can only speak from my own e xperience but the feeling that my debt was under control and I was in charge is a much better feeling than the alternative.

How much a month does yourdebt decreease by, can we work out when you will be debt free and encourage you on?

spendaholic · 15 May 2005 at 9:45AM

Xbigman wrote:

You need to realize that this is the hard part. This is the first year you have saved up for things so you have the debt of last years car tax / holiday being paid as well as saving for next years. Effectively you are paying for these twice in a year. Next year it will be easier. Keep going, it is worth it.

I think that this is an excellent point and it should be posted up on every single board, and printed off in really big text and pasted up on everyone's wall - nice one, X.

ceegee · 15 May 2005 at 1:25PM

Hear, hear. Or should it be here, here? Whichever, that sums it all up nicely....it is also a very encouraging post....it shows exactly where the end of the problems will be, so that you are not thinking (even subconsciously ?sp) that it is going to be like that for ever! Somebody buy xbigman a drink. That post deserves to be nominated as post of the month. I'll do that as I can't afford to buy him a drink! :beer: :T

ceegee · 15 May 2005 at 1:33PM

Right, I see I was beaten to it! Well, I seconded him for post of the month!

Quick Debt Question!

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