Help on my Monthly Finances (what should i do?)

jadex

bendix wrote: »

With respect, that is the single worst piece of advice I have ever read on this forum, and there have been some pearlers.

Paying the minimum owing on a credit card is universally known as a very bad strategy, and for you to suggest that it's better to keep money in a high interest savings account than pay it off is palpable nonsense. Have you not read seen what is happening with interest rates?

NEVER EVER EVER pay minimum balance on credit cards.

Let's face facts here. This guy is probably taking home around £1500 a month, perhaps more. He is likely paying either nothing or some nominal amount in rent. His first priority is to get rid of the credit card debt. The first card with the £400 balance could be paid off in a month. The second card in 2-3 months. Then he can focus on the loan, paynig at least double the minimum to clear it quickly. He could be debt free in a year.

Instead, he chooses to take other loans out - where does it stop?

With respect, but you are referring to different scenario.
It is obvious to clear cards with higher APR first in general.
And it works fine if you have similar amounts to pay on those cards.
But in this case, OP has only TWO cards.
And one debt is 4 times lower than the other one.
So, instead of paying £50 on top on one card and £25 on top on second one, it is better to clear smaller debt alltogether.
I also don't suggest to save when you are in debt - but there is no point in paying weekly. It is better to keep THAT money on savings account and pay credit card bill on the day it is produced.
Also on those amounts £1600 and £400 there is no much difference whether the APR is 15.99% or 19.99%. And paying off one card in full means you are not in a danger of late payment etc.
So, I fully agree with you as general guidance, but not in this particular case.
Cheers


P.S.

bendix wrote: »

With respect, that is the single worst piece of advice I have ever read on this forum, and there have been some pearlers.

That is YOUR opinion and not very fair.

CLAPTON

paying the debt with the highest APR first means you pay the least interest and clear the debt the quickest

-it's true if you have two debts or two hundred
-its true is the debts are roughly the same size
-its true is they are of hugely varying size.

Also just to say many CC charge interest by the day so making many payments as early as possible may reduce the interest: however the T&Cs would need to be checked and the gain will be small.


Now it OK, if you wish to say that the smallest debts may be a psychological aid but do also say the OP will pay more interest that way and take longer to clear the debt.

bendix

zarazara wrote: »

Hello again Original poster. I seems to me that you have come on here for advise and been given a hard time. Actually the people who have replied are correct, but if the rather forceful advice makes you feel miserable it will not help you.

I refer you to the OP's age. He is 25, not 15. He is a man.

This is not giving him a hard time. It is trying to impart some stark realities. It's very easy to be nice and sweet and put a collective arm around his shoulders and say 'there there, it's not your fault', but it is, and it won't help.

If people who are old enough to vote, get married, have kids etc can't understand the basic concept of not spending more than they earn (especially when they are still being supported by their parents, for chrissakes), then I completely despair of this country.

Ste_C

bendix wrote: »

I refer you to the OP's age. He is 25, not 15. He is a man.

This is not giving him a hard time. It is trying to impart some stark realities. It's very easy to be nice and sweet and put a collective arm around his shoulders and say 'there there, it's not your fault', but it is, and it won't help.

If people who are old enough to vote, get married, have kids etc can't understand the basic concept of not spending more than they earn (especially when they are still being supported by their parents, for chrissakes), then I completely despair of this country.

I quite agree. The OP needs a bit of a wake up call and needs to identify where all of his money is going.

To be on £20k a year and be struggling to pay off these debts whilst still living at home just doesn't add up to me.

CLAPTON

Whilst is quite likely that the OP is a troll it's also possible that the OP is genuinely a little financially naive.

Certainly one style of assistenace is the direct approach
-to the obese just tell them they are fat slobs who need to cut down on their eating
-to those on drugs just tell them they are useless wasters that just need to say no
-to the alcoholic just tell them to stop drinking
-to the unfit just tell them to start exercising
etc.

Now I know that many on these boards are pillars of rectitude that eat only healthy food in moderations, exercise every day, are their ideal weight, drink only 21 units or less a week, have no debts, never forget a payment etc but some lesser mortals sometimes may need a little assistance and guidance on HOW to achieve these desirable ends.
So whilst telling the OP he's an idiot may be effective (if a little self righteous), it's possibly also that suggesting spending diaries, budgeting etc may assist in some cases.

bendix

CLAPTON wrote: »

So whilst telling the OP he's an idiot may be effective (if a little self righteous), it's possibly also that suggesting spending diaries, budgeting etc may assist in some cases.

Nahhhhhhhhhhh . . . . . Thanks for the suggestion, but I prefer the 'grow up and get real' approach myself.

It worked for me. I don't see why it can't work for others.

CLAPTON

bendix wrote: »

Nahhhhhhhhhhh . . . . . Thanks for the suggestion, but I prefer the 'grow up and get real' approach myself.

It worked for me. I don't see why it can't work for others.

Since you say you appreciate the blunt, no nonsense, grow up and get real approach, may I say that not being able to see why this doesn't work for everyone is pretty stupid.
I hasten to add that personally I don't appreciate the blunt approach applied to myself.