Taxis back to basics...debt and mortgage free before 50(feb 2014)

taxi73

ZTD wrote: »

Just calculate the effective interest on the 0%

i.e. if it takes you 1 year to pay off - the effective interest is 0%
2 years = 8.95%
3 years = 11.9% - etc

I'm rubbish at working that sort of stuff out ZTD..
How did you come up with the figures?:cool::cool::cool:

ZTD

Year 1 is 0%
Year 2 is 17.9% - so combining year one and year 2 you will pay 8.95% per year
Year 3 is 17.9% - so combining years one,two and three you will pay effectively 11.9% per year.

Of course those are just approximations, I haven't compounded the interest (for example) and I haven't take the exact dates into account.

taxi73

elantan wrote: »

i know what y ou mean ...and martin would possibly say you are wrong ...but alot of us like to have that emergency fund we need it ...for when the car breaks down or the roof leaks etc ...i know i need one and unfortunatley recently i didnt have one and it has cost me dearly in overdraft charges (well it will it hasnt exactly yet) ...also you are thinking in the long term you need that 0% down so that when the 0% ends you wont be paying as much interest on the remainder as you wouldve been had you not paid the extra off ...the lob aint going no where it aint changing so you can afford to take more of your time with it ...ultimately though us humans need psychological lifts as well which no snowball calculator will ever understand ...

if it were me i would be doing the same ...i know when i get home i will need to put in place a savings plan as my recent added debts (car and son) have hit me hard ...if i wouldve even had some savings to offset i wouldve been happier about it ...i think

That's exactly what the savings are doing..offsetting and will be used where needed on whatever debt needs it at the time:rotfl::rotfl::rotfl:

elantan

ZTD wrote: »

Year 1 is 0%
Year 2 is 17.9% - so combining year one and year 2 you will pay 8.95% per year
Year 3 is 17.9% - so combining years one,two and three you will pay effectively 11.9% per year.

Of course those are just approximations, I haven't compounded the interest (for example) and I haven't take the exact dates into account.

see i wouldntve thought about that ...clever as always z

taxi73

elantan wrote: »

hey z lovely to see you as always ...can you tell me where you got those numbers from?

Glad I'm not the only one who can't work out the formula.
ZTD will be right though and it's interesting to know that there is a formula to work these things out.

taxi73

Thanks ZTD..that makes perfect sense and I can see now why it would be approximate.It obviously depends on what balance is left at the end of the 0% period and how long it takes to pay that off as to the actual true cost.

ZTD

taxi73 wrote: »

Thanks ZTD..that makes perfect sense and I can see now why it would be approximate.It obviously depends on what balance is left at the end of the 0% period and how long it takes to pay that off as to the actual true cost.

Exactly. It also depends on how their interest rates go in the meanwhile as well. With the LOB - you know how much it is going to be. But with the 17% the interest rate is not a guarantee. Could be 10%, could be 60%...

taxi73

Thanks ZTD.I will see how close I am at the time to clearing it and apply for a 0% card if it's worth it.There may be enough in the savings.
I cannot work in set figures as we are both S/E so am trying not to put all eggs in one basket...every single thing is variable in our house.
As long as every bill is paid and the debt is going down that is a success but obviously the quicker the better.
The most obvious thing to do is put the PAD that would go to virgin into the savings and gain interest on it and then pay the 0% card off..but I really like to see the balance coming down as it's a great motivator...I'm probably being daft there!!!..must think about that one.

elantan

well for that one ...figure out how much interest you would get in a month for saving the amount you will put into the account ...and see if that makes it worth the peace of mind of clearing the debt ...if it is only 10p or something then pay it into the card ...if it is a few pounds (and it will go up over the year) then put it into the savings ...it will be less you will need to find at the end of the 0% introduction

taxi73

I. don't think it will be much interest and do feel good paying it each month.
It's the balance that's hard to strike between saving and paying off but I guess at the end of the day it is still all in the debt pot.
I'm just going to live as frugally as possible so that I can throw whatever amount into the savings and off debt.
As long as I don't have to resort to CCs for large bills and that the debt goes down I shall be extremely happy.