can some one help me with overdraft/credit card/budget??

redballoon_2

ok. feel in a pickle today about money as we are trying for a baby, so worrying about the future and if we can afford it etc...

our salaries combined are £2413

Outgoings

council tax £107.00
insurance £101.27
gas and electric £45.00
water £70.00
phone/broadband £200.00
buildings ins £32.02
food £90.00
petrol £150.00
savings £160.00
mortgage £398.63
dvd rental £7.99
tv licence £10.54
credit card £270.00
total £1642.45


left over £500.55


currently have overdraft of £1821.94 (limit is £2000) (hubby been out of work for awhile so we have had to use it)

credit card £6,267.17 (paying £270 per month, taking 3 years to pay back and not using it!)

savings £70.00 in one account, and £2300 in another



Can anyone give me any advise or reassurance???

Northernbird_2

Someone will be along who is better at this than me (!), but a few things stick out:

Insurance - £101.27 - what is this for?

Phone/broadband - £200 - wow! This seems really high. Can you break this down further into mobile, landline, broadband?

Water - this seems high. Are you on a meter?

Buildings insurance - does this include contents? Have you looked around for the cheapest?

What about other expenses? Haircuts, dentist, emergencies, birthdays etc?

Is the CC on a 0% deal? May be worth using your savings to bring this down if not. What about your overdraft? Could you get an egg card perhaps and shift the overdraft on to the card to get 0%?

Just some thoughts...

redballoon_2

insurance is for three vehicles (2 cars and one motorbike)

phone - includes two mobiles, landline £33 and broadband £14.99

Water - not too sure how much this will be really as we haven't had the house long (about 10 months) no, its not a meter

buildings insurance - just buildings, had to have it with mortgage, it's up for renewal soon so will shop around and need to sort out contents as well.

need to check on rates on credit card....

havent thought about emergencies and birthdays etc... we dont have to spend that much for presents as we've stopped doing it for friends and just buy a token gift for parents and our two neices. i guess this will come out of the remaining each month

redballoon_2

I have just gone on to uswitch and going to change phone supplier from Tescos to primus!

nadnad

your mobile phone bills must be huge!!! £150 a month = £75 each - what on earth do you use them that much for. If you're seriously trying to start cutting back then thats the first thing you should be cutting down on - at least by half.

your buildings insurance seems high. i have buildings and contents for £20 a month. you must get yourself contents insurance - what if your house burnt down - you'd have nothing, its a false economy not to have it.

£90 a month for food - thats really good per month. HOwever do you ever eat out? takeaways? if you do you need to write that down.

you mention petrol but haven't budgeted for maintenance costs which I know is difficult - but with 3 vehicles you really should - even if you only take how much a service once a year is for them and add it up divide by 12 and have that much per month set aside.

on the subject of vehicles - do you really need the motorcycle?

you need to find out the APR on the credit card - do it today, because if its not 0% its costing you a fortune and you would need it shifted asap.

if the credit card isn't 0% then I would take the savings and pay the £2300 off the credit card - even if you apply for 0% today it'll take a while to get it transferred.

if it is 0% then I would pay the savings off the overdraft. that will be a psychological benefit - because you'll be left with only one debt and it will seem a lot easier then to focus all you attention on that.

you have £500 left over each month - I would take even £230 out of this and throw it at the credit card that together with the £270 means you are paying £500 a month and will be debt free within a year.

a baby costs a lot of money - as I'm sure you're aware and you don't want the added pressure of having debt to contend with as well - especially as you're in a pretty good position where you can clear the debt - just think even if you got pregnant right now - then by the time the babies born you would only have about 3 months left of paying the CC.

if you cut back on other things - ie the mobile phones and got rid of the bike you would be able to pay even more off the CC, throw everything you have at it and it'll be gone.

i don't know if you get full pay whilst on maternity leave? if you don't then getting used to the £100 a week maternity pay takes some getting used to and if thats the case you definitely wouldn't want the cc debt looming over you.

Aside from all that - you are both earning a pretty good wage and once the CC is paid off you'll have over £700 spare each month which you can save, and thats a very good position to be in.

Kevicho

redballoon wrote:

currently have overdraft of £1821.94 (limit is £2000) (hubby been out of work for awhile so we have had to use it)

credit card £6,267.17 (paying £270 per month, taking 3 years to pay back and not using it!)

savings £70.00 in one account, and £2300 in another

What are the aprs on these debts?

You (usually) will a lot be better off putting all those savings onto paying off a chunk of the credit card

If you have 500 (although your figures show almost 800) why are you only paying off 270? Id suggest putting as much as you can towards paying off the CC and it could take 8-9 months to pay off (at 500 quid a month + the savings), and when you compare that to 3 years then there is not contest

redballoon_2

phew!! thanks for typing all that out for me!!

The motorcycle is staying, and thats that. it's hubbys and he rewarded himseld that after a court settlement he won. i would like to sell it but i dont get anywhere with it!!

i will certainly look at buildings and contents this year, its just one thing i havent got round to doing yet, i know, i know, there is no excuse and i will aim to do that this week.

we have started to cut back on the phone bills, i have now switched landline provider. its the mobile line rentals that are quite high, we are using them at a miniumum now so hopefully that will come down.

£90 for food i am pleased with, occasionally its slightly more but others slightly less so its swings and roundabouts. we dont go out to resturants and we dont have takeaways! we go round to parents quite often to be fed as well!!!

the maintance costs for vehicles is low for us as hubby is a painter and knows people who can do us favours and he can fix problems as well! (he does sometimes do extra work on the side which i am going to get him to do more often now and that can go towards the cc)

i get full pay maternity for 6 months then half pay for 6 months thats if i come back to work. if i decide not to return then its different and i would end up paying some back to them.

i am certainly keen on paying 500 at the cc every month to clear in a year!!!!
that will have to start in a few months tho after clearing the overdraft with the remainder each month so not touching the savings. the savings we dont want to touch but start building up once the credit card is gone!!!

thanks

earwig

hi you can never aford a baby they cost so much over a life time but so many of us on here have debt bigger than yours and income less than your and manage the trick is to give a baby/child what it needs money wise not what it wants if you can rember this rule and stick to then you should be able to treat your child to something like a new toy ect every now and again

but they do say that over a childs life they will cost over a hundred thousand pounds which to be honest if i sat and thought about it i could never aford my two so long as you have enough cash for the basics then you should be ok buy a second hand cot but not matress ect make sure thats new consdier cheeper brands rather than mother care i brought my son three cot blankets from wilksons for the same price as one mothercare blanket and i have just sold them on ebay along with some other baby stuff which i will use the money to go toward upgrading him from cot to bed so if you are savy enough it shouldnt be to bad im sure that some more people will be a long to help you save more money of your buget good luck with it all

redballoon_2

p.s if we pay 500.00 at the cc, we are left with 270.00 to put either more towards the credit card or into savings or half and half!

beanielou

You are in a lucky position of not having a lot of debt & having a lot of free money each month to throw to it.
Great idea to be debt free before you start thinking about the patter of little feet.

Kevicho

Rules of paying off debt 101

1) Savings are useless when you have debt because they are earning you less interest
*note* If you are uncomfortable with having no savings then save a hundred or two in reserve for emergencies only, that 2000 will be better used to clear of that amount of debt, saving you lots of £££s on interest

2) Pay off the credit card first, this is for a number of reasons
a) The Interest is usually 5-6 times higher than that on an overdraft
b) Your credit report is better if you have less debt on cards
c)The longer you leave the cc the more money you GIVE the bank
d) I could probably think of more but im really tired today :S

Fundamentally what im saving is you will be a lot better off if you throw as much of the savings and pay off the credit card first as it is always better to pay off the highest interest card in cases like this