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

Annie_Fanny

Redballoon - What are the aprs on the cc and overdraft? This information is absolutely crucial for us guys to give you an informed decision.

Also have you read this excellent article written by Martin Lewis himself which may persuade you to pay off those debts with your savings. Puts everything into perspective...

http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1103213261,45760,

Good luck!

Annie

Kevicho

redballoon wrote:

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!

From experience (and read my thread on snowballing) it is always better to pay off credit cards first, work out a minimum payment for the overdraft (some thing like the interest you are paying) so then that stays steady, and then whack all the available money towards the credit card.

This is the most evil thing in your life at the moment, the other good thing is once you have the credit card to a reasonable amount you should be able to do a balance transfer to a 0% (bbalance transfer card) and save more money that way (if you have too much already on a card then this type of application is less likely to be accepted by the credit card companies)

Kevicho

Just done a quick proper look at your speadsheet and come up with
Expense amount revised
council tax £107.00 107
insurance £101.27 101.27 (ive left this but do you need this)
gas and electric £45.00 45
water £70.00 70
phone/broadband £200.00 200 (ive left this but you should look at ways to cut this back)
buildings ins £32.02 32.03
food £90.00 90
petrol £150.00 150
savings £160.00 (scrap this until debt is repaid - savings are pointless while you have debt)
mortgage £398.63 398.63
dvd rental £7.99 7.99 (ive left this has people need some entertainment)
tv licence £10.54 10.54
credit card £270.00 (left this out for obvious reasons to follow)
Total 1212.46

Your total monthly spend is £1212 a month
and you get paid £2413

That leaves you with 1200.54 for debt repayment

Currently savings wise you have
savings 1 70
savings 1 2300

and debts

Bank 1821.94
Credit card 6267.17
Which total 8089.11

Now if we use your savings to pay off a huge chunk of the credit card we are left with Credit care balance of 3897.17 (already looks so much better)

Now if we set an aggressive Payment Reschedule (such as the one below)
Payments 100
Credit 1100

You can see within 4 months! we can have that credit card clear and also another 2-3 months to sort the overdraft.

So in 7 months time we have the ability to put up to 1200 back into the savings

Compared to some that is a very quick way to clear the debt

kar

Kevicho is completely right redballoon effectively you are loosing money on your savings as you are paying much more in interest for your CC's and o/d than you will ever earn from a savings acount.

Kevicho

The thing with savings also is that with inflation, we are already loosing money! So this is a double whammy :S

nadnad

yeah i would go with Kevicho - theres no point in you having savings when you have debt. i understand that savings are crucial to some people as it makes you "feel" better, but really with the choice being no debt or some useless "savings" i would take the no debt - and its only for a short time - cos when that card is paid off you can start saving straight away.

redballoon_2

sorry i have made a mistake, our salary is 2143 not 2413, but still leaves us 930.00 left over per month.

can you talk me through the "aggressive Payment Reschedule " i dont follow you.

Kevicho

you simply pay (on the example above) 1000 a month towards the credit card and a hundred towards the overdraft, until the credit card is paid off, then you put the money you were using to pay off the credit card towards paying off the overdraft

Although it will be 800 towards credit card a month now, the principle is still the same

Kevicho

When i say agressive, i mean literally whack every spare penny you can muster to pay off the debt, you will also probably have more spare money each months if you can get better value for some of your outgoings (especially the phones)

redballoon_2

ok, thanks for clearing that up for me!
yes i certainly feel happier about it all now,
i am thinking of clearing my overdraft off first as i want to claim back bank charges of £650