Dfw noobie with a question

Cragglemiester

Hi all new to the forum and decided time to become debt free.
I have 1300 on high interest cc and a 6k loan balance at the moment. My credit report is all green apart from a o2 default ( that's another story) so balance transfers are declined. I'm due to get a bonus in may making my gross salary for the month to be £6033.83 whoop! I want to apply my surplus to my debts but am unsure what my net figure will be. My tax code is 647L if that makes a difference. I used a tax calculator and it came out to be £4284.19. Does this sound about right? Can anyone help as I want to prepare how I should use these funds to aid clearing my debts.
Thanks in advance

bargainbetty

Hi Craggle,

Not knowing what your usual salary is, I can only say that the figure sounds about right! You usually lose about 25% in tax and NI, but over £36K p.a. in earnings is a bit different.

Throw everything at your high interest CC. The loan is fixed, so not much to gain, but if you can avoid racking up any more interest charges, that would be best.

Congrats on the bonus, and good luck on becoming DF.

RAS

Clear the high interest CC.

You need to read the loan document to find out if there are any early redemption penalties and if paying a lump sum has any impact on hat you pay back over the loan period.

Tixy

Depends on how much your salary is.

Its a bit complex to work out what you'll actually get extra that month, as for that month some of your bonus will be taxed at 40%, but if you are not normally a 40% tax payer then in future months you'll pay slightly less tax so that over the year it will have corrected itself.

If you can say your normal monthly salary then we can work it out.

Cragglemiester

Thank you for the prompt replies. I earn 21500 per annum which normally equates
to £ 1396.83 per month

I'm going to clear the cc and make an overpayment on the loan as there are no penalties plus I'm currently overpaying it by £50 per month at the moment.

Tixy

You'll get about £4038 extra net in May, getting around £5345 in total.
But in future months you should find that you pay slightly less tax so in June & July etc you'll actually get net pay slightly more than the £1396 you usually get.

Good news though - that will be a huge boost to your debt busting.

Cragglemiester

Sorry the 6033.83 is all incl my monthly gross. To explain my bonus is 19.73% of my annual salary so I worked that out to be 4241.95 and added my normal gross salary to bring it up to that final fig of 6033.83.

So on that basis I should clear approx 4038 for that month?

Thanks again for your help and support guys. Really good of you.

Tixy

Okay well in that case you'll get about £4070 total net next month rather than your normal amount (give or take a couple of pounds!)

Nice bonus still!

Cragglemiester

I'm not going to complain lol. Thank you guys thy really helped me plan.