Newbie

CLAPTON

living at home is a wonderful opportunity to clear all debts and start serious saving...never again will you be able to live as cheaply.

make a few resolutions

a. never ever owe money to catalogues, always pay off fully each month..they always charge rediculous rates of interest

b. do you know that for a normal credit card, if you simply pay the minimum payment each month it will take you between 10 and 15 years to clear the debt...all this time you are paying them interest.
in any event you can clear your card now from your savings.
Once clear change the DD to pay the full amount off each month so you get out of the habit of always paying the minimum. think of a cc as a convenient ways of paying and not as a way of borrowing money.

c. resolve to find out where your 'spare' money actually goes... you seem to have about 300 per month unaccounted for... if you could find half of this you could clear your egg loan in half the time.
so start a spending diary
budget properly for MOT, car tax, repairs and servicing, presents, holidays etc. (obviously you will have to estimate these but it gives you an insight into where your money really goes.)

d.start looking at savings accounts, and open an ISA which is tax free. also look at internet saving a/cs as they usually pay good rates of interest and you can move your money around online very easily....maybe even your bank may have an esaver at a decent rate and anyway better than keeping it in a current account.

o_Looby_o

Iona_Penny wrote:

Hi there! You really have to see that you must use some savings to pay off as much debt as you can..def the egg cc and tha catalogue debt; just curious where the money in these savings comes from as it does not appear to be in your monthly budget? According to your figures you have £280 a month to be using to pay off your debts so your situation should be easily managed. Well done you for recognising you have debt and wanting to address it while it's all still relatively straightforward.

Hi

That's what I forgot!

For my savings - The £2000.00 was a payout from a previous job, which I didn't spend and just shoved into a bank account.

The other amount is just what i manage to stuff away each month. Just before I get paid, I put away whatever is left in my bank account (which normally is not a large amount) and that is what it has gotten to.

My worst thing is paying off debts, it is like I have a fear of it. This is going to sound very petty but when I have savings I will just keep it as savings cos when I look at it, Im proud of myself and rich(ish) (LOL it does sound stupid). So my credit card kind of gets left and forgotten about, because I think 'oh there isnt a lot on there'

Im sorry if I seem niave. I know I need to change my way of thinking

Thank you all so much for your time though, its really nice of you all

o_Looby_o

CLAPTON wrote:

living at home is a wonderful opportunity to clear all debts and start serious saving...never again will you be able to live as cheaply.

make a few resolutions

a. never ever owe money to catalogues, always pay off fully each month..they always charge rediculous rates of interest
I only realised the interest rate they charged last night when I looked, I was so shocked!

b. do you know that for a normal credit card, if you simply pay the minimum payment each month it will take you between 10 and 15 years to clear the debt...all this time you are paying them interest.
in any event you can clear your card now from your savings.
Once clear change the DD to pay the full amount off each month so you get out of the habit of always paying the minimum. think of a cc as a convenient ways of paying and not as a way of borrowing money.
I didnt realise it would take *that* much longer just paying the min payment.. Really the best thing to do is pay off the credit card completely?

c. resolve to find out where your 'spare' money actually goes... you seem to have about 300 per month unaccounted for... if you could find half of this you could clear your egg loan in half the time.
so start a spending diary
budget properly for MOT, car tax, repairs and servicing, presents, holidays etc. (obviously you will have to estimate these but it gives you an insight into where your money really goes.)

Thats a really good idea, thank you. I never thought of it that way and will help me keep an eye on what is going out of my bank account

d.start looking at savings accounts, and open an ISA which is tax free. also look at internet saving a/cs as they usually pay good rates of interest and you can move your money around online very easily....maybe even your bank may have an esaver at a decent rate and anyway better than keeping it in a current account
I thought to get a higher interest account I would need a high amount in my savings, so I didnt think I had enough to qualify

Also - Another question if I may ask.

I have tried looking in my Egg loan T&C and can't find anything about it. I know I can repay the loan early in its full amount, but I dont know if I can increase the payments and reduce the term its on. I have tried calling them but they never seem to answer the telephone.

I just wondered whether I could increase the payments through them directly, or keep paying off the same amount every month with them and put a bit extra away in a savings account (to then pay off early)

If that make sense?!

Molanole

Hi there

With Egg I've always found them really easy to get hold of. They've also been very helpful with arranging for longer/shorter terms, increased payments, one of payments etc etc. I think you have to have been paying them back for at least six payments though.

I'm afraid I'm going to echo what the other posters have said. There really is very little point in having catalogue debts at stupid percent APR but also having savings too. BUT, if you really are adamant that you want to continue to have savings then please please please make it work a bit harder for you but putting into a decent savings account with a nice high APR. Just sitting in a bod standard account it really will be of no benefit, especially as you say:

o_Looby_o wrote:

£2000.00 in one account - In just a normal bank account (not high interest or anything) I dont tend to touch this - ever!

You've got your other savings for the big one off purchases anyway

A spending diary is also a fantastic way of keeping tabs on your outgoings. Within a couple of months you'll know how much you fritter away and will be able to adjust your budget accordingly. Not a criticism, we've all been there! That's why we're all here on this board!! :rolleyes:

Welcome to DFW! and Good Luck!!

CLAPTON

best to speak to egg about the loan but looking at their website their loans look very flexible, you can over pay or pay of early, but you need to check this out as your loan may have different T&Cs.

as for saving a/c most online ones give you the full interest rate on as little as a single pound

i would suggest you clear the catalogue and CC first, set up a decent savings account, spend a couple of months with the spending diary and sorting out how much money you really have per month spare then decide on what to do about the loan..

o_Looby_o

Thanks Molanole

And thanks everyone!

You are all right, money sitting in savings is pointless when it can be used to pay off debts.

I have just paid off the catalogue debt! You were all correct, it was only £48.48 and I have the savings for it, so I just called them and cleared it!

It felt good to get rid of it!

Gonna do this spending diary as well.. I just hope I stick to it

Thank you all... x

Iona_Penny

If you dont intend to use the £2000 (and I understand the feeling of security it gives you ) then at least find somewhere to put it (prob and Isa?) where it will be earning a decent rate of interest for you . Please pay off your egg cc and catalogue debt, set yourself a budget and aim to pay off the loan faster; check that you don't have ins on it that you don't need!

o_Looby_o

Iona_Penny - Thanks, and yes, the £2k does give me the feeling of security, I'm going to have a look online today, to see where I can get the best interest deal thing from. Even though all the numbers confuse me! lol

Thank you for your support. I have just paid off the catalogue! I called them up and just paid it all off in one go, cos after doing the SOA I realised just how shockingly bad the APR! it horrified me

LewisC_2

Hi o_Looby_o,

I'm not the best person to ask for advice, as I'm relatively new to this myself, but don't worry about your debt being "too little to worry about" - any debt is too much! I only have £2,000 debt, but want to get this cleared ASAP. I looked on my past statements, and I'm currently paying around £50 per month just in interest. That's £600 per year going down the drain on nothing. I plan to be debt free by 21 (June 2007).

The first step is to cut down your spending. Do you really need that sandwich at lunchtime? Go home and make something for free. Do you really need that pack of chewing gum or that extra pint in the pub? Look after the pennies and the pounds will look after themselves. Don't save any money for now - use it to pay off your credit cards. In savings, you'll be earning a couple of percent interest. Your debts are probably costing you 20-30% interest.

Good luck :-)

o_Looby_o

LewisC wrote:

Hi o_Looby_o,

I'm not the best person to ask for advice, as I'm relatively new to this myself, but don't worry about your debt being "too little to worry about" - any debt is too much! I only have £2,000 debt, but want to get this cleared ASAP. I looked on my past statements, and I'm currently paying around £50 per month just in interest. That's £600 per year going down the drain on nothing. I plan to be debt free by 21 (June 2007).

The first step is to cut down your spending. Do you really need that sandwich at lunchtime? Go home and make something for free. Do you really need that pack of chewing gum or that extra pint in the pub? Look after the pennies and the pounds will look after themselves. Don't save any money for now - use it to pay off your credit cards. In savings, you'll be earning a couple of percent interest. Your debts are probably costing you 20-30% interest.

Good luck :-)

Thanks LewisC

I understand now why the savings don't really mean much at the moment. You are right, I don't earn enough interest on them to make it worth my wild considering I have debts rising quicker than the savings!

I don't tend to spend much money during the week. I already take my own food into work, and I don't really go out a huge amount.

Thanks for your help, It's made me realise a few things. Your a star!