The amazing shrinking debt!

dreamdreamer

I've been looking at how to save the £700-£750 a month I'm currently using to repay debts. I'm planning for 3 years ahead (my 30th - my original debt free goal!), and I will start next April (building up an emergency fund and HAVING FUN until then). I'm not keen on investing in shares as don't want the risk.

I've had a look at the Best Savings and ISA articles, and I think my best return would be from doing this:

£445 a month into a 3 year fixed rate ISA with Northern Rock @ 4.25% - after 3 years should be £17,092.
£300 a month into a First Direct Regular Saver in 1st year @ 8% and into a Northern Rock E-Saver in years 2 and 3 @ 3.01%. After 3 years should be £11285.

I want some of the cash to be easy access just in case our world implodes - hence the E-Saver. It works out overall to 3.7% (net) over the 3 year period which seems fairly decent.

Any extra overtime money will be put in a normal online savings account (First Direct e-saver I suppose) which will earn a pittance in interest but will go to big purchases like holidays and appliances that explode and the like. I expect this to get spent as fast as it's earned so the interest is irrelevant to me. If it starts to build up I'll just transfer it across to the NR E-saver.

It's amazing to think that I could have £28k in savings by my original debt free goal! Now I just have to convince OH to do the same...

dreamdreamer

Two pieces of good money news. First of all, discovered I can claim tax relief on washing my work uniform, at £140 a year backdated 6 years. This isn't a refund of £840, rather £840 that should have been tax free and wasn't so I'll get 20% tax back on it - should be £168, better than a kick in the teeth! Thankyou HMRC!

Secondly, and this is looking into the future but this is so great that I was flabbergasted. I was speaking to a colleague who is currently pregnant, who had it quietly proposed to her by another lady that she should do a lot of overtime over the next few months. Turns out that your maternity pay is based on your total PAY in weeks 17-25 of your pregnancy. I assumed it was based on your SALARY, because our total pay includes unsocial hours allowance, and overtime. So basically if you heavily boost your pay in those 8 weeks by doing tonnes of overtime, the maternity pay (which is already very generous, I would get 6 months at 95% salary and 3 months SMP) is based on that massive pay you had for 8 weeks, and not your contracted salary! Utterly bizarre but confirmed to work by a close friend/colleague who has had 2 kids now and has done it both times. The first time around her maternity pay ended up being based on a gross monthly pay of £3760 instead of £2005! Senior manager confirmed with me it's perfectly allowed!

It's not often an employer is overly generous but that will make a big difference when we decide to start a family.

rubywhatashmoo

Wow that is a massive boost for when you're off having babies!! Will have to look into whether they do that at our place - seems unlikely in the NHS though

caledonian_princess

My sister did that with her maternity pay and ended up being better off on SMP than she was on an ordinary month without overtime. It's actually a Government thing - a proper rule (http://www.dwp.gov.uk/publications/specialist-guides/technical-guidance/ni17a-a-guide-to-maternity/statutory-maternity-pay-smp/eligibility/) rather than something your employer may or may not choose to do. My sister's employer didn't actually know about it until she complained that she'd been underpaid SMP - they went off, checked the rules and corrected her payments.

dreamdreamer

Ahhh that explains the generosity, thought it was out if character!!

Ruby I'm in the NHS! But obviously maternity policy varies so do check!

dreamdreamer

Mildly alarmed by my lack of overtime this month, I've got one shift booked and because OH is away monday-friday I'm leaving my weekends free, I only have 2 more days its POSSIBLE to do overtime, which means a maximum of 3 shifts but prob more like 1 or 2... plus I'm so ridiculously busy in June I'm going to struggle to get any then as well, but I'm still on target for Sept so that's what matters, was just hoping to make it August in time for my birthday but we'll see...

Wow that was a long sentence. Where are the full stops when you need them?!

dreamdreamer

Well, I've been naughty. Spent £149 on a new dress, shrug and shoes for the summer ball (OH is in the military). I'll undoubtedly get this back from OH when he comes home from detachment as he always pays for my dresses (apparently it's tradition - love it!) but in the meantime it's set me back in the paying off stakes as it was taken from my loan overpayment fund.

On the plus side... it's reeeeally pretty! Lol.

dreamdreamer

Well, I've been paid, loan payment has gone out, paid a £650 overpayment and my debt is now at £1980 (87.5% paid).

Ended up with 2 shifts overtime in May, so not much of an overpayment next month, which is a bummer so close to the end.

Really hoping my dad musters the £500 he owes me in the next 2 months to clear another chunk. I so want this gone by my birthday at the end of August. I'm really getting sick of the slog now.

dreamdreamer

Hoping for loads of overtime this month as I've put in for 10 shifts!! Hopefully I'll get 3 more to total 6 for June (already done 3 and it's only the 7th!), which would mean an £800 overpayment in July and put my debt on 25th July at... £345!! I really really hope this is the case. It would mean my loan payment + £50 extra on 25th August and that would be the end of it. Please please God get me some of that overtime! :wall:

My parents are coming up for 3 days from tomorrow. I'm trying to think of something cheap and cheerful to do with them on thursday.

dreamdreamer

Well, I got my six overtime shifts for June but I've had a REALLY expensive week, yikes. I think the 2 overtime shifts I did last month are going to be needed to soak up the surplus this month. so that's at least £200 less than I was aiming to be at by the end of July. Hopefully I can pick up another 2 overtime shifts to offset it.

Either way with the overtime I have booked I'll have all this paid off when I get paid on 25th August now. So that's another month shaved off my DFD. I'll update my signature to that just to spur myself on a bit! Just over 2 months to go!