£3,337.97 is the Magic Number!

JoKay_2

Hello all

I've decided to start a thread to help keep me focussed on finally get rid of our credit card debt, so here, in a nutshell, is my story:

Approx 7-8 years ago, my OH decided he wanted a motorbike so we opened a credit card account and bought one - and since then we've not once been debt free, even though he sold the motorbike after about 6 months.

Over the years, we've spent more than we've earned, :eek:, getting into overdrafts, then transferring them onto 0% credit cards but without anything to really show for it - not major holidays or super dooper TVs etc, but have always been in a position to pay over and above the minimum payments.

My OH secured a permanent job last year, and a promotion, so we're now in the best place financially we've ever been in, and things are looking up :beer: so we need to get rid of this debt once and for all. However, I'm reluctant to pay the maximum we can each moth because

a) we both work in the public sector, so don't know whether or not we'll have a job this time next year, or the year after that
and
b) my OH has a company car, with no guarantee that he'll get another one when his current lease comes up in September, meaning we may need to get another car.

So my plan of action is:

1 - pay £100 per month off the credit card

2 - pay between £400 and £600 pm (depending on other outgoings - I can predict fairly accurately with my spreadsheet!!) into my ISA, with a view to saving sufficient monies to either make a large deposit on a car in Sept if necessary or to pay off the CC next December (2011).

Does anyone have a view on that plan? My thinking is that it keeps our money accessible if needed, reducing / eliminating the need to take on a loan if we need to buy a car, but if a car is not needed, then we have the money to pay the CC off completely (bearing in mind it will be down to £2100 by then anyway).

The second phase of my plan is to make small payments over and above - kind of in the spirit of the PAD thread - out of our weekly money that we use for grocery and entertainment, which is currently £120 per week. So, for example, I saved £7 something on my grocery shop on Saturday - I've put the actual amount to one side and plan to pay it into the bank then off the CC. Also, my OH has not taken out his £10 'bunce money' (as we call it!), so that will also be paid off - so there's £17 from nowhere!!

So there's my cunning plan - I'll update as I go along..!! :T

JoKay_2

What a result - just realised that I have £650 saved already, so that leaves another £2687.97 to save - will go update my signature!

BadgerFace_2

Unless you have the card on 0%, then you should be ploughing your money into the card, as it will be costing significantly more in interest than you could earn from the savings.

JoKay_2

Hi Badgerface, thanks for your comment - yes, it is on 0%, which is due to expire in February - my current thinking is that I will move to another one, which is likely to cost c. £150 in transfer fees.

Whilst I'm not keen on incurring any interest / fees, I do need to bear in mind that I might end up having to pay interest on a loan, if its needed, in September, if we have to buy another car, so would rather keep my savings liquid until then (although, as you rightly point out, the interest is negligible!!)

Its 6 of one, half a dozen of the other, isn't i!

JoKay_2

Just transferred the £10 money my OH didn't take out of the bank this week into the CC account, and have put the £7.26 in a safe place to pay into the bank on Saturday.

I've also just found a Boots £5 off skincare voucher, and am delighted to see that Sanctuary skin care is on it - I've read on another forum here that the cleanser is worth trying, so that'll save another £5 I would otherwise have spent!

Sooo, have paid off £10 with the potential of another £12.26 on Saturday! This can get a bit addictive, can't it...!

JoKay_2

What a result! I've been looking round the house for a small purse I knew I had so I could put the money I need to pay into the bank (to then pay off the credit card) and found exactly the one I was looking for - with £5.90 in it... guess where that's going!!

Not a bad start - lets hope I can keep it up! :money:

JoKay_2

Quick update - I had £10 left out of the £120 weekly spend, plus the £7.26 that I put to one side out from my savings at Tesco. This does give me some confidence, as I am slowly reducing the amount available over the next few months, down to £90 per week, so I think it can be done!

So - total overpayments this week (once money banked tomorrow, including Boots £5 saving) = £28.16!!! :j

Woopee, am extremely motivated now!

fizzypops

hi you seem to be doing really well and seem so motivated its great :j

im trying to do the pad too but can only afford about £1.00 a day but it will be great too see all the little £1.00 on my next credit card statement :cool:

will subscribe so i dont lose you and ill pop back again if that ok

xx

JoKay_2

Thanks for your post, fizzipops - I am very motivated at the mo, and long may it continue!

We're off to Starbuck tomorrow so I'm trying to think how I can reduce our spend from £12 - but I really do like the poppy seed & lemon muffins, so I can hardly eat mine and expect OH & DD to go without, can I?!!

ViolaLass

JoKay wrote: »

Whilst I'm not keen on incurring any interest / fees, I do need to bear in mind that I might end up having to pay interest on a loan, if its needed, in September, if we have to buy another car, so would rather keep my savings liquid until then (although, as you rightly point out, the interest is negligible!!)

Why not pay off as much as you can and then get another loan in September if you need to?

fizzypops

JoKay wrote: »

I really do like the poppy seed & lemon muffins, so I can hardly eat mine and expect OH & DD to go without, can I?!!

i would!! :cool:

i love starbucks coffe but havent tried their muffins.