New poster - in need of advice! Full SOA in post

lobsta100

The latest situation on the debts:

HSBC CC (21.9% int): now down to £334 (was £1300 ish)
Virgin CC (0% balance transferred): £5,800 (still have another 13 months at 0%)
Overdraft (arranged on current a/c): £822

I worked out that with regular income and outgoings I should be pretty much level each month with a tiny bit of surplus. However, I assume its better to get out of overdraft first to prevent us fluctuating forever back into the o/d each month?

Our only savings are now in the £10k bond that matures in April this year.

Looking for some advice on what it should be used for? How much should I keep as emergency savings? Should I just pay off the whole CC? Or use to overpay on the mortgage (Interest only at 2.5% but whole of capital remaining)?

Any advice is as always appreciated!:D

MFWannabe

lobsta100 wrote: »

The latest situation on the debts:

HSBC CC (21.9% int): now down to £334 (was £1300 ish)
Virgin CC (0% balance transferred): £5,800 (still have another 13 months at 0%)
Overdraft (arranged on current a/c): £822

I worked out that with regular income and outgoings I should be pretty much level each month with a tiny bit of surplus. However, I assume its better to get out of overdraft first to prevent us fluctuating forever back into the o/d each month?

Our only savings are now in the £10k bond that matures in April this year.

Looking for some advice on what it should be used for? How much should I keep as emergency savings? Should I just pay off the whole CC? Or use to overpay on the mortgage (Interest only at 2.5% but whole of capital remaining)?

Any advice is as always appreciated!:D

If it were me i would pay off the credit card and overdraft and keep the remainder in savings for a bit of a buffer so that i wouldn't have to use credit cards or overdraft again if something went wrong with the car, household appliances etc.
You could overpay on your mortgage when your salary increases?

Ian5

I also feel that you should reduce your charity donations to zero at the moment. As you can not afford to give this right now. Can I suggest talking to your synagogue (I assume that the donation is through them) about options. My own suggestion would be to defer payment until post qualification and then pay the amount outstanding + 10% extra as interest and as a thank you.

Charity is for when you are in a financial position to support this, so you must also stop spending money on pleasure (going out; entertaining; eating expensive foods; etc.) during this time (Beans on toast for tea twice a week is cheap), and use the savings you make from this to pay off your debts and get yourselves back into a financial situation when you can sustain charitable donation.

runninglea

Use your bond to pay off the debts but if the c/c is on 0% then you could put the money in an account earing interest until the month before the 0% runns out.

Also is the wage increase guaranteed?

As for the car is there any final payment due when the HP runs out? Sometimes there is 3-4K that needs to be paid.

[Deleted User]

lobsta100 wrote: »

The latest situation on the debts:

HSBC CC (21.9% int): now down to £334 (was £1300 ish)
Virgin CC (0% balance transferred): £5,800 (still have another 13 months at 0%)
Overdraft (arranged on current a/c): £822

I worked out that with regular income and outgoings I should be pretty much level each month with a tiny bit of surplus. However, I assume its better to get out of overdraft first to prevent us fluctuating forever back into the o/d each month?

Our only savings are now in the £10k bond that matures in April this year.

Looking for some advice on what it should be used for? How much should I keep as emergency savings? Should I just pay off the whole CC? Or use to overpay on the mortgage (Interest only at 2.5% but whole of capital remaining)?

Any advice is as always appreciated!:D

Clear the CC you are being charged interest on and o/d. The month before the 0% period ends on the other CC pay it off in full.

Then you can start using the extra cash at the end of the month to build up your savings again

lobsta100

runninglea wrote: »

Use your bond to pay off the debts but if the c/c is on 0% then you could put the money in an account earing interest until the month before the 0% runns out.

Also is the wage increase guaranteed?

As for the car is there any final payment due when the HP runs out? Sometimes there is 3-4K that needs to be paid.

Thanks for the advice! Is a good plan to hold off the surplus in an interest-bearing a/c to pay off the 0% card.

The wage increase is guaranteed to be to minimum of £43k as that is what qualified colleagues are on and if I move companies is likely to be more.

The car has no final balloon payment - the full cost will be paid at the end of the HP term

tootallulah

I followed your thread on mfw and just wanted to say good luck and congratulations for getting your finances sorted whilst you are young and in a position to get everything you want and need. My view is that you should pay off your debts as suggested here taking full advantage of the 0% deal you have. Then save rather than overpay your mortgage because you are going to need a down payment for a bigger property and if push comes to shove and you can't sell your flat you will be able to rent it out AND have a second property to live in. If the rates make your mortgage difficult you will have a large lump sum to pay it down. It will be your decision when to sell the flat. Someone on here also said that you should really enjoy your family whilst they are young which I really agree with, they are small for so short a time. You are not in a terrible position you just need to take action, which you are doing.

lobsta100

tootallulah wrote: »

I followed your thread on mfw and just wanted to say good luck and congratulations for getting your finances sorted whilst you are young and in a position to get everything you want and need. My view is that you should pay off your debts as suggested here taking full advantage of the 0% deal you have. Then save rather than overpay your mortgage because you are going to need a down payment for a bigger property and if push comes to shove and you can't sell your flat you will be able to rent it out AND have a second property to live in. If the rates make your mortgage difficult you will have a large lump sum to pay it down. It will be your decision when to sell the flat. Someone on here also said that you should really enjoy your family whilst they are young which I really agree with, they are small for so short a time. You are not in a terrible position you just need to take action, which you are doing.

Thanks so much for your reply!

I am currently overpaying about £150/month into the mortgage, which is going to barely make a dent. However, when the £10k in the bond finally becomes available in april, I am looking forward to using it to hopefully put us in a position where we can even stay in positive figures in our account for a whole month! I think on regular inflows and outflows we are currently above even - so it would be at least a psychological boost to have a starting position each month that isnt already in overdraft!

We will try and sit it out in our flat as long as possible but it really is very small and PG once the new baby comes, it will only be a matter of time before it becomes difficult to stay here - then I dont know what will happen!