Do I need to be debt free and have an emergency saving allowance before overpaying

moneysavermum_2

I have been overpaying for some time just £200 a month, whilst also repaying a car loan and credit cards. Do i need to get these paid off and have an emergency allowance before overpaying. I currently have £400 left after everything is budgeted for.

I already pay credit card by £100 and £200 other card both 0%

My car loan ends January 2013.

My aim was to clear the creditcards before the 0% ends. Then save for emergency fund of say £5000 and then really max out my mortgage free savings when car loan is finished. However I am currently on Nationwides 2.5% bmr. Am I heading in the right direction?

getmore4less

Stop overpaying the CC save the money to pay off at the end.

Look for savings over 3.125%. rather than the 2.5% mortgage.

Some monthly savers are over this.
ISA, here is one look for others
http://www.barclays.co.uk/Savings/ISAs/CashISAGoldenISAIssue3/P1242580433210

I would still get the emergency fund upt to target even if the savings rates are not quite there.

lincoln-potter

It depends what you feel most comfortable with, gm4l is right as thats the best way to get the most from your cash, but personalyl I always like to know I am not in debt and then like the feeling and security of making OP's.

Everybody is different and it depends how far you are wanting to stretch your money.

moneysavermum_2

Thankyou
I will now pay minimum on credit cards and put that money into the barclays isa issue 3 in april and any other monies left.

At the moment I pay:
mortgage overpay £200 as only on 2.5bmr
car loan end january 2013
childcare
council tax
electric
gas
water
mobile
life insurance
xmas saving
car maintenance
childcare for holidays
extras
savings to isa( shall put spare monies and cc overpayments)

Thankyou once again for helping me in your reply

getmore4less

Barclays issue 3 ws just an example there might be better options out there.

remember you can only put in £5100 so if you take some out and put it back it count towards the total twice.

moneysavermum_2

I bank with barclays and so it would work out to have the issue 3. I would need to access the monies in April 2012 as one of the creditcards ends in April and the other September 2012.

I could wait till the end of next tax year to take some out and then restart isa 2012-2013 with one I wouldnt touch

getmore4less

OK, real easy to do then, they also have an on-line monthly saver we use both.

moneysavermum_2

I have opened a regular saver for expenses like xmas/car expenses and set up direct debit £250 month to go there, as this monies I will probably needin December/January.

I will arrange on 6th April for cash isa and will set up direct debit for £425 to go there a month. This I will use in April to clear credit card balance for 0% which will be due to end. I usually get a £1000 xmas work bonus on top of wages so will overpay that this year.


I am overpaying £200 month as a regular monthly direct debit to my mortgage but does it make a difference to pay off lump sums or is it best to save less a month into an isa paying 3.25% and increase overpayment. My mortgage is 2.5% BMR

I have only £250 saved at the moment , so hardly the big saver yet. But have managed to make headway with overpayments on mortgage.

moneysavermum_2

CALCULATOR STATES: Current overpayment £203


Years Without With overpayment
0 96,000 96,000
1 92,535 90,101
2 88,978 84,043
3 85,325 77,823
4 81,574 71,437
5 77,723 64,879
6 73,768 58,146
7 69,708 51,232
8 65,539 44,134
9 61,258 36,844
10 56,862 29,360
11 52,349 21,675
12 47,715 13,784
13 42,956 5,682

moneysavermum_2

with £300 month overpayment


Years Without With overpayment
0 96,000 96,000
1 92,535 88,883
2 88,978 81,576
3 85,325 74,073
4 81,574 66,368
5 77,723 58,458
6 73,768 50,335
7 69,708 41,995
8 65,539 33,431
9 61,258 24,638
10 56,862 15,609
11 52,349 6,338