Had some good luck need help with next steps please

sharronej

Hi all,


I've had a couple of very good strokes of luck lately - after a visit to my bank they persuaded me to try for a 0% card for 18 months (I was sure my credit rating was so low they'd say no) and I was accepted and given £10,500.00 Barclay's then offered me £7400 on 0% for 24 months - this has meant I have transferred all our credit card debt onto these two cards saving £240 per month interest. The success of this coupled with the very real prospect of being able to get control of the debt and being able to see the light at the end of the tunnel has had a huge affect on me. I actually couldn't stop crying for a couple of days and still feel very emotional - I think it's stress and relief all at the same time The other good news is that both mine and my husbands businesses have taken an upturn giving us considerably more money each month - this is also fantastic news and I'm very, very grateful.

Our daughter is at University and she sends her loan/grant money to me to 'feed' back to her, now what I was doing (with her knowledge and blessing) was paying her lump sum off a credit card and then paying her out of my budget however now I've got everything on 0% my attention turns to our Bank loan (outstanding £3600) I telephoned today and I can't make extra payments so I'll put DD's money in a saving account until I've saved some extra up to finish the loan - if I really put my mind to it I should be able to clear it by January.

The problem? (If you're still with me ) is that I am really fighting the urge to take a breather from all the money worries and perhaps order the DG we desperately need or buy a new carpet or replace my sons bed etc etc etc. We've always had a fairly tight budget but our LBM came two years ago when I discovered a huge amount of debt that DH had run up, it's been a really hard slog and I don't want to fall now. So what would you do? Can any of you help inspire me to take a deep breath and sort the bank loan out? It'll free up £250 pcm which is not to be sneezed at! There's no point asking DH because he won't have anything to do with any financial decisions.

I really would like to hear your opinions (as long as they're polite that is :rotfl:)

Tixy

Now everything is 0% how much extra should you be able to save each month towards the loan fund? how much is outstanding on the loan and how much do you currently pay each month?
I suppose what I'm asking is how many months of saving to be able to pay off the loan?

Aside from those - do you expect the other cards to be cleared by the time the 0%s eventually end? or will there still be balances that you'll need to transfer or pay off?

Happytogetdebtfree

I would say half the payments one into savings for loan clearning and rest into another pot for housey stuff that way you feel like your still dealing with finances aswell as buying the things you need

sharronej

Thanks for the replies, We are currently paying £505 pcm off the credit cards now to clear it within the 0% time I will have to increase the payments to £800 pcm so I've actually got to significantly increase the payments which feels really scary but it is doable if our new income stays as it is at the moment. If I put DD's Sept and Jan payment aside then I will be able to pay the loan off in January 2012 (i'll have to add about £500 to it so it could be February).

My Double Glazing will last through this winter but not next - the frames are mostly bog now anyway :rotfl: I think the bigger urge for me is to get my son his new bed and I know I could order it on credit but obviously we are all trying to forge new habits so I really don't want to do that! I suspect it's partially guilt at not being able to treat him as much as his friends parents do their children and our holiday this year has been camping in York whereas his friends are all in Spain, Canada etc etc etc (He's 15 and we've never taken our family abroad). Not that I think there's anything wrong with York and I know we're lucky to have had a holiday at all and tbh he doesn't ask for things very often which in a way makes you feel even more guilty!

Happytogetdebtfree that's a good idea perhaps I can factor in DS's bed etc into the budget?

Tixy

Definitely don't get the bed on credit, not only cos its not a good idea financially but because you don't want to go back to that mindset.

Is it a whole new bed he needs? or would a new mattress do? or is the mattres okay but he needs a new frame?
You can pick both up suprisingly cheap if he just needs something fairly basic. And also look on places like ebay to see what bargains are to be had (I picked up a very nice brand new bed frame for a friend for about £30 on ebay, and she bought a mattress in a closing down sale).

Don't get something too comfy mind - it can be hard enough to get teenagers out of bed!

Happytogetdebtfree

Yes i would try doing that .. im 27 and i didnt go abroad till i was 17..... i have no regrets i loved my caravanning holidays its the memories and people not the places :~) your making some r... eally good changes and will be financially free in no time ..... i use the jar system with t harv eker so 55% neccessities, 10% play ( for us to spend in full on ourselves without feeling guilty) 10% financial freedom ( so that could be investments pot isa etc etc stuff that will lead to a passive income..... 10% longtermsavings for you this could be your sons bed and payments towards paying the loan off in full education 10% self help books secret etc etc mike dooley etc .... 5% giving fund that can be where you budget spends for birthdays xmas etc because your giving to someone else.... might be worth a try i guess x

sharronej

He doesn't really NEED a new bed, we bought wallpaper, paint, light shades and curtains etc but haven't actually decorated his room yet because he decided he wanted a double bed and the one he originally saw didn't match the colour scheme but he's since decided to go with the original colours, he would like a double bed and a new carpet and my frame of mind has been edging towards a financial splurge. I think that I will focus on decorating his room this weekend (we have everything so no spend involved) perhaps price up a carpet for him and try to get that and then keep an eye on ebay for a bed - a quick look reveals that I can buy a new one with a mattress for half the price of what I've seen in the shops so if we spend some time looking them I'm sure a bargain will show up! I think this will help me get over the 'need to spend' urge.

One last question would you try and pay off the credit cards in the allotted time or would you keep payments the same and try to get another 0% in the future?

Thanks for helping to keep me grounded!

Firewalker

In this case I would say - stay focused. Continue with the budget (a little celebration may be) and continue snowballing. Put all money that has been released from debt payment back into paying debt. Check the penalties for the loan - if they are higher than the gain just continue paying this one. Focus on reducing the 0% - usually this cards jusm to fairly high interest rate after the 0% deal expires.

Given that your businesses are doing better you can probably keep for spending a bit of the surplus - just to feel that it is all worth it and you are getting somewhere.

Well done but keep focused.

Firewalker

Firewalker

Sorry, missed your last question - yes I will! Your ultimate goal is to get rid of the CC debt so go for it full speed.

Firewalker

Radish72

I would pay off the credit card before the 0% runs out by either

Keep the monthly payments at £505 (is this the minimum) and put the other £295 in a cash ISA, find the one with the most interest

Then this can be used to pay off the credit card when the 0% runs out, but is still available to be used for emergency

What are you doing with the £240/month you are saving with the 0% card?

sharronej

Thanks Fire walker.

Radish 72 - The £240 was the interest I was paying on the CC's. I was paying minimum on some of the cards and extra on one card plus paying a lump sum of £1000 off three times a year. I'm not actually saving any money but my money is being more effective - in fact to pay all this off in the 0% time it will require an extra three hundred and eighty pounds a month (taking my payments up to £885 pcm). If I stick with my plan to pay the loan off in January then this will save £240 that I was paying for the bank loan. The bank won't let me pay any lump sums in so I'm going to ask my M.I.L to keep the cash for me so that we can't dip into it, depending on our finances at that point I would hope to add this figure to the overpayment on the cc's - it's such an uphill battle! Completely overwhelming at times!