Tell me I'm making the right decision please??!

Just_want_a_house

Trying to keep this fairly short so you dont get bored!!!

Quick background info – Married for nearly 2 yrs, just got first house & mortgage.

Debt – £11,000 Loan, coping ok with repayments but will need to refinance to get better rate in asap. Also paying back part of house deposit to both parents. :eek:

Credit card with £4100 on and credit limit of £8500. 0% balance transfer deal currently on offer until end of May.

4 separate bank accounts with large overdrafts – currently being charged £60 a month in total for the privilege of being in them all month, every month.

Do we balance transfer all our overdraft amounts across to the credit card (0%) and use the extra £60 a month on top of what we already pay - £225 to pay that back? We could clear the debt of £7500 (inc bal transf fees) in 26 months.

We would then in theory, only have the loan (which has just over 3 years left currently) and our mortgage. It would mean being very strict with ourselves (which I am capable of but hubby needs further training) whilst also acutally trying to live a life together.

I fell like I'm a good budgetter but at the moment we are treading water each month very well, but don’t feel like we are moving away from clearing our debts. I have a full time and 2 casual jobs and hubby has a full time job, and we are doing everything in our power to reduce outgoings, food budgets, petrol etc, you name it, we do it! I have done a budget planner on MSE and we are underspending by approx £100 a month so its fairly tight and I will take that on face value at the min. I'm sure I read somewhere off Martin that you should always pay off your hghest % debts first?

And to top it all off, we are trying for a baby (as clock is severely ticking – I am 34 this year!) and we fully understand that if I were lucky enough to fall pregnant our financial circumstances would drastically change, but at least until that happens we would have made a small dent in our credit card debt.

Any comments gratefully received.

Thanks

Moneymash

Loan £11,000
CC £ 4,100
OD £ 3,400
Deposit £?

How much do you owe bank of mum and dad for the house deposit, are they charging interest what is the monthly repayment? Are they able to wait for the money until you have paid back other debts?

How would you do balance transfers of your overdrafts to the 0% cc? if the 0% rate ends in May what will be the APR or will you try to get another 0% card.

Also the £285 repayment you are suggesting on the outstanding CC balance and the additional OD balances is not allowing for interest if you keep the same card.

pumpkinhead456

I don't tend to post on here very often, but I am bored at work and was having a browse, so my tuppence worth...
If you can balance transfer your overdraft (cash transfer - I know Virgin are offering this at the mo on my card) then go for it. Work hard at paying this off.
I currently have a chart on my fridge with a little square for every £50 debt we have on a credit card. Each time we pay off some money the appropriate number of boxes get coloured in green. Having a visual grasp on things make the debts more real, and you can see your achievements.
Personally, I wouldn't pay off an £11k loan by remortgaging (if this was your plan?) as it will reduce your equity in the house and a mortgage is a very expensive form of borrowing over the long term. If you can buy your way out of the loan with a more favourable loan then go for it, if the figures stack up!
And finally, 34 is not that old for having a baby. They cost a fortune too, so why not wait a year or so, get your finances back in order, enjoy living together, then pop out quads

Hope this helps, and if nothing else confirms you are heading on the right track!

FBaby

I can totally understand your feeling that now is the time to have a baby, but you do really need to take into consideration the impact of doing so before clearing up your debts considering how much you have left over at the end of the month when you are both working full-time and more.

You have to consider that whilst on maternity leave, you will have a lot less coming in after a number of month. Will you be prepared to go back to work as soon as your smp is over? If not, how will you fill the gap.

If you decide you don't intend on going back to work full-time, how will you make up the difference for your lost salary? Will you be entitled to tax credits and will that be enough to continue to repay the debt?

If you do return to work, you have to take into factor the cost of childcare unless you are lucky to have family members to look after the baby full-time. You might get some help with costs, but if you are both working full-time, it is likely that with only one baby, you won't be entitled to much, or certainly not most of your childcare costs.

I know that broodiness can take over every sensible considerations and that at 34, you might feel that you are getting old, but the reality is that having a baby when you are struggling with debts is a very stressful situation, one that has challenged many couples. At 34, you are not getting close to being too old to concieve. It might mean it could take a little longer, or might inccur problems if there are some issues, but otherwise, another 2 years won't make you suddenly infertile. If that is a real concern to you, you could always go to your GP and ask for some basic tests that will not confirm you are definitely fertile, but will give some idea of your chances, same with your partner.

Just_want_a_house

Hello,

Thanks for responding

* Owe Mum & Dads (both sets) £6300 in total. No interest being charged bless them. Agreed to pay back £350 in total a month which we started 2 months ago. Want to get it paid back asap as parents are in late 60's and have no other savings so feel we owe it them back asap. They dont know about our financial situation as we have never told them, dont feel they need to know the full extent at the min, very shamed about being in debt etc. I hated the thought of borrowing from them initially but they offered etc.

* Current Virgin CC has got a long 0% (cant remember off the top of my head but think it was originally 20 months and we're now about 5 months into it) so would plan on putting the o/d's on it. When the 0% is due to end we will shift to another 0%, we realise this will incur a fee but again, a bit more of the debt will have been paid so less of an amount to transfer.

*Defo wouldnt put loan on mortgage, will just aim to get a better % rate as currently high.

* Not focusing massively on the trying part :rotfl:but will just see what happens!

Hovel_lady

Might be worth posting a SOA (statement of affairs) so people can help further...

http://makesenseofcards.com/soacalc.html