What would you do...

weeg

With £210/month, if you were me?

Without going into a full SOA at the moment, the situation is this:

Next month I finish paying off my car loan - £210/month. Obviously I don’t want this money to get spent on beer and take aways.:beer:

I have an egg money card which is sitting at £2100, towards which I pay £300/month. This is what I use for groceries, petrol, eating out and bigger expenses such as car servicing, insurance, holidays and work expenses. Normally I spend about £200 on this a month, but that varies (ie very high last month due to £500 on car plus a trip to London for a wedding)

I have a ‘spare’ current account I almost never use, from RBS. I think I’m about £15 o/d at the momemt.:eek:

Should I
a)plough all the money into egg
b)plough money into RBS, so I’ll have a pot built up for things like servicing and insurance
c) half a and half b
d) something clever I haven’t thought of?

(my only other significant debt at the moment is student loan)

immoral_angeluk

Personally I would stop spending on the card. You're just gaining more and more interest even if you pay what you spend off every month.

Welshlassie

Pay the money towards the debts with the biggest APR to bring this down.
I'm not sure how the Egg Money Accounts work so can't advise further but throwing money at the biggest APR makes the most sense.

CLAPTON

you only seem to have one real debt..the egg money card so its a no brainer to put the money to paying it off (assuming it isn't a 0% or LOB card)

onedayiwill

Pay off egg. Why are you still spending on the card?

art_student

I agree, pay off egg and stop spending on it!

weeg

Umm, I can't stop spending on it, because I have no savings.

So, without savings how else am i supposed to pay for the servicing/MOT on my car? Don't tell me to sell tha car - it's a condition of my employment to have/have access to a car. And the mileage pays most of the running costs.

My employers pay expenses 1 month in arrears with my wages - and I tend not to have enough money lying around in my cuurent account to pay for hotel and restaurant bills for work.

Or, perhaps you don't think the 10% discount on car insurance for paying it upfront is offset by the 3-4 months interest (it is btw)?

If I had savings I wouldn't need the card. But, while I'm paying the card off it seems to make more sense to me to pay as much as I can in every month, and then if I need some of that money back at the end of the month take it back. What am I missing in this scenario?

Welshlassie

What happens to your salary?

Get work to give you a corporate credit card. They can't expect you to incur interest charges and fees to going away for them!! If they want you to travel by car and stay in hotels they should pay for it by invoice direct to the hotel or give you a corporate credit card.

magentadreamer

I think you need to do a SOA then you'll be able to budget better. The £200 from your car loan should be used to pay off the £2K plus you already have on the Egg Card.

Storm

For the annual car expenses such as MOT, Tax, Insurance etc put an amount aside into a separate savings account like an instant access ISA - that way you get interest on the dosh at a decent rate & it's waiting for you when you need it. How much will depend on the age of the car, tax bracket & what your insurance is like, but I put £100 a month into mine, and if there's any 'spare' once the MOT is done in August & insurance in September then I can stop it for a couple of months & put extra towards my debts.

Definitely speak to your work about a corporate credit card, as if you're incurring big amounts of expenses every month then they can't expect you to be put in the position where you're paying interest on it. I normally only have about £30 max expenses per month, but when I had a big one last month (£175) they paid it in 2 week blocks rather than one at the end of the month.

Oh, and if you get paid less than 40p a mile by your work, make sure you claim the difference back from the taxman!

weeg

My salary gets spent on frivoulous things like a mortgage and council tax. Plus feeding and clothing myself. I even have fun occaisionally. Any spare goes to paying off stuff.

My company do not issue credit cards to anyone below partner – which makes about 200 of us in the company which occur expenses. And Life is too damn short to stay in the only hotel near my head office which a) falls into spending limits and b) will allow payment by invoice. If I’m going to be away from home then I want to stay somewhere OK and eat nice food. After all, it isn’t costing me anything! Or it wouldn’t if I reactivated one of my paid-off-so-cut-up cards, and thus cleared it every month. But I’m happier only having 1 card. This is entirely standard practice in my industry.

I really have thought this through, and my debts are heading in the right direction.

(PS sorry if I sound really defensive, I wish I could type in tones of voice!)