Driving Down Debt

ThatKiss

Just a quick check in. September wasn't as expensive as I'd thought but I had to put a couple of travel expenses on credit cards, which I then paid off in October, which led to that being tight!

Back on an even keel, though, and I didn't need to raid the debt busting account so will be able to pay the first £500 overpayment this month. Unfortunately haven't been able to boost payments to the savings accounts in the past two months, but no worse off.

Had a bit if a change in circumstance at the 9-5 which means I'm no longer on the on call rota. It's paid in arrears so one more payday before that reduction kicks in. We'll see how that goes, but I'm going to sit down today and see if there are any spending cuts I can make elsewhere to soften the blow.

ThatKiss

I really need to find the motivation to sit down and get YNAB set up again, and decide how best to tackle the debt.

At the moment I have so many goals, that I'm struggling to prioritise them:

• credit card
• emergency fund
• house deposit
• repairs to the classic

I've currently got two savings accounts set up; one is for any overtime I do at work and additional income, which acts as a temporary emergency fund, and is then put towards the credit card when it reaches £500.

The other is a larger fund which is currently acting as an emergency fund, and earmarked as either/both of deposit and car repairs.

At present, any slush at the end of the month is split between the two savings account, however in line with the YNAB philosophy of every £ having a job, I feel like I should be allocating more accurately at the start of the month, and paying more into the credit card and savings.

Here's where I'm not sure what to do. Slush has been ranging between a few pounds and a few hundred pounds, there doesn't seem to be a pattern.

So, do I up credit card payments directly, or allocate the additional I'd like to pay there to the savings accounts where I can pull it back if needed? Or is it simply a case of becoming better at budgeting so it's not (so) variable? I'm just not sure!

This thinking comes from looking round and seeing people with more debt and lower income than myself, absolutely smashing those debts in a year or two, while my thread has been hanging around and going nowhere fast forever.

The motivation of freeing up funds is there, it's just finding the best way to do it, I guess!

ThatKiss

That's the £500 additional credit card payment made, and balance down to £4200. All being well, I'll be able to pay an extra £50 this month, and next month's payment will see the balance hit £4k.

Taking 10% out of the debt in one fell swoop is a pretty good feeling

ThatKiss

Whoops, should have checked my figures before posting! Hadn't updated my sig to take into account this month's regular payment, so my balance is actually £4050 and next months payment takes me well below £4K, regardless of whether I pay an extra £50 this month :money:

ThatKiss

Heh, just like that I get a payment for work I'd carried out a couple of months back! Straight to the Barclaycard it goes, and we're below £4K now!

ThatKiss

Interesting! Checked my credit score with Experian via their new partnership with Barclaycard, and I'm at pretty much the top end of their scoring, while with Noddle I'm on 3/5 on their scale.

I know these things are a guideline rather than being of any real value, but I wonder why the wide variation? Perhaps just that Experian is a bit more up to date?

Looks like I should be able to make some decent additional payments to both credit card and saving accounts come payday next Monday, but I don't think I'll quite make my target set in March of the Barclaycard balance being below £3000 by year end.

I won't be far off, but just not quite there - a little disappointing, but at least everything's going in the right direction

ThatKiss

Pay goes in overnight and a couple of glasses of wine tell me I'm not going out again today, so I've paid another £200 off the Barclaycard, and put £200 into The Fund. Awesome!

Barclaycard now at £3750, which means it'll end the year on, at most, £3600. Pretty happy with that, all things considered. £850 paid off in November alone.

ThatKiss

Barclaycard direct debit came off today and balance now down to £3600. Hopefully I'll manage an extra payment at the end of the month to get this at least a little nearer the £3k end of year target, but the progress is good as it stands!

Also received a new balance transfer offer from Virgin, to be taken up by the end of January. Handy, as Barclaycard reverts to charging interest in February. I'll hold off using this until after the January payment to minimise fees.

ThatKiss

Virgin followed up their email about a balance transfer with a letter, which is interesting because I hadn't actually read the detail of what they were offering.

Basically there are two deals here - one giving me the option of being interest free until September 2017 with a 3.5% fee on the transfer, or a shorter term (Dec 2016) with a 1.49% fee.

It's not a massive difference in terms of cost (£98 v £126 based on current balance) but if I can maintain this year's level of payments, I fully expect to be paying off the full amount in 2016, plus having an earlier end date should encourage me to maintain momentum.

I'm also looking into taking out a help to buy ISA, as these have a (far) higher rate of interest than my recently-opened savings account (The Fund) and there's money in there to transfer without being left short on debt payments from my current account. Plus, getting money back from the government is always worthy!

ThatKiss

Hit the trigger on H2B ISA last night, so it looks like the undecided destination of the contents of The Fund is now decided.

I don't want to adult!