introduction and advice sought

its_maths_not_magic

Hi all. As you can see from my signature, my husband and I are in quite a bit of debt. :eek: indeed. I have been going over my relationship towards money and spending and have come to some insightful conclusions. Mainly, I've never seen money as something 'real'. To me its mostly just numbers on a screen. I know how childish that sounds (and at 38, I should be a bit more adult about it). But rather than look at the mathematics of it, I was in a fantasy bubble where money just appeared magically and things would work itself out. We went through a rough financial time where I could not find work. But still spent like I was working. Thats where our debts have come from.

It finally hit me that money is very real. It is a real and precious resource that needs to be respected. So we made some major changes. We moved into a cheaper place and dramatically decreased our major living expenses. I have begun an online business. So we're now living within our means.

I've also come to the conclusion that I need to take a very careful approach with money. So I intend to keep note of every penny spent, and on what and generally spend as little as I can. What can I say, Im ready to embrace frugality as a lifestyle choice. Having little but being secure feels so much better than having a lot and wondering when its all going to crash. Having and keeping money is important, I get that now.

One question I have. We have NO savings at all. Should I be trying to save as well as pay off debts. Luckily, none of the debts have interest on them, so time is on our side. I was hoping to put a bit away each week or should it all go to our debts? Thanks.

Tixy

Hi

Well done on the changes so far.

In terms of the savings usually its better to pay off debts before having savings in terms of interest but obviously its a bit different if you are not being charged interest.

Are you likely to be able to repay all your debts before you start being charged interest (assuming you have cc debt that is only 0% for a while)?

Also do you still have access to any credit in case of emergencies, e.g. an open credit card with unused limit? if you do then I don't think a savings buffer is as important as someone who has no access to any other funds.

dinky201

Hi, to me money isnt realy real, it is a man made object printed by a machine made by humans. The economy is a manmade game on paper nothing more.

The idea of the game is to look after your account.

So yes SAVE always save, but make sure that you wont be paying on intreast as tixy saying.

Make the game play in your favour

its_maths_not_magic

Thank you for your replies. Luckily, and I do count my blessings here, none of the debts carry interest and won't until they are paid off. I don't really have access to a credit card for emergencies, so I think the sensible thing would be to have a small savings, but put most of it towards paying off these debts.

GenericUsername

There are different views on havings savings whilst paying off debts, but for me (and probably a lot of people out there) it is important to have a bit of a buffer. An amount of money put away that is your emergency pot. Emergencies never wait for payday.

So a massive amount of savings earning very little interest does you no good at all. Better to throw it at the debts.

However, £1000 for emergencies is a good start. I may get slated for saying this but, take it out of the bank. Cash. Put it somewhere safe in your home. That way, whatever happens you have it and the bank can't take it from your account under any circumstances. Not saying they would but why give them the chance.

Taking the long view, if the banking system completely self destructs one day, your emergency pot will still be safe.

dinky201

have a copper jar, I end up having about £50 extra every xmas for that jar lol