Saving or not whilst in debt?

MrsSave

I'm wondering about whether people still manage to put a little each month into savings, a holiday pot, entertainment, etc whilst working their way out of debt? I'd love to get out of debt, but don't want to live the next few years without any eating out/trips etc. Am I in the wrong thinking like this? I'm currently aiming to put something away into an emergency fund, savings and a holiday fund each month as well as put money to one side for birthday/christmas, and day to day spends. I'm thinking this is too much and I need to pay more off the debts each month

What do you do? How much do you put aside for spending each month if you're in debt (if you don't mind me asking).

Thank you.

jaydeeuk1

When i was paying back my debts, i decided that i would use left over wages just for debts, and money from ebay, odd jobs, betting etc was my save and spend how i want cash. Felt less guilty about spending cash made through doing something i enjoyed. I could have probably used that to clear my debts far quicker which is what many on here would advise, but i was more of a short term thinker back then.

Kimlock

I save all my spare change (anything below 50p) in a pot while I'm paying off my debts at the moment. That's about it. As much as I would love to have a savings fund, I need to get rid of the debt.
But when it's all finally paid off, at least now I know I can be disciplined enough to pay a set amount every month into a savings account.

stewby

I have a bit of a warped thinking on this but...

I save whilst I am in debt. My reason for this is to break the cycle of debt. I used my credit card for xmas the past two years (maybe even three years) so by saving for our xmas pot, it means that we now have actual money to spend on presents rather than using the credit card.

We did this by quite simply saving £1 every day. It give us about £600 by the end of November and will cover all our xmas presents and maybe the xmas food bill as well.

MadelinesMum

I keep a few hundred in savings just incase something bad happens eg car breaks down when you've recently had it repaired or you have to pay an insurance excess. It's got me out of a hole a few times. So really it's like an extra emergency fund. I save whatever I have left over at the end of the month - sometimes nothing, sometimes a couple of hundred.

MrsSave

stewby wrote: »

I have a bit of a warped thinking on this but...

I save whilst I am in debt. My reason for this is to break the cycle of debt. I used my credit card for xmas the past two years (maybe even three years) so by saving for our xmas pot, it means that we now have actual money to spend on presents rather than using the credit card.

We did this by quite simply saving £1 every day. It give us about £600 by the end of November and will cover all our xmas presents and maybe the xmas food bill as well.

I may have the same warped thinking as you, as this is how I see it. I do want to go away next Summer for a few days (not abroad, just a short break) and figured by saving a little each month we will be able to go without it going on credit. I haven't done a snowball calculation (too scared), but it's going to take years to get out of this debt. I believe you've got to be able to enjoy those years to an extent (though cut back a lot!).

ganderson1804

When working out how much we could repay to our debt each month I completed my SOA which made account for entertainment, holidays, clothes etc and included my debt repayments.


The amount allocated to each of these 'luxuries' was a lot less than what it may be when we're not paying back any debt but you still have to live. The kids still need clothes and you will have days off work where its inevitable you'll spend money so we felt better having a wee budget to limit our spending on these things.


By the end of next month we will have repaid our debt of over 10k but have still had days out with my daughter, managed to buy her new shoes when she needs them etc. and managed to repay over 10% of our debt every month.


I personally think its only realistic to set some money aside for these things - life doesn't stop just because you're paying back debt BUT it does need to be on a budget!


I actually find it quite liberating managing to stretch our limited budget.

retepetsir

I would say face up to it and try the Snowball calculator along with completing an SOA. Maybe we can advise? No reason why you can't save for certain things, but its probably not worth it if you end up paying £000's in interest extra!

misskl

Think of it like this- If you needed to go on a crash diet and it would take you 2 years would you never ever eat anything unhealthy in that time until you had lost the weight?


I think it's really important to make sure you save tiny amounts/give yourself little treats wherever possible. I am attacking my debt quickly by using 30% of my salary but I am still putting 10% away, and have started a part time job for 'fun money', because if all you are doing is working, and all that money is going into paying off your debts, you will be miserable (I've been there!) and thus you will feel that you have really restricted yourself for so long, and the temptation to spend when you do get a bit better financially will be there.


It depends on how it makes you feel. For me, I'm happy to sell my car, and pay off the rest of my debt within the next 6 months whilst continuing to save.


Now, having savings in the bank makes me feel a lot safer than before (even though they are tiny!). I hated having absolutely nothing in the bank to rely on. I used to go into my overdraft every month, and I used to get about £50 of bank charges- I was horrendous with money.


It's about changing your mindset. Now, I think once my debts are clear I will continue to save around 30% for the rest of my life- no matter what.