My Little (big) Project!

Rosie_D

Hi there

I'm Rosie D & I'm a stay at home mum to our 2 little ones whist my DH goes out to work to bring in the pennies. I've been trying to pay down our debt for the last couple of years & haven't done too bad as we owed £38k then & now we owe £20k, so it's still quite a big amount but not as bad as it was!

I'm going to use this diary to keep me on the straight & narrow & now the kids are at school again, I'm using our debt free journey as my little project, to help keep my mind active :T

I was just wondering what most people do to pay off their debts, do you pay it directly into the debt or do you save it up first & pay things off when you have enough? I can see both sides to this & I'm leaning more to saving it up, as we have an offset mortgage & all our debt is on 0% - as follows -

Tesco CC £4800 - 0% until Dec 2016

Virgin CC £10,000 - 0% until March 2017

Family member £5,000 payable whenever ( not in a rush for it back)

So there's our debts & none of them are very pressing, that's why I was thinking of saving up for them, I know my family member said they're not in a rush for it back, but I think I'd like to get this paid first as it will make us feel better.

I'm thinking of budgeting £800 per month on top of the minimum payments so if we can keep plugging at it, hopefully we can do it before the 0% is up!

So here's to my debt free project, onwards & upwards (or downwards) lol

Rosie D x

bexster1975

At £800 extra a month your tesco card will be done by March 2016! You could then swap to the Virgin one and pay off £9600 ( not including regular payment) before that one finishes. Then you could focus on family member ( but at the same rate this could be paid off by about sept 2017. Two years to debt free as far as I can see! Go for it!

Bexster

DandelionPatrol

Rosie_D wrote: »

So there's our debts & none of them are very pressing, that's why I was thinking of saving up for them, I know my family member said they're not in a rush for it back, but I think I'd like to get this paid first as it will make us feel better.

It makes sense while your credit is on 0% to pay into a savings account and make a little bit of interest. But you are right to think about your relative.

What I would suggest you do is think about how you could get £2500 to them quickly if you need to. If you are putting £800/month to paying off debts, a savings account will have that amount until March, when you will presumably pay off the Tesco account. At that point, it may be wise just to keep that account live, with a minimum of activity if this is required, rather than ditching it, so that you can lay your hands on some money to pay off the relative is this becomes necessary.

Bobarella

Rosie_D wrote: »

Hi there

I'm Rosie D & I'm a stay at home mum to our 2 little ones whist my DH goes out to work to bring in the pennies. I've been trying to pay down our debt for the last couple of years & haven't done too bad as we owed £38k then & now we owe £20k, so it's still quite a big amount but not as bad as it was!

I'm going to use this diary to keep me on the straight & narrow & now the kids are at school again, I'm using our debt free journey as my little project, to help keep my mind active :T

I was just wondering what most people do to pay off their debts, do you pay it directly into the debt or do you save it up first & pay things off when you have enough? I can see both sides to this & I'm leaning more to saving it up, as we have an offset mortgage & all our debt is on 0% - as follows -

Tesco CC £4800 - 0% until Dec 2016

Virgin CC £10,000 - 0% until March 2017

Family member £5,000 payable whenever ( not in a rush for it back)

So there's our debts & none of them are very pressing, that's why I was thinking of saving up for them, I know my family member said they're not in a rush for it back, but I think I'd like to get this paid first as it will make us feel better.

I'm thinking of budgeting £800 per month on top of the minimum payments so if we can keep plugging at it, hopefully we can do it before the 0% is up!

So here's to my debt free project, onwards & upwards (or downwards) lol

Rosie D x

Good luck with your journey Rosie Bob

determined_new_ms

Hi Rosie and welcome :wave: I'm in two minds with this as can see the benefits of saving and getting some interest (I've got a stoozing credit card balance which is earning us about £10pm) but I think by paying it off you quickly get in a momentum and the debt clearing bug! Squeezing little payments regularly to bring down the terms quickly. That's how I did it and each creditor paid off was such a boost.

Good luck with it!

12_month_challenge

Good luck with your journey Rosie. You have done so well so far. Keep going and you will get there.

rockm87

Hi!

I too would be wary about just building money, Id make an 'emergency fund' of about a grand, and then use any additional money to just pay off the debt.

you dont want to suffer an emergency and use your savings and then end up struggling to pay down a balance, do it sooner rather than later.

I dont think the benefits are massively worth it.

Rosie_D

Hi everyone & thanks for your suggestions & support:)

I've had a think & I'm gonna split the £800 every month, I'm going to put £300 in the savings to build up & pay our relative off & pay £500 to the Tesco CC, this way I can see the balance coming down on the CC, which I think may become addictive, and pay some to our relative now & again. I feel this is the best of both worlds, plus the minimum payment will be coming off the cards too, win - win :T

Also I'm going to put £250 pm into a current account for any extras that come up (such as Xmas etc)

Rosie D x

12_month_challenge

This sounds like a good plan. I agree about the debt busting becoming addictive as well.

I am constantly thinking about money now but in a good way now
Good luck

AspiringButAnxious

It is motivating to see balances go down! And addictive:D
I paid my Very account 2 months before it was due to start charging interest and I'm soooo glad I did — even though the logical choice would have been to keep the money in my savings account, the interest earned would have been a tiny amount and not owing anything on the account is a weight off my mind. Splitting the £800 will give you the best of both worlds:)

12_month_challenge

At least you can say that's one debt gone. My plan is to tackle one at a time and see them go that way.

I think it will motivate me more.

Good luck on your journey