*Change of plan - and maybe some good news!*

Snaggles

Hello!! :wave:

I’ve been doing some thinking about our finances recently, and basically I'm sick of being in debt, and hate the thought of having to save up £4500 before I can clear our car loan (can't make overpayments). I’ve been looking for ways of making our finances more flexible, and this is the new plan I have come up with.

It’s a bit scary and leaves our finances very tight until my maternity leave finishes, but it means I will be debt-free within the next few weeks…hurray!!

Please will you have a look at it and see what you think. If I decide to do it this way, I will also put together a new SOA, as our old one will need some serious re-jigging!

Current financial position:

The bad stuff:

- Car loan £4500
- Offset loan £3000 (limit £5000 - this is part of our mortgage (was used for home improvements), so I’ve never classed it as a debt for the purposes of DFW, but I would still like to get rid of it within the next 12 months)

The good stuff:

- Sharesave matured on 1st August, now just waiting for share price to rise but currently standing at roughly £4500


Original plan:

Pay off offset loan with sharesave money, and use rest of sharesave money (£1500 approximately) to live on until January when I go back to work.

Possible new plan:

Pay off car loan with sharesave, leaving me with just the offset loan, and therefore being completely free of all unsecured debt (woo!).

Try and live off SMP, tax credits and child benefit, make a bit of extra money through Ebay, Quidco etc…..and….gulp…..have a go at matched betting (someone – you know who you are, you complete superstar :A has offered to help me get going with this).

This may well not be enough to cover bills and living costs for the next few months, but I can still draw money from the offset loan if I need to (this is on a fixed rate, lower than the car loan is, and will be cleared from next years sharesave, IF I haven’t managed to clear it myself before then).

The idea of doing this is that the offset loan is more flexible than the car loan, so I can overpay it whenever I manage to bring in some extra money. And even if I draw on it right up to it's limit, it will still be cleared this time next year.

Phew.....what do you think?

chevalier

It sounds like a good idea to me. The only fly in the ointment is which way the share price is going to go in say the next month. The other thing is whether you will have as much in the share save scheme next year because of you being on maternity leave. Do you still contribute while you are away? If not then next years money won't be as much from the scheme.

On the other hand if you think you can pay it off anyway in the next year, then next years scheme money would be profit anyway. It seems to me that paying off something that isn't flexible is a plan.
best of luck
chev

Storm

I agree with Chev that paying off the more expensive, inflexible loan first is a good plan - just how tight will it be though with the SMP, CB & TCs to live on?

Snaggles

Hi Chev - yes I'm still contributing the full amount, so I will have enough to clear the offset loan next year even if I run it right up to the £5k limit.

The share price is the thing that could throw a spanner in the works - because it's a massive company, they are really unlikely to crash dramatically (although it COULD happen, and knowing my luck, it will!), but I wont be doing anything until I have this years money safely in my account, and next year, if the shares are really low, I have the option to take the cash rather than the shares anyway (which wouldn't quite cover the offset loan, but it would come fairly close).

Snaggles

Storm, it will be pretty tight! :eek:

But it's only for 4-5 months, and I could go back earlier if it became a problem.

The other complication is that Stu is being made redundant as of the end of this month, he is pretty confident that he will get a job quickly, and will pester the temp agencies for work every day if not, but obviously it's a bit of a worry. But if he gets another job quickly, there will be a small amount of redundancy money (about 2 months wages) to add to the pot.

immoral_angeluk

I thin kit definately sounds like a plan.. and if you need help managing to get by on child benefit/tax credits while on maternity leave give me a shout!!! lol! Been there, done that... got the sick stained tshirt....

madmoney_2

i think you should just go for it, it sounds like an excellent plan to me, and you have the added fallback of you going back to work early if necessary, good luck snaggles xxx

Snaggles

immoral_angeluk wrote: »

I thin kit definately sounds like a plan.. and if you need help managing to get by on child benefit/tax credits while on maternity leave give me a shout!!! lol! Been there, done that... got the sick stained tshirt....

I had to laugh when I read that - I was actually wiping baby sick off my top at the very moment you must have been typing it. :rotfl:

I'm pretty sure I WILL be coming to you for tips though, thanks!

Madmoney - thanks! You can be absolutely certain I will be focussed on this plan, for exactly that reason - the threat of having to go back to work early is a great motivator!

immoral_angeluk

Snaggles wrote: »

I had to laugh when I read that - I was actually wiping baby sick off my top at the very moment you must have been typing it. :rotfl:

I'm pretty sure I WILL be coming to you for tips though, thanks!

I feel your pain.. lol. I currently have Ash running around in just her pants threatening to wee everywhere while singing 'squeaky squeaky squeaky' along to dora the explorer and climbing over furniture...

remind me why we had children????? :eek: :rotfl:

Snaggles

immoral_angeluk wrote: »

I feel your pain.. lol. I currently have Ash running around in just her pants threatening to wee everywhere while singing 'squeaky squeaky squeaky' along to dora the explorer and climbing over furniture...

remind me why we had children????? :eek: :rotfl:

Oh bless her!

It was for those brief moments when they are dozing off in your arms, and they give you that sleepy little smile that melts your heart, and you suddenly think 'Awwww....being a Mum is great!'

Just wait until you have a 6 year old!!! :eek:

immoral_angeluk

Snaggles wrote: »

Oh bless her!

It was for those brief moments when they are dozing off in your arms, and they give you that sleepy little smile that melts your heart, and you suddenly think 'Awwww....being a Mum is great!'

Just wait until you have a 6 year old!!! :eek:

I'm just scared to death for when Ash is 4 and K is Ash's age!!!!!!!!!
Talk about double trouble...:eek: :eek: :eek: :eek: