Pay it back or budget it

chrisdanish

Morning,

I'm after some quick advice with regards to how I go about paying back my debts but also how I budget for the year.

I compiled a budget using the tool on the site and it has really surprised me how easy it is to save for Christmas/birthdays/car mots etc. if I'm putting a little away each month instead of the horror of it coming out on the month and having cash flow issues. I really think this will benefit me.

However, I have debts. Most of it now on 0% credit cards for the next few years. I do live in my overdraft which is at the end of the month £1250 @ 19.9%. So I know I should get this down asap.

I know where I can make some savings but I'm really confused how I will go about managing the balance and cash flow when I am trying to get my overdraft paid off as well as keeping money aside for these small month expenses.

I know this shouldn't be rocket science, but I'm really struggling to get my head around it. Have you been in a similar situation? What did you do? What is my best course of action? Please help.

Many Thanks

Chris

rolls99

A lot of it comes down to personal preference as to how you go about things.


When saving some people have a single "pot" (account), while others have several, each for a different
purpose (Xmas, car and so on) and "Drip feed" them.


Obviously while it's best to save as much as you can, it is no use going OTT and being short of money that you then go into your OD again, or, use CCs all the time.


Exactly how you go about it really will boil down to what cash you have available to zap that overdraft; that has to be the first thing to get shot of.


There are options to do this with you credit cards.


It all depends what's available to spend and your promo offers.


If you have a card which has 0% spending simply use that, and leave the money in the bank to clear the OD.


If you don't have a 0% spending card, but do have transfer offers, you can spend on any card, leave the money in to the OD, then BT the "Spend" card to 0%.


You need to watch fees/interest etc and remember your payments to your CCS will increase but you will no longer have an OD to worry about.

Perhaps if you post up an SOA/list of your cards/balances/available credit, others far better at number crunching can help?

chrisdanish

Thanks Rolls,

I think I'll keep my bit that I save in my currant account with the overdraft, but just keep a running total of how much is actually put aside for other items like the car,Christmas. That way I'll be paying less interest.

I don't believe that I have much room left on the 0% Credit Cards to play with, they are my priority once I have got the current account debt free.

I have done my budget, and I guess I have a statement of affairs in my head. I should probably get it down on paper. Thanks for the tips.

Many Thanks

Chris

andyfromotley

Just allocate x amount to a category of overdraft every month. treat it like a monthly expense.

You may want to check out YNAB which is a fantastic budgeting program.