I did it.

enjoyyourshoes

Well done, great feeling when eventually you are back on solid ground.

So what now?

What have you learned?

How are you going to ensure that you do not fall into the same situation?

Are you going to review how you now can use the monthly money used to pay off the CC for your benefit ?

basketcase

Well done!

Willowpop

Thanks everyone!

enjoyyourshoes wrote: »

Well done, great feeling when eventually you are back on solid ground.

So what now?

What have you learned?

How are you going to ensure that you do not fall into the same situation?

Are you going to review how you now can use the monthly money used to pay off the CC for your benefit ?

Very good questions. ..

What have I learned? To budget. I didn't have a clue previously.

What now? My OH has some CC debt that he accrued before we met and he insists that he alone pays off so I'm going to have a chat with him and offer to help him.

How will I not fall back into the same situation? I have a better job than I did. I've closed the lines of credit and have no desire to give most of my money away each month to pay my debts back. I want to stay debt free now.

I am definitely reviewing what to do with the money I will have 'spare' each month. I need to start saving so some will go to that pot, I'd like to help my OH so some may go there if he will allow, I'd like to have a fund so that when my daughter wants to learn to drive in a few years I have the money to pay for that and maybe a little car.
I'd like to start overpaying the mortgage too...and I'd rather like a holiday somewhere please.

I have a lot of options, but EVERYTHING will be saved up for, not borrowed. :T

enjoyyourshoes

Regular savings are great for monthly amounts that are spare.

£100 into 6% (FD or HSBC to name two) will give you £39.16 pa in interest.

After year 1 put the £1239.16 into high interest current account (TSB-5% pa) then take out an additional £100 pm to increase the RS to £200 pm generating £78.32 from RS plus 5% on the diminishing £1239.16.

Then the third year etc....

Benefit from compound interest rather than being its slave.

Check with bank that overpayments are OK and find out if there is a limit. If mortgage rate higher than savings interest rates then put in as much as you can as the capital sum soon reduces and as a result less interest will be accrued thus the term of mortgage will be shortened, meaning you pay less back to bank as a total. Great plan.

Good luck with the driving, start searching insurers, some offer better rates because drib=ver is a L, but as soon as they pass the rate goes up and then other insurers come into play being cheaper (relatively speaking!)

Also never pay monthly for insurances (whatever they are) as the pesky blighters charge you credit.

Accrue you calculated annual/1/2 & 1/4ly bills (was you have already calculated) into a monthly sum and put this into high interest account. (TSB=5%). Diarise when each contract is due renewal and put note 1 month before in diary so you can negotiate down the cost (MSE main site great advice for that)

Stop any superfluous monthly contracts (2 year phone contract can often be renegotiated at the 1/2 way stage (i.e. after 1 year)

Good luck with the negotiations with partner etc.

Willowpop

Enjoyyourshoes, that is all super super helpful. Thanks for taking the time to write that.
I've already been able to pay my car insurance annually for the last 2 years and have literally just renewed (technically didn't renew, started a new policy with a different insurer as they were cheaper) so I will definitely take your advice and put the monthly money into a high interest account. I will look at the TSB. .is that 5% account you mention an instant access account?
I have not long opened a regular saver account with a 6% rate and have been putting £25 a month in there which is all I could spare at the time. I can now allocate more money to that though.
The whole compound interest and moving savings after year 1 like you describe is a whole new world to me which I need to look into... why am I better keeping 2 higher interest accounts and, using your example, after putting 100 per month away, using the balance of the account from the 1st year to put 200 away rather than just moving the whole balance of the 1st years savings into the new account. Why is the 'drip feeding' (for the want of a better phrase) better than just moving the lot over?

I'll definitely check out insurers for learners and newly qualified drivers. I have a number of years for the yet so that can wait. I will get my head around the whole make interest work for me thing first!

enjoyyourshoes

Compound interest is technically interest on interest. So if you have £2000 in a savings account earning 5% (TSB);-

End year 1 you will have £1050

End year 2 you will have £1102.50

Year 10 £1647

If you do not add or take anything away from the account

The other bit I was suggesting was using year 1 and subsequent years RS pots to fund even larger monthly RS contributions (maximising the 6% rate)

The drip feeding into the RS meets the banks requirements (they limit the £ you can add in each month(FD £300pm, HSBC £250, Lloyds £400 etc). So the first years you put in high rate current account (TSB 5%) whilst dripping it into RS earning 6% pa). The reducing balance in TSB will still get you some interest also) even though its reducing (this could be offset if you pay you monthly accrual for household bills by DD into this same account (£2000 limit)

One key to saving is try to make it fun !, pictorial metaphor on the wall (Blue Peter style filling up graphic etc) or photo of the 'holiday' etc

You seem top be on the case anyway with RS in place etc.

enjoyyourshoes

sorry it should read £1000 in savings not the £2000 typed in !

If it was £2K

Year 1 £2100

year 2 £2205

year 10 £3294

Willowpop

Ah yep, I understand now... There is a maximum you can put in per month isn't there. I'd not thought about that. That makes the drip feeding make sense.
I have a regular saver yes, it's just a couple of months old.. I was on the phone to the bank and they mentioned it and I thought why not, the last of my debt was on 0% so a couple of months of £25 wouldn't be missed if transferred to the reg saver account.

Thanks for explaining the interest stuff...it's all new to me. I wish it wasn't as im in my 40s, but I can't change my financial past... I can give myself the best financial future possible though, and it's folks like you who are kind enough to take the time to explain stuff like this that will make it possible for me. :beer:

pennystretcher

Congratulations!!

If you have a mortgage - join us in the MFW forum.

Re making most of money you can save and drip feeding - check out the regular savers http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

Willowpop

pennystretcher wrote: »

Congratulations!!

If you have a mortgage - join us in the MFW forum.

Re making most of money you can save and drip feeding - check out the regular savers http://www.moneysavingexpert.com/savings/best-regular-savings-accounts

I do have a mortgage so that will be my next port of call. Thanks.