How do you save & pay debts at the same time?

piggybankrupt

I'm fed up of paying for things such as car insurance on credit card but how do you put some aside each month so you don't have to do that next year & for xmas etc when your money is taken paying off these things for the previous years! Its a viscious circle - help MSE people please !!!!:eek:

nickiboop

Planning!
EG
you have £1000 coming in
you will spend £800 for your monthly day to day living
you will save £100 for xmas/birthdays/holidys etc
you pay £100 off your debt!

also use DDs don't pay monthly by credit card

stop using credit cards!

Fill in an SOA To get you started!

Yorkielass

I'm not in debt (apart from student loans and mortgage :rolleyes: ) but this year we've really not had any spare cash each month and were worried about car insurance etc. So we worked out yearly costs and how much we needed to save extra to meet these costs this year. We also did the same with birthdays/Christmas and with holiday. I got a new job (which I earn slightly more for) and because of the way I'd been paid and been living off the money I had some spare at the end so this started the annual spends and pressie funds off (spare change had already started off holiday fund).

This month as soon as the mortgage had gone out I put the amounts we'd worked out we needed into these three accounts (they're online savers linked to our current account purely for piggy bank purposes). (I checked we'd have enough for dd's, petrol and food first with my budget for the month )

OH has taken some getting used to this idea but I think the thought of having to find money for Car Insurance, Home Insurance and Pressies in November and December (when both our birthdays are too :rolleyes: ) is reason enough to do it - and hopefully next September when we've done it a year we'll be saving a much smaller static amount and increase the money we have available to spend.

Well that's the plan...

Nickiboop's right though - doing an SOA/budget and spending diary is the best way to start.

Good luck

piggybankrupt

thanks for replies - will try the saving half, paying half off debts idea. It just seems we are encouraged to throw all spare cash at reducing the debts - but that just means you haven't saved any to stop you getting in debt next year!

1carlos

Hi Piggy,

Many years ago I had a "budget account" with NatWest. This would allow me to save a set amount every month to cover all the bills that would appear during the year. I could pay any bill at any time (even if the account went overdrawn), and not be penalised. Of course, the account would have to be at nil at the end of the year. I don't know if this type of account still exists?

1c.

MissKJ

Generate more income, read the threads about the cash back sites, read, read and read. Tthere are so many helpful ideas ont his site, if you are not in debt at the moment then you are in a great position!

Pinklepurr

Yorkielass wrote: »

I'm not in debt (apart from student loans and mortgage :rolleyes: ) but this year we've really not had any spare cash each month and were worried about car insurance etc. So we worked out yearly costs and how much we needed to save extra to meet these costs this year. We also did the same with birthdays/Christmas and with holiday. I got a new job (which I earn slightly more for) and because of the way I'd been paid and been living off the money I had some spare at the end so this started the annual spends and pressie funds off (spare change had already started off holiday fund).

This month as soon as the mortgage had gone out I put the amounts we'd worked out we needed into these three accounts (they're online savers linked to our current account purely for piggy bank purposes). (I checked we'd have enough for dd's, petrol and food first with my budget for the month )

OH has taken some getting used to this idea but I think the thought of having to find money for Car Insurance, Home Insurance and Pressies in November and December (when both our birthdays are too :rolleyes: ) is reason enough to do it - and hopefully next September when we've done it a year we'll be saving a much smaller static amount and increase the money we have available to spend.

Well that's the plan...

Nickiboop's right though - doing an SOA/budget and spending diary is the best way to start.

Good luck

I totally agree.

I've tried various different ways to budget in the past, but this is the only way which works for us. Our current account is with Intelligent Finance. We have one joint current account into which our salaries go, then on pay day each month, a set amount is automatically transferred into instant access savings "jars" to cover things like car insurance, car tax, holidays, kids swimming lessons, clothing purchases etc. These "jars" are linked to our current account so at any time we can alter the amount and transferring the money between the accounts is easy and instantaneous.

I spent an evening going through our bank statements and listed all our direct debits and then decided how much we'd need to set aside to cover annual bills such as car tax. To ensure we felt like we had some freedon we also set ourselves a small cash "allowance" each month which we can spend however we like but once it is gone it is gone!. The remaining amount (not much) is put into a savings account with another bank.

Luckily I have no debt other than a mortgage, but the OP could use the same principle and use any remaining money to pay off debt. Once you get use to working to a budget you will be able to pay off your debts faster and then start building up some savings. It is not an instant fix and it will take time and discipline, but you'll feel more in control. Also, if you have internet banking, check your account daily.

HTH