I want to stop drowning

enthusiasticsaver

debtaghh wrote: »

No we don't pay interest on my parents credit cards or money owed. My aim would be to clear the credit cards in 4 years. The interest would reduce the more we pay.

It is good to have something to aim for and while clearing it in 4 years involves a reduction in capital only of £11k per year you also need to take interest into account. That will go down if you can carry on moving deals as they expire on to other 0% deals and balances reduce so not entirely beyond the realms of possibility but as Mrs Save says there is no room in your budget for emergencies, gifts, car maintenance, entertainment or holidays. The extra income may cover this but you reduced the debt by £4K between October 2017 and June 2018 which suggests finding £11k plus interest may be a stretch.

I just think the certainty of a DMP may give you breathing space but only you can decide.

debtaghh

I understand what you are all saying hand appreciate all your advice. I just feel as I have emergency fund, car etc this year any spare cash will be extra debt payments therefore clearing more. My dh can get £300 extra ot a month at times plus if I cut down etc

Moneyfordreams

Would you consider the £10k gift to reduce family debt?

Noonearound (or spelt differently) does a self managed DMP, her early posts are really informative about her doing it with support from other posters. her reasons are very different... but its a good read

enthusiasticsaver

Maybe do as you did earlier on in the year and agree to revisit in 6 months time. I note that you do not really update your signature very much so it is difficult to see what progress you are making. I know you paid off £4k over a period of about 8 months last year and this and then the move happened so you say the debt is no longer correct in your signature. Which debt has increased, the credit cards or the family debt?

debtaghh

I have been slacking with the updating signature as I usually wrote on my diary from my phone and exact figures are on the laptop. I will update as I need too.

debtaghh

Morning,

I've just updated my signature. I think I'll re evaluate the whole dmp in January. If I haven't cleared much it may be the only solution. I currently have £4K in another account which I had kept for car, Xmas, emergency fund etc. Should I use any towards the debt?

MrsSave

If you use it for debt, how will you pay for Christmas, children's clothes/shoes etc? You can't budget for those as your soa was so tight. You don't want to leave yourself with nothing and then run the risk of increasing your debt.

debtaghh

Thanks Mrssave. That was my theory too. My plan was to keep the money and any extra cash to put towards the debt.

enthusiasticsaver

Do you have any cards with high interest rates? If so, using part of the £4K for reducing those would be sensible. Otherwise I agree due to the tightness of your budget keeping a reasonable sum aside is a good idea. If the debt is mostly on 0% or low LOB then keep the money in savings for now. You have worked your soa on lowest income so that is one plus. Use overtime, extra income to divide half to debt and half to savings. You have summer holidays now so set aside a budget for that maybe in cash and make it fun for kids by getting them to choose one activity each to do in the holidays. You do have to live too.

debtaghh

They are all currently on 0% on low life of balance rates.

I've cancelled some days out that were going to cost over £20 on travel. I had been saving loose coins for a year for the summer holidays. I also saved nectar points for their summer deal but typically I don't think they are doing it.