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What to pay off first?

Hello,

I am currently earning just under £1400 per month and have gained a few debts over the past few months, through various unseen situations. My debts may seem small in comparison to others but I'm worried I'm starting a slippery slope, so to speak, and would like advice on how to fix it before it gets any worse. Thank you in advance.

I am generally not a frivolous spender, and would really like to become more educated, in terms of personal finance, to try and make the most of my income. I currently use the Wally expenses tracker app and use coupons and voucher codes where possible. I also try not to buy anything without researching the Best Buy first.

Currently, I have £800 on a Halifax Clarity MasterCard, and a £500 overdraft on my Halifax current account. My partner has a £600 overdraft and £300 on a store card.

I usually set aside around £600 for rent, utilities, food per month, as does my partner (into a joint account). I also have to spend exactly £200 p/m (best price) on travel.

My question is, what is the best way to go about clearing these debts? I feel I am becoming reliant on 'making up the difference' using my credit card, which I know is awful! :(

Should I try to pay off one in one go, and then stop using it all together? Should I switch accounts?

Any kind offerings of advice are much appreciated!

Comments

  • There are different ways to approach this. You could look at the interest rates and pay the highest first. Or, and this is probably what I would do, pay off the lowest first. For example, you have a £300 debt on a store card and £500 overdraft. This is the same amount in total as the Halifax card but in my mind I would have paid off two debts rather than one, and this would be more motivating for me.
  • Personally I'd do the following:


    Draw up a realistic, sensible budget. This can be a simple thing using Excel.
    Google snowball calculators. These will tell you the quickest way of clearing your debts, while paying the least amount of interest.
    Pay them in the order suggested.


    You'll need to stick rigidly to the budget, so make sure it is realistic.


    Then use this site to learn as much as possible about finances and how to manage them. You are doing the right thing by addressing the issue now while your debts are relatively low.
  • fatbelly
    fatbelly Posts: 23,237 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    Those are all sensible questions.

    Not sure of the answers atm.

    The devil is in the (small) details: overspending £10 per month compared to underspending £10 per month isn't a big difference number-wise. Less than £5 per week. But the difference on a cumulative basis over years is huge.

    So if you could pop over to this site:

    http://www.stoozing.com/calculator/soa.php

    put some figures together, format for mse, then cut and paste it into this thread it will give us all something to chew on. You might be best doing a joint one with your partner.
  • datlex
    datlex Posts: 2,252 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Hi I notice you spend £200 a month on travel. What travel is this? If by train make sure you are signed up to rewards (various train companies are linked to nectar) or get cashback on your purchases.
    Paid off the last of my unsecured debts in 2016. Then saved up and bought a property. Current aim is to pay off my mortgage as early as possible. Currently over paying every month. Mortgage due to be paid off in 2036 hoping to get it paid off much earlier. Set up my own bespoke spreadsheet to manage my money.
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