Journey to £0 by 2020, with a few bumps along the way

chelseablue

Thinking about it, the second option might be better. Sending half to savings and half to Virgin

As then when something comes up that needs doing/paying for I wont have to use the credit card

Speaking of stuff that needs paying for, when we got home from Australia on Saturday, while we were away the shower curtain pole had fallen off the wall and bashed into the bathroom window and shattered the glass

£182 to fix

What a welcome home :rotfl:

enthusiasticsaver

I think if the card is interest free and you have a further 2 years on the deal then paying enough monthly to repay it within the deal period is probably best and sticking everything else in savings. On £9000 over 24 months that is £375 a month. That depends on you not putting anything else on the card though.

chelseablue

More debt busting progress made today, I phoned Next to pay off the balance and while I was on the phone I closed my account with them.

This will mean no longer ordering whatever we want and spending 2-3 months paying it back.

All clothes purchases will now be made on the debit card

chelseablue

Was reading about the Dave Ramsey method of debt busting where you pay off the debt with the smallest balance first to keep motivated.

When we got married in June we paid for the wedding all from savings, apart from the rings as we were just short of the savings target and the jewellers offered 0%

I've just rung the finance company and the settlement figure is £1,387

Its payday this Thursday and we still have £1,450 in the bank. So could pay off the rings and that'll be another thing paid off and closed.

Or I can leave it and carry on paying the £35 a month for the next 3.5 years

enthusiasticsaver

chelseablue wrote: »

Was reading about the Dave Ramsey method of debt busting where you pay off the debt with the smallest balance first to keep motivated.

When we got married in June we paid for the wedding all from savings, apart from the rings as we were just short of the savings target and the jewellers offered 0%

I've just rung the finance company and the settlement figure is £1,387

Its payday this Thursday and we still have £1,450 in the bank. So could pay off the rings and that'll be another thing paid off and closed.

Or I can leave it and carry on paying the £35 a month for the next 3.5 years

Is all your debt at 0%? I think as there is no interest being charged on it and presumably your budget is not so tight you scratch around to find that monthly repayment I would put the £1450 in savings instead so it can earn some interest especially as you have just depleted your savings account by paying off the Lloyds credit card. It might be worth you starting to think about some medium to long term goals now as you are really getting to grips with paying off the debt. I understand the Dave Ramsay thinking behind paying off the smallest debt first to keep motivated and certainly that is an option but you seem pretty motivated anyway.

enthusiasticsaver

We did not have debt (except for the odd interest free purchase) so used a three prong plan to saving for the future of our family which you might want to think about once the rest of the credit card debt is gone. We budgeted for normal household expenses, personal expenditure and savings for holidays (average budget), insurances and Christmas as many people on here do. The remaining unbudgeted money was split into three. One third went into a fairly accessible savings account for more expensive holidays, home improvement projects etc. One third went into medium term bonds (3-5 years) and we used that toward new cars, more expensive house projects, university costs, weddings and house deposits for our daughters and one third went into long term savings and was the main reason we were able to retire at age 58. It was divided initially between mortgage overpayments and additional pension payments. When the mortgage was repaid we moved to stocks and shares isas.

That might be something you could consider in the future when the debt is gone?

chelseablue

enthusiasticsaver wrote: »

Is all your debt at 0%? I think as there is no interest being charged on it and presumably your budget is not so tight you scratch around to find that monthly repayment I would put the £1450 in savings instead so it can earn some interest especially as you have just depleted your savings account by paying off the Lloyds credit card. It might be worth you starting to think about some medium to long term goals now as you are really getting to grips with paying off the debt. I understand the Dave Ramsay thinking behind paying off the smallest debt first to keep motivated and certainly that is an option but you seem pretty motivated anyway.

No, we owe £2,300 on the Halifax Clarity card that we used in Australia.

Maybe I should send the £1,400 in the bank to that instead? That will leave £900 on it that I could clear in February when husband gets his bonus

After the Clarity card its just the ring finance and Virgin card left to clear

chelseablue

enthusiasticsaver wrote: »

We did not have debt (except for the odd interest free purchase) so used a three prong plan to saving for the future of our family which you might want to think about once the rest of the credit card debt is gone. We budgeted for normal household expenses, personal expenditure and savings for holidays (average budget), insurances and Christmas as many people on here do. The remaining unbudgeted money was split into three. One third went into a fairly accessible savings account for more expensive holidays, home improvement projects etc. One third went into medium term bonds (3-5 years) and we used that toward new cars, more expensive house projects, university costs, weddings and house deposits for our daughters and one third went into long term savings and was the main reason we were able to retire at age 58. It was divided initially between mortgage overpayments and additional pension payments. When the mortgage was repaid we moved to stocks and shares isas.

That might be something you could consider in the future when the debt is gone?

A good plan thank you.

I normally put £100 a month into my S&S ISA

My medium term plan is to do up our house (it def needs work!) but not sure whether to leave that for this year and concentrate on clearing the debt and just buy the odd little thing for the house

Long term plan when the debt is cleared is to overpay the mortgage as we still have £216,000 and 29 years left to go

enthusiasticsaver

chelseablue wrote: »

A good plan thank you.

I normally put £100 a month into my S&S ISA

My medium term plan is to do up our house (it def needs work!) but not sure whether to leave that for this year and concentrate on clearing the debt and just buy the odd little thing for the house

Long term plan when the debt is cleared is to overpay the mortgage as we still have £216,000 and 29 years left to go

Investing is a good first step and £1200 a year is a good initial payment. Are you invested in a low charges fund at the appropriate risk level for you?



I think personally if the debt is at 0% just setting the payment at the right level to clear it within the deal period is ok especially if you are building up savings.

As you have a fairly large mortgage (although this might not be so large in todays standards) I think I would prefer to focus on that now the debt is under control or do the necessary works to the house starting with the most urgent project but paying in cash rather than borrowing. Think of it like clearing debt with priority work being dealt with first. I also think maybe setting a small monthly overpayment (£50-£100) to your mortgage might start to bring the term down as 29 years is a substantial lengthy term. You will hardly notice it going out after a while and even small overpayments can knock years off the mortgage term and thousands off the overall mortgage cost. As the necessary work is done you can increase the mortgage overpayments or the s and s isa or pension repayments. Obviously this is once your emergency fund is at the right level.

chelseablue

Lloyds credit card is now closed! :j

Might treat myself to a pizza tonight :rotfl: