How best to get back in black?

bogstandard2

I'm not too much in debt but seem to be stuck. What's the best way to juggle all my finances and get back in black whilst not letting my savings suffer in the meantime? Here's our circumstances:

Husband is about £1500 into an interest-free student overdraft. He's earning but seems to spend it all.

I have £1000 on a credit card and have been hit with a car bill for £500 today :mad:

I have around £1000 in my current account and have a mid-month payday so need to last to mid-November.

We also have a Help to Buy ISA each and are trying to put the maximum £200 in it per month as that then builds up our government bonus (essentially every £400 we put in together per month is an extra £100 govt bonus when we come to buy in hopefully 1-2 yrs). But saving means I can pay less of the credit card off, and that accrues about £25 interest per month.

I guess my first question is how do I pay the car bill today? Do I put it on my credit card (which will max it out), or pay from my current account, and just use the credit card if I get into difficulty down the line near payday?

And should we stop paying into the ISAs and just focus on paying off the debt (and take the resulting hit on the govt bonus at the end of it all?)

middleclassbutpoor

You should complete a SOA for you both and look to see how why you are struggling in the way that you are where you cannot cope with an unexpected bill of £500.

It's impossible for us to say what is the right way as we do not know what you have yet to pay until payday nor do we know about your circumstances.

Once you have the essentials covered from your bank - do you have enough to pay the car bill?

If so, pay from your bank. If not, pay what you can and pay the rest on your credit card.

You need to get your income and expenditure under control and get serious about ensuring that you understand where your money is going. You will soon become more responsible towards managing your money and this may even allow you to save into your help to buy ISA and increase your overall savings.

General principles to follow: Apply your money to what will either pay or save you the most interest. Your £50 return for £200 is a great return so you are right to protect this but if you lose £50 interest at the cost of saving your debt increasing by £500 then that seems better to me.

National_Debtline

Hi bogstandard2


Middleclassbutpoor is certainly right on this, you need to complete a SOA. You'll find one here
http://www.stoozing.com/calculator/soa.php. It will show your normal household income and outgoings and your debt commitments. You need a budget you can stick to, and to factor in a maintenance fund for the car. Also consider an emergency fund for other unexpected costs that could come up.

Looking at whether you are earning more interest on your savings, or paying more on your debts, is very important. But bear in mind if you only make the minimum repayment on your credit card you'll only really be paying off the interest and not reducing the debt.

If you post your SOA on here other users will be able to make some suggestions on the best way to maximise your spare money. Good luck with it all.


Susie
@natdebtline