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Wedding debt dilemma!
Sub1989
Posts: 4 Newbie
in Credit cards
Hi everyone,
My wife and I have recently had our wedding / honeymoon and though both were amazing they were also very expensive!
We are currently in credit card debt of £4,600 ( spread over two cards both at approx 80% limit), and additional £4,000 to family members (2,000 to be paid by March 2018, the other 2k is flexible though I wouldn’t want to neglect it).
We are both self employed in our late 20’s and our income is very seasonal and sporadic. We average a profit of approx £900 p/m between March - September and less than that in the winter. Our monthly expenses are around £1,500. This makes it very hard to save money, which we have never managed to do. Our original plan was to pay these debts of bit by but as we go along but with a %29 APR on the CC I can’t live with £75 of interest a month and would like to eliminate the credit card debt ASAP. My wife has considered getting a full time job to help pay these off but even then we’d be looking at least a year of credit card debt before we can be close to being debt free.
I have a good credit rating and am eligible for a 33 month 0% balance transfer card. Alternatively, I have got a provident fund that has got about 15k in it. This account was intended to be more an emergency ‘don’t touch till retirement’ accounts and it earns a decent interest but if you put that up against my current credit card interest I’m paying, I am definitely losing!
We would like to start thinking about buying our first house in the next few years, as stated my credit is good (and I intend to keep it that way) but wife’s Credit is bad due to defaults history which we are in the process of resolving. So we’d like to start building up our credit and saving for a deposit.
Additionally, I am due to be making a business expansion that will cost me an additional £500 p/m but should start paying for itself after the first two months or so.
All things considered, I have looked at the following plans -
1. Use £4,600 from the savings fund to pay off the credit cards all at once, then start saving for the business expansion (maybe have a two month advance of £1,000 saved up prior to starting it to take off the pressure of paying it out of the monthly cash flow), pay off family as we go.
2. Go for the 0% balance card, pay it off within the interest free time period while also paying off the family debts, use £1,000 - £1,500 from the savings as an advance for the business expansion
If anyone has any tips or thoughts that would be very helpful, thanks!
My wife and I have recently had our wedding / honeymoon and though both were amazing they were also very expensive!
We are currently in credit card debt of £4,600 ( spread over two cards both at approx 80% limit), and additional £4,000 to family members (2,000 to be paid by March 2018, the other 2k is flexible though I wouldn’t want to neglect it).
We are both self employed in our late 20’s and our income is very seasonal and sporadic. We average a profit of approx £900 p/m between March - September and less than that in the winter. Our monthly expenses are around £1,500. This makes it very hard to save money, which we have never managed to do. Our original plan was to pay these debts of bit by but as we go along but with a %29 APR on the CC I can’t live with £75 of interest a month and would like to eliminate the credit card debt ASAP. My wife has considered getting a full time job to help pay these off but even then we’d be looking at least a year of credit card debt before we can be close to being debt free.
I have a good credit rating and am eligible for a 33 month 0% balance transfer card. Alternatively, I have got a provident fund that has got about 15k in it. This account was intended to be more an emergency ‘don’t touch till retirement’ accounts and it earns a decent interest but if you put that up against my current credit card interest I’m paying, I am definitely losing!
We would like to start thinking about buying our first house in the next few years, as stated my credit is good (and I intend to keep it that way) but wife’s Credit is bad due to defaults history which we are in the process of resolving. So we’d like to start building up our credit and saving for a deposit.
Additionally, I am due to be making a business expansion that will cost me an additional £500 p/m but should start paying for itself after the first two months or so.
All things considered, I have looked at the following plans -
1. Use £4,600 from the savings fund to pay off the credit cards all at once, then start saving for the business expansion (maybe have a two month advance of £1,000 saved up prior to starting it to take off the pressure of paying it out of the monthly cash flow), pay off family as we go.
2. Go for the 0% balance card, pay it off within the interest free time period while also paying off the family debts, use £1,000 - £1,500 from the savings as an advance for the business expansion
If anyone has any tips or thoughts that would be very helpful, thanks!
0
Comments
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We average a profit of approx £900 p/m between March - September and less than that in the winter. Our monthly expenses are around £1,500.
So you are saying that even in the better months you are getting £600 a month further into debt ? This isn't sustainable - I'd suggest you go onver to the 'Debt free wannabee' board and explore ways of cutting your expenditure and/or increasing
your income.0 -
Top priority: cut your spending! It sounds as if your combined annual income is just £9,000, while you are spending £18,000 over the course of a full year: that is heading for disaster. Head to the 'old style' section of this site for help with reducing those monthly costs.
Yes: that interest bill is terrible. Use an interest-free card if you can get one, but also use at least part of your savings to reduce the debt on which you are paying interest.
Unless you can make your business pay at least what you feel you need to spend each month, it is time for both of you to get jobs if you are serious about eventually buying property.0 -
Unless you've got some very creative accounting going on its time for at least one of you to get a proper job.0
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OP had already done so within a few minutes of posting over here!p00hsticks wrote: »I'd suggest you go onver to the 'Debt free wannabee' board and explore ways of cutting your expenditure and/or increasing your income.
https://forums.moneysavingexpert.com/discussion/57490100 -
No, that’s £900 after bills, rent and other outgoings, sorry if this wasn’t clear!0
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So what are you spending this £900 on. Profit isn't really the best word - monthly surplus.
Are you saying you have a monthly income of £2400 with expenditure of £1500 ?
You might like to post a SOANever pay on an estimated bill. Always read and understand your bill0 -
No, that’s £900 after bills, rent and other outgoings, sorry if this wasn’t clear!
So you have £900 you can put towards your debt each month?
That will take you 4 months to clear your credit card (5 with interest).
What are you currently spending this £900 on? You could take some money from your savings to clear the debt (to stop interest), then put this £900pm into savings?0 -
So after paying all the bills you end the month with £900 in your pockets? And you can't save? This sounds funny. Where do these £900 go then? If you put them against the debt you will be debt free in no time. And you should definitely by any means clear the debt as soon as possible.The journey of a thousand miles begins with one step.0
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if you cant get a 0% card then use the savings.
it makes little sense to pay interest if you have the means there to clear it, unless your savings are generating more interest than the cards charge monthly.
savings are nice and all, but not when it's costing you money with other debts.0
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