Money Advice Needed

lauravenue

Hello,

Quick summary, I have a £11,000 loan with Lloyds, and about £7000 on a credit card with Barclaycard.

The CC is no longer 0% interest, so I am in the process of switching that amount to a new, 32 month 0% interest CC. Decided to do that as last month I paid £150 off but was charged nearly £80 interest so I was shocked to see just how little amount of my money paid off the total amount.

My Lloyds loan I pay £240/month for, I was originally £12,000 but it is now just below £11,000.

My salary lowered a couple of months ago by just over £200/month, and that has changed things in a big way for me. I used to put that £200 in my savings (usually more actually), so that I was saving whilst paying off my debts at a good rate (I felt safer saving a little per month than just only paying off debt) but now that can't happen.

I moved house 4 months ago and now pay more for my mortgage than previously too, so money suddenly feels a lot tighter. I just wanted to see if anyone thinks there is anything I should do differently? I wasn't sure whether to extend loan and have 0 CC, or try and pay off loan with cash transfer from CC (I have another with a £10k limit that is at £0) or do I try (not even sure if you can?) lower the monthly loan repayments so that I am a little less tight. Or just do nothing differently I guess! Just wanted opinions, if you think this is fine then it is fine, but to me I just don't know what's the best place to have money owed, a loan or CC, or how to pay them off in the best way.

Thanks!

Arleen

Post a soa so we can get good overview of your financial situation, you can find it in the stickies here!

NineDeuce

£7k on a credit card? Crikey!!

I think you should start paying that off... now.... or it will be a continuous cycle.

kazwookie

More infomation is needed, as already suggested.

I think you need another job / lodger etc, as you are beyond your means from the information given

lauravenue

Does my financial situation make a difference as to which is the best thing to pay off? The SOA calculator wouldn't let me put in mortgage payments so am trying to find a different one, but in the mean time my question is which is the best to pay off/which is more important rather than this is my monthly spending, help etc.

I was just interested to know if the loan is most important/can you lower payments/should I pay minimum on CC and focus on loan or vice versa/should I try and pay off loan with CC...

I am unsure as to any of those answers and am interested to see if there is a precise answer or not.


Update:

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 2
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1700
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1700

Monthly Expense Details
Mortgage................................ 750
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 0
Electricity............................. 0
Gas..................................... 0
Oil..................................... 0
Water rates............................. 0
Telephone (land line)................... 0
Mobile phone............................ 20
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 0
Groceries etc. ......................... 0
Clothing................................ 50
Petrol/diesel........................... 40
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 190
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 0
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 0
Haircuts................................ 0
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0
MoneyBox Savings........................ 20
Lottery................................. 18
Fitness................................. 84
Total monthly expenses.................. 1272


Assets
Cash.................................... 1500
House value (Gross)..................... 440000
Shares and bonds........................ 0
Car(s).................................. 4000
Other assets............................ 0
Total Assets............................ 445500


Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 300000...(750)......0
Total secured & HP debts...... 300000....-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Barclaycard....................7000......150.......0
Lloyds.........................11000.....240.......0
Total unsecured debts..........18000.....390.......-


Monthly Budget Summary
Total monthly income.................... 1,700
Expenses (including HP & secured debts). 1,272
Available for debt repayments........... 428
Monthly UNsecured debt repayments....... 390
Amount left after debt repayments....... 38

Personal Balance Sheet Summary
Total assets (things you own)........... 445,500
Total HP & Secured debt................. -300,000
Total Unsecured debt.................... -18,000
Net Assets.............................. 127,500

Created using the SOA calculator at https://www.stoozing.com.
Reproduced on Moneysavingexpert with permission, using other browser.

My_Own_Back_Door

In the first instance you should keep £1000 of your savings as an emergency fund not to be touched for any reason other than a catastrophe. Use the £500 towards the cc to reduce it to £6500 and then set up a direct debit to be paid within the 32 months (within 31 months is £209 a month). You can easily take the extra from your fitness budget alone. I would suggest a spending diary as the money you should have left over at the end of the month is clearly been spent on other things. When you find that extra money and start controlling it you should also, at the same time as paying off the CC, overpay your loan.


Can I ask why no council tax, gas or electricity etc in your budget? You have other travel costs but own a car worth £4000 with no outgoings for it? With more details the real experts will be able to provide advice from their own experiences.

Ilona

lauravenue wrote: »

Does my financial situation make a difference as to which is the best thing to pay off? The SOA calculator wouldn't let me put in mortgage payments so am trying to find a different one, but in the mean time my question is which is the best to pay off/which is more important rather than this is my monthly spending, help etc.

I was just interested to know if the loan is most important/can you lower payments/should I pay minimum on CC and focus on loan or vice versa/should I try and pay off loan with CC...

I am unsure as to any of those answers and am interested to see if there is a precise answer or not.

Yes, it does. Your financial situation is the reason why you are in debt in the first place. It tells a lot about you. You are spending more than you earn. There isn't a precise answer, if you carry on juggling you are never going to make any headway.

Sorry to be blunt but you can't afford to spend £100 a month on entertainment, £50 a month on clothing, £84 a month on fitness (gym?). There are things missing, do you pay nothing for utilities, no TV, no internet, no landline, no council tax? Is this your own personal SOA or is it for the household, (two people)?

I suggest you look at where you can cut spending, and/or get a part time job to earn more money.

Someone else will be able to explain the logic of moving debt rather than paying it off, because I can't.

Ilona

lauravenue

All the bills for the house are included in the £700 listed under mortgage - my husband and myself pay the same hence the calculations not listed out separately - it all comes from joint account from the £700. I don't think there is any point in putting them in individually as the reason I put £700 in for the house is because it covers all of them and food too.

The clothes and entertainment were a vague figure, most months they are £0 but if I put that it makes my situation less realistic than it is. Thought it was best to over guess than under. Also the car doesn't really have any outgoings, once a year tax and MOT, but insurance is paid in one go for the next while and I don't drive enough to use more than a tank of petrol a month at a push.

The loan/CC are from overspending, and moving house/getting married, the reason they exist is actually less important now as my spending is better and there are no more moves/weddings to pay for, much better now than at the time the amount was built up.

Maybe the answers i'm looking for don't exist, as in what is the best way to deal with the two etc.

I agree with keeping the savings as they are, it will go up to £2500 soon so I will use some of that to pay off the CC rather than take a few months payments away from the loan, I don't think that's the right way round to use the money.

Thanks for the responses.

[Deleted User]

lauravenue wrote: »

I don't think there is any point in putting them in individually as the reason I put £700 in for the house is because it covers all of them and food too.

I think there is a point to listing them individually, which is, you may be paying way over the odds for some of them.

Listing them individually, will allow the FMs to advise you, on an item by item basis.

CapricornLass

Hiya,

Agree with the others, I think its best you cancel the fitness activities for the moment, and use that money to put towards your debts. Perhaps walk for 20-30 mins a day to keep fit until you're financially better off? Likewise, I'd stop the lottery until you are better off. Between the two of those, there's £100 a month that could go towards your debts.

What are the other transport costs, please?

blues

£750 a month is a low payment for a 300,000 mortgage & bills. Is that an interest only mortgage?