Please help me get my head around this.

rollercoasting

Hi. Just wanted to pop in and wish you well. What a great start.
Not sure if anyone has suggested using YNAB to you yet? It's a budgeting app and ethos that I've found really useful getting me better for budgeting. One of the benefits when doing it as a couple is you can both have an app on your phone so you can check budgets and log spends when you are on the go. It's also great for analysing what you are spending and to ensure you don't miss priority bill's.

Good luck. It's a marathon not a sprint. Xxx

mad_rich

Sounds like a great start. Congratulations.

I understand the desire to have an emergency fund if you're worried about your husband's job, but have to say I think it's madness to have £14.8k sitting in the bank earning naff all, while you're paying 20% on the debts.

£14.8k in debt is costing you nearly £3000 a year in interest.

You could clear MBNA and 'My worst credit card' tomorrow. Cross them off the list and have two fewer accounts to think about each month.

You'd still have a couple of grand in the emergency fund - enough to see you through a couple of months if you really cut back the spending. And the interest you've saved in just one year would be enough to completely clear MBNA2.

With a bit of effort, you could clear both MBNA2 and Tesco within a year, and then suddenly everything starts to look a lot more rosy.

If the worst does happen, and your husband loses his job, you could spend 14k on the card and still be better off than if you hadn't used your savings. Your 'emergency fund' is the credit card. (Hopefully it wouldn't get that far, of course. He would find another job within a few months, and you might have put hundreds on the card, not thousands).

I would also want to find out when those 0%s end, and what rate they will revert to. If a biggie is expiring in a few months, then you need to know if you're going to be able to transfer the balance or not.

mad_rich

How does this look for a year's time?

Description....................Debt......Monthly.. .APR
credit card 1..................8388.....226.......0
credit card 2..................3622......99........6.9
Loan ( Paragon)................3288......248.......9.9
small barclaycard..............560.......20........0
BNPL...........................1500......0........ .0
HSBC...........................1600......75....... .0
M&S............................3608......41....... .0
Asda...........................3344......38....... .0
halifax 2......................2640......30........0
halifax 1......................3872......44........0

Total debt £32,422

That's paying off the two biggies tomorrow, and redirecting those payments + ~£250/ month to pay off MBNA 2 and Tesco. Hopefully you can throw more money at it once you've reigned in your spending and clear those debts sooner.

mark55man

Hi - I love a new diary and you have made such a good start.

Our family is slightly different in split of salaries but the end position was similar a while ago.

There are two things I would advise from my own experience

* The mental attitude I find most helpful although so hard to do is not to regard current spending as the normal and then try and save from it - as you will always end up back to normal. What you need to do is find a new workable baseline and then every spend over that is the exception not reverting to mean

* The second is you need to prepare for how long this is - 3 years sounds short compared to £60K - but life will get in the way and kids will have things they don't want to deprive them of, and you'll have bad days, weeks, (try and avoid bad months).. Also, as well as long, you will find your new sensible way of life you know frankly - a bit dull!! until you learn to love what its doing to your bank balance not rail against it - so GET IN THE ZONE QUICKLY!!

When your core spending is automatic and affordable the ££££ will fly off. Like I said I am in that zone at the moment, although no way could you call it hard core but thats why I've taken much more time than I could have

Unicorn_cottage

Hey there

I echo mad_rich's advice. I think part of the process a lot of us go through is using cash assets to pay off debts. Yes it feels wrong but what is wrong is paying mega bucks in interest. Get the worst debts paid off immediately and use the amount you would be paying back to snowball that into the next worst debt.

Also sell any bits and bobs you have hanging about - if you are a big spender you may have some big wins hanging about! When me and my partner went through our process we sold 2 cars, a camera, lots of old mobile phones, and all sorts - a wardrobe left behind when we bought our house - never be surprised about what people will pay for. Use Ebay yes but consider Gumtree and Facebook Marketplace as they both save money.

Lots of luck!

bertiewhite

enthusiasticsaver wrote: »

What yours and Dans story and many others on this forum is that leaving budgeting, working out finances etc needs to be done as a team when you live as a couple/family. There are so many people hiding debt from their partner and trying to deal with it alone and it is simply not possible unless both partners know the situation and are working towards the same goal.

I'm a bit late to this thread but I'd like to echo Enthusiasticsaver's comments.

I hid our debt from my wife for ages and it was like swimming against the tide but you're in a much better position given that you're both tackling the debt together rather than the OH adding to it!!

In fact, even though these days we are much better off than we were, I have to convince my wife that we CAN afford things as she is so used to us having to scrimp & save for so long.

redux

It's a good start, and shows your soa predictions were in roughly the right range.

I note that some people are suggesting using all of that reserve lump sum to clear down most of the balances at higher rates.

While there is that slight uncertainty about the job security, this is a bit risky. Whilst it is true that one or two of the then cleared cards can be used as the emergency reserve, this only covers new spending, and as well as that some money needs to be found to keep the regular payments going on the remaining balances.

As I suggested before, consider using some of that though. For example, using an online loan calculator* on the parts with 19.9%, which came to £15,300, 12 payments of £1416 clear these and incur £1699 interest. Paying off £4800 to start with, then 8 months at £1412, interest is £799, so just over half the interest saved. If £1800 of savings can also be found next month, then only £3000 would be dented into the lump sum

I'm not saying do it exactly at these numbers, but it gives an idea that still quite a bit of interest can be saved without taking the risk of using the full £14,800 for early clearing.

* Guardian loan calculator, no political allegiance implied, I just like the way it looks and works.