Which debt first? - SOA included

fatbelly

I'm confused about the car/bike. It reads as if you own a car and a bike worth 13k in total and have a 12k unsecured car loan and a 4k unsecured bike loan. Is that correct? Or is there some HP/PCP there?

Can you give us a bit more detail on the vehicles finance?

redmel1621

Car was 9k, bike 2.5k so 11.5k (I have also included our 2nd car at 1.5k but that is currently off road so not costing anything but I included it as an asset) the figures in the SOA have the interest included. We've had the car over a year but the bike is a new addition.

Fosterdog

You really need to keep a spending diary, looking at your SOA things should be manageable but it's obviously not right now. Although it shows that you should have £108 left over each month not only do you not have that but you also have no cash assets from your present fund, your emergency fund, you car maintenance fund, nor your holiday fund so you are spending an additional £300 a month that is not accounted for here. Fixing that is going to be the key to getting on top of the current debt and prevent you getting into further debt. As you haven't actually been putting that money aside and Christmas is now less than three months away you are not going to be able to spend at your planned level this year without getting further in debt so something will have to give.

I agree with the others though, forget overpaying the council debt for now, I know that mentally paying off a debt completely seems more rewarding but it will cost you a lot more in the long run doing it that way. Pay the CU one off first, then start on the Hitachi one, then onto the car loan. Just leave everything else on minimum payments for now, a few of them will be clear within a year anyway freeing up the extra to chip away at the higher interest rates.

FBaby

If your eldest is working and only have one m ou child how come you are recieving £242 in benefits? Does it include DLA?

Also £100 on kids is not that bad although cut down but I don't think spending £200 on each other is a priority. There is definitely additional savings to be made here.

redmel1621

FBaby wrote: »

If your eldest is working and only have one m ou child how come you are recieving £242 in benefits? Does it include DLA?

Also £100 on kids is not that bad although cut down but I don't think spending £200 on each other is a priority. There is definitely additional savings to be made here.

I'm not sure I understand what you are saying here? We have 4 children. Our eldest in nearly 18 and is working part time while in compulsory education (at college). We get child benefit for 4 children??

I agree spending £200 on each other is not a priority and as I say it sometimes doesn't happen. It often goes into the Christmas foody treat spends, or we buy something for the house between us like last year we bought an 'OK Google' device between us. Another year we bought a super expensive toaster that has lasted about 10yrs, another year it was a nice globe and lamp for the living room. A few years has been a new boardgame for the family to play

DD265

Where do the two SLC overpayments come from?

I'd agree with paying down the most expensive debts first, but I'd also keep an eye on the overdraft in case Lloyds call it in. I'm not sure how much notice they normally give.

redmel1621

Fosterdog wrote: »

You really need to keep a spending diary, looking at your SOA things should be manageable but it's obviously not right now. Although it shows that you should have £108 left over each month not only do you not have that but you also have no cash assets from your present fund, your emergency fund, you car maintenance fund, nor your holiday fund so you are spending an additional £300 a month that is not accounted for here. Fixing that is going to be the key to getting on top of the current debt and prevent you getting into further debt. As you haven't actually been putting that money aside and Christmas is now less than three months away you are not going to be able to spend at your planned level this year without getting further in debt so something will have to give.

I agree with the others though, forget overpaying the council debt for now, I know that mentally paying off a debt completely seems more rewarding but it will cost you a lot more in the long run doing it that way. Pay the CU one off first, then start on the Hitachi one, then onto the car loan. Just leave everything else on minimum payments for now, a few of them will be clear within a year anyway freeing up the extra to chip away at the higher interest rates.

You are right, we never have that £100 to pay off debt as it usually gets spent on something else through the month. This month it was extra bits for Dh's bike. He needed a back box and bars for the bike so that he can use it for his new job which involves travelling to different sites. Previously he was on one site and all his stuff was on site.

Other months it has been things like my diagnoses of Plantar Fascilitis, which meant I had to buy some sturdy boots (Doc Martins as recommended by my orthotic dept.) as I am on my feet quite a lot at work.

Or Dh work clothes/PPE ruined and so had to replace, repair, or service. Most of the clothes budget goes on the kids school uniforms and a few outside bits. Dh and I very rarely buy clothes, unless our current ones are falling to bits.

I suppose this £100 gets used almost as an emergency fund, but instead of it being a lump sum that we draw from it is almost as though we add it to the fund, but use it right away... Definitely not ideal, but at least we have it there for these things that crop up.

With the council debt, it is more about lowering monthly bill/debt outgoings than the win of paying it off. I wouldn't bother overpaying any of the £10/£5 ones (not until they were the only ones left anyway) as it is such a low amount each month.

redmel1621

DD265 wrote: »

Where do the two SLC overpayments come from?

I'd agree with paying down the most expensive debts first, but I'd also keep an eye on the overdraft in case Lloyds call it in. I'm not sure how much notice they normally give.

They are maintenance/childcare overpayments from adjustments due to stopping uni halfway through a year. One is mine, one is Dh's.

The overdraft is frozen. It is a very old student overdraft (that they are pursuing) and I have written to them to ask for a settlement figure. I wrote at the end of August, but still haven't heard back yet. initially I wrote to declare it statute barred, but the overdraft only defaulted years after it was activated, so we are still liable. Hopefully they accept my settlement offer and repayment offer.

Willing2Learn

Just wanted to look at your debt repayments from a psychological perspective instead of from an MSE angle. Why not consider repaying the smallest debts first? That could give a psychological boost to your endeavours in paying down your debts, as the list of creditors shortens much more quickly

Just for the record, although I am making the suggestion, I actually prefer doing things the MSE route, by paying down the debts with highest APR first. But you might prefer the psychological journey for getting those debts repaid...

Sea_Shell

Is your rent really only £600 ppm, to house 6 of you?