Improvements to my SOA?

dearbarbie

Good morning everyone!

I'm not in any serious debt issues, this is all under control. Was just wondering for opinions to maybe even improve it as I'd love to just feel debt free - the overdraft is from Uni mostly.
I used to be terrible with cash and run out halfway through the month, but since moving in with my boyfriend, an accountant (how handy), we've made a cashflow and a budget and I've become a lot better - so really proud of myself.

Income: £1282 after tax

Outgoings (good old London):
£280 rent (living in bf's houseshare so paying half-rent) - no tax or bills atm.
£250 straight into savings account

I have a weekly budget of:
£30 food (this includes eating out most Fridays, packed lunch, etc etc)
£50 socialising - I don't usually spend all of it but it includes stuff like lunch with mates, drinks after work, doing stuff on weekends
£10 travel
£10 clothes
£20 repayment to friend - no interest, he's in no rush for it back

Cc payments (minimum-ish until I pay off overdraft):
£15 credit card
£10 topshop card

Monthly phone bill - £30 line rental, normally about £40 though.

I usually have money left at the end of the month which I've put into my savings account too.
Thing is, there's Xmas coming up - budgeted £250, and I have to get an award from St James' Palace, of which the outfit has cost me a budget of £140.

Debts etc.
Overdraft £1500
HSBC credit card £550
Topshop card £80
I owe my friend about £450
Savings £1500 (£1000 is for first months' rent and deposit on a new place in Jan when me and bf get our own flat).
Am waiting for £600 commission from my job in December paycheck so that will go straight into my savings. When I have £1500 in my savings, I am planning to move it right over to my overdraft (so I can't spend it) then start on my cards - is that the right way to do it?

I also use Pigsback (made £20 so far) and Quidco, made about £30 from that.

Floss

We could do with your APR's for the CC's.....and the interest rate for your overdraft to help you.

Why don't you pay any extra money at the end of the month off your credit cards? That will reduce the balance and also the interest you are charged.

And have you thought about asking your bank to reduce your overdraft each month?

dearbarbie

Thanks for your reply - maybe asking them to reduce it is a good idea and put in the money I already have, then I'll already feel like I've come somewhere.

HSBC card 15.9% APR
Topshop card 19.9% APR

Thanks for the suggestion about putting the extra money on my cards - it's a good idea. I thought that if I worked at saving for the overdraft first, I'd feel motivated by having something completely paid off!

Not sure on the interest rate on my overdraft.

Floss

You'll be paying more interest on your debts than you will be getting on your savings....something to think about!

dearbarbie

Very good point!! Suppose it just feels nice having money in my savings account!

findingmyownway

Hello and welcome,

The other posters are right - it makes no sense to be paying interest at say 15% while your savings are earning at 6%ish. How much do you have saved? Enough to pay off the store cards at least?

You'd be best using the £250/month plus anything extra to throw at the debt and get it cleared asap then you cand save with a clean slate.

Lindsay-Lou

As nice as it is to have money in a savings account - it's definitely nicer to watch your debts decrease and disappear!

defo check you're OD interest rate first and then start paying off the debt with the highest rate.

and if I’m reading your SOA correctly you could make your credit & store cards disappear fairly quickly!

best of luck

sammiboo

dearbarbie wrote: »

Very good point!! Suppose it just feels nice having money in my savings account!

Yep that is EXACTLY what i used to think, it took me a while to get my head round to closing my savings account. If you have debt then savings really arent any use to you unless your savings account offers more APR than what your debts are charging you. But considering they are aound 15% or more I doubt it

In all honesty I am financially better off without savings and paying as much as i can into the debts I owe. I was just like you when it came to savings but you really should concentrate on your debts more than worrying about savings

The £1000 i would keep where it is if it is for your deposit and rent on a new flat, but other than that I would use the rest to paying off some debts. In a week you could pay off your HSBC card. Use the £500 and dont got out for a week = £550. I am sure you could miss a week of going out if it meant paying off a debt.

If you are a little bit more strict you could pay off your topshop card.

When you pay minimun payments it barely pays off the interest, so it is better to pay as much as you can afford.

dearbarbie

Thanks again - that's a very very good point!! I've just had the overdraft for years, and the cc for 18 months...i guess its all in the psychology!!!!