Tempted to pay off a card!

chelseablue

Very true.
I estimate I need to keep between 3 and 4 thousand for Australia (that's for spending money and accommodation)

Plus I want to keep some as an emergency fund, although in addition to the 9k savings I have a S&S ISA that I add £100 a month to that I never touch (balance today is £5,700)

System

I really don't want this to sound rude or judgemental, because it's not, I'm intrigued. How are you £14k in debt but also have £14k in savings?

chelseablue

DebtFreeDreams wrote: »

I really don't want this to sound rude or judgemental, because it's not, I'm intrigued. How are you £14k in debt but also have £14k in savings?

Not rude or judgemental at all

Our debt only happened this year really, we bought a car in March (had to as the lease was up on our old one and it had to be given back)

We got married in June (paid for this in cash from our savings and money from parents)

Going on holiday to Australia this year in December

If we didn't get married this year we could of bought the flights and car outright, but because we used all our savings for the wedding, the car (£5,000) and flights (£6,000) we put on the card.

5 + 6 is obviously 11 but we already owed £3,000 on my card

Last month we only had £2,000 in savings but husband was in a car accident and the car (that we only bought in March!) was written off and they paid out £7,000 for it.
Hence we now have £9,000 in the savings account.

Note to self: don't buy a car, get married and go on a long haul 4 week holiday all in the one year!

Or just don't get married :rotfl:

System

That is not the answer I was expecting. I don't know what I was expecting but certainly not all of the above. You've certainly has an eventful year. I hope everything is a bit more settled for you both now. I second the don't get married bit. If we hadn't have got married then we'd own our own house now. Hindsight is a wonderful thing.

To answer you original question I would pay off the Lloyds with the savings because I would feel that I'd achieved something and then make payments for the other debt to clear it by the end of the 0% deal. It does make more financial sense to keep the savings where they are and use them to pay off the debt at the end of the 0% deals. I would worry that savings would get spent elsewhere though and you'd still be stuck with the debt.

Willing2Learn

There is a constant drip-drip-drip supply of MSE threads of people who are more-or-less debt-free having a sudden change of circumstance and then spending on their cards. Fast-forward 2-3 years, and they are on here, with their thread, wondering where all their debt came from, and how they became so dependent on their plastic, and how they forgot about setting monthly budgets.

So chelseablue, I just wanted to say to both of you "be careful". Don't let your spending on plastic become a habit. Set your monthly budgets and stick to your monthly budgets and everything will be cool.


And congratulations on the marriage and everything

Edit: If it were me, I would use a sizeable chunk of the £7,000 insurance payout to reduce my overall debt. (Probably £5,000, so that the car was paid for...)

redux

I'd say don't panic, with the time remaining at 0%, 12/15/27 months, you can resist the temptation to pay these back early, put money in savings for now as per the NickC post 8, including the 2 x £1500 bonus when they come.

With those bonuses you'd have £12,000 cash, and can add maybe nearly £1000 of interest by the end of the longer one, plus further savings from your income, against £14,400 on the cards.

A slight note of reserve though, the holiday and perhaps a replacement car are going to eat into things too, so really the question is do your earnings less regular spending in the next 2 years cover those plus the current balances. If so, fine, if not start reviewing spending but there's enough time to work on things.

chelseablue

DebtFreeDreams wrote: »

That is not the answer I was expecting. I don't know what I was expecting but certainly not all of the above. You've certainly has an eventful year. I hope everything is a bit more settled for you both now. I second the don't get married bit. If we hadn't have got married then we'd own our own house now. Hindsight is a wonderful thing.

To answer you original question I would pay off the Lloyds with the savings because I would feel that I'd achieved something and then make payments for the other debt to clear it by the end of the 0% deal. It does make more financial sense to keep the savings where they are and use them to pay off the debt at the end of the 0% deals. I would worry that savings would get spent elsewhere though and you'd still be stuck with the debt.

Yes my first thought was just clear the Lloyds card, then would just have the Virgin card to concentrate on. The direct debit to Virgin is set at £300 a month.

The only thing that stops me is the holiday, if I spend £3,800 on Lloyds and another £3,000 in Australia I'll be back down to £2,000 savings (Plus I have the ISA savings that I never touch)

Although could then use the bonuses to repay the savings account

chelseablue

Willing2Learn wrote: »

There is a constant drip-drip-drip supply of MSE threads of people who are more-or-less debt-free having a sudden change of circumstance and then spending on their cards. Fast-forward 2-3 years, and they are on here, with their thread, wondering where all their debt came from, and how they became so dependent on their plastic, and how they forgot about setting monthly budgets.

So chelseablue, I just wanted to say to both of you "be careful". Don't let your spending on plastic become a habit. Set your monthly budgets and stick to your monthly budgets and everything will be cool.


And congratulations on the marriage and everything

Edit: If it were me, I would use a sizeable chunk of the £7,000 insurance payout to reduce my overall debt. (Probably £5,000, so that the car was paid for...)

Yes maybe I should pay off the car that we now don't have.

Current thinking is we don't want to buy again, the best car we ever had was the lease one that we had before. That might be because it was brand new though :rotfl:

The car we bought was a 2012 one, and the month before the accident we spent £500 on repairs :mad:

System

Why don't you make the decision after your holiday? You'll have a clearer idea of how much you have to play with and you have some time. I do also think that paying off the car is a good idea too. £2000 savings is still a good amount of money. Once your cards are paid off you'll definitely have the spare cash to rebuild your savings.

I have a 2008 car that has never cost me anything in repairs and it's still going strong (watch me jinx myself!). I bought it when it was 3 years old and just out of warranty. It really is luck of the draw with cars unfortunately.

chelseablue

So true, my car is a 2006 Nissan and in the 5 years I've had it I had to spend £300 on it once but that's it.

And it used to be my Dads car and he gave it to me for nothing so cant really complain about 300 quid on a repair :rotfl: