Knuckle down time

Sharp1986

Hi,
I've been using these forums for the last 10 years off on and on, I've had debt, I've cleared debt and learned so much from it. However, I went and bought a house and since buying the house I've found myself in debt which mainly started with solicitors fees and robbing peter to pay paul to ensure we had the deposit. I don't regret it but it's time to clear it. The one thing I've not done is cut down on spending so that's going to be my first step is to really knuckle down the spending this year.

Current debts on credit cards/finance/education loans (not student loans) stands at £11,780.51 as of 1st January however has already increased to £11,872.37.

First stage is to pay off one of the 3 finance agreements (none have interest) which is for a TV for £509 today. The annoying thing is we had the money to buy the TV outright but we've had this thing in our heads about having money in the bank in case we need any money in case of an emergency with regards to the house we've bought. I've decided to get rid of this notion and just work on clearing debt and improving our wellbeing surrounding the money.

So wish me luck.

JohnJ76

Good luck!

Your thinking is not fundamentally flawed, having emergency money is a good thing. Pay down your debts by all means but build up some savings in tandem if possible. If they are 0% there is a good argument to keep paying the monthly installment, but keep the money in savings incase, god forbid, you have an emergency. You could always use some of it to shorten the length of the agreement if you wanted, but there is no point clearing your debt if you then have nothing to fall back on if the washing machine breaks etc and you end up increasing your debt again.

Sounds like you are heading in the right direction though so keep up the good work, just review your spending and find something that works for you. Was your January purchase a need or a want? if it has increased because of interest you may be better targeting the debts that have % attached rather than the finance which is interest free.

Sharp1986

The interest is set at £10 per month on one of the credit cards that was for car insurance, the other credit cards are on interest free for a year. The extra increase was needed and wasn't a purchase, it was a case of robbing peter to pay paul, I needed cash so I paid something with the card that I'd normally pay cash so that way I would have more cash to pay the TV that was buy now pay 6 months later (due this month).

TV paid yesterday, so debts have now decreased.

Start £11,780.51
Current £11,363.37

Payday next week, providing they don't increase for any reason (Car is in for the MOT today) our monthly payments are £495 so hopefully by this time next month we'll be under 11k.

The hard part I find is balancing having cash in the pocket. Keeping our relationship healthy etc. It's difficult but this is my year for sorting things out I'm sure of it (until the boiler blows up or we figure out why the room is leaking water and suddenly we have a fortune to pay out grrr, it's a fine line we live on)

JohnJ76

Good job, you'll soon be under 11k and then next target under 10k, it's only a small thing but £9,999 will feel much better than £10,000, although it will be a while till I'm there! hope the car passed!

Sharp1986

Aye, the MOT came back with £260 costs which is so annoying. This means I have £30 till pay day and there will be no spare cash to build up a bit of money but hey ho.