Help Please - Want to be Debt Free

enthusiasticsaver

So I think my plan of action would be move £3000 from the MBNA card and £1085 from the Tesco card to the new money transfer card as the rate on that is higher than the overdraft. If you are offered more than £4200 then you could possibly move some of the overdraft too. Do not forget to allow for the BT fee and often they will only let you go up to 90% of the limit.


That leaves you free to focus on the rest of the overdraft and the £4000 on the Virgin Media cards. As the barclaycard is quite high presumably minimums on that and the new card over the year may take you up to the £7500 I estimate you could easily afford to repay towards the debt over the year. That leaves you 2020 and 2021 to focus on Barclaycard and the new card and maybe apply for a balance transfer if needed.

getmore4less

Andrew_P wrote: »

Hi getmore4less,

The fee on the money transfer card was 2.99% and hopefully we are going to be able to transfer £5,000 depending on the credit limit my wife gets given.

That is a lot cheaper than the current costs.

With 18 months and min payments will be a bit over 2% which is decent and cheaper than the mortgage.

Should save over £100 per £1k per year some will be closer to £200.


Apps and tools are great once you get going but nothing focuses the mind more than writing it all down.

If you are ok with a spreadsheet I would start with a manual spending diary and use the spreadsheet to do the adding up.

this will give you a bit of time to sit down together and go over what you spent and where, you will get a better idea of what you categories are and where your money goes.

That way when you pick a tool you have some data to get you going and some categories.

As an experiment try going back to Jan 1st and see if you can account for all your spends over the last 2 weeks.

Andrew_P

Thanks so much both of you for your advice

I was just wondering also what to do in regards to how we manage our finances currently. So at the moment we have a joint account for just bills and we both pay in 600 a month to cover these. This just about see's us through the month until next months pay.

Would you say this Is still the best thing to do?

Also in terms of an emergency fund, how much would you pay in each month to this? Would you create an account elsewhere that you can't touch easily?

Thank you

Andrew

findingthisdifficult

In your joint account, I would round up your bills to the nearest £ and then divide by 2 the amount required for bills and pay half each if that is what you are used to. By rounding up the bills, you can build up some extra buffer funds in the account. You should use a separate account for spending.

Do you have iPhones? You can use an app called credit and debit, it allows you to track bank accounts, each time you spend, you update the app then you can reconcile with your bank every week to make sure the accounts are saying the same amounts. I've been using it for nearly a month, it's great and shows you what you spend your money on and where you spend your money, turns out I spend a fortune at the big Mr T supermarket.

enthusiasticsaver

Andrew_P wrote: »

Thanks so much both of you for your advice

I was just wondering also what to do in regards to how we manage our finances currently. So at the moment we have a joint account for just bills and we both pay in 600 a month to cover these. This just about see's us through the month until next months pay.

Would you say this Is still the best thing to do?

Also in terms of an emergency fund, how much would you pay in each month to this? Would you create an account elsewhere that you can't touch easily?

Thank you

Andrew

Which bills showing on the soa are paid from the joint account? Obviously the mortgage, utilities, service charge but what about mobiles, car expenses and insurances? You have £1200 each month to cover bills but your fixed bills only appear to come to £1004 if you pay things like car insurance, tax and buildings and contents insurance annually. Where do these come from? What about fuel, groceries and entertainment, the unsecured debt repayments and presents, holiday etc?

Personally DH and I always found it best to have joint household account with all bills coming from there and then each have a personal account with the same amount of disposable income for personal things like gifts to each other, personal entertainment and hobbies and clothes etc. Everything else went to a joint account with some transfers to savings accounts. Is this something you could both consider? You might find it easier to work from the same page if most of your income went into a joint account..


If you have two council tax free months if you pay over 10 months you could use the £116 you normally pay to council tax to start off your emergency savings account which should be ideally an account you do not touch except in dire emergency. If you did 2 months at £116 that would give you £232 and you could then pay in say £50 a month until it gets to £1000 which is the normal starter emergency fund recommended. That should not impact on any debt repayment.


Personally I would put your joint incomes into one account and then perhaps transfer £200 into each of your accounts as personal spends. That would give you £200 to cover entertainment, haircuts, clothing etc and according to your soa more than enough although I doubt your soa is accurate.


So with a joint income of £2900 you will have £1200 to cover bills as you have at the moment. £400 as personal spends. £675 to cover debt repayments and overpayments initially. £50 to emergency savings and maybe £100 to cover annual bills like insurances and car maintenance, presents, holiday. That leaves you £475 to cover groceries, fuel and joint entertainment.

zippygeorgeandben

Andrew, I wish you the best of luck with this. You and your wife seem determined to sort this out once and for all. You also come across as a lovely polite person! Good luck, we will help you along the way, this board has some really supportive, yet extremely knowledgable people!

enthusiasticsaver

So to clarify I would either arrange for your salaries to go into the joint account and then do all transfers as suggested above to your personal accounts, emergency savings account, annual bills savings account and a monthly spends account in joint names. All debt repayments also come from joint account.

Alternatively if you wish to keep your finances separate you just split the costs as you do now. £600 each to bills account. Debt repayments either split in half or you pay slightly more to account for your salary being larger. Household spends I would recommend you go joint with so again if you each paid £235 to an account you only use that for fuel, entertainment and groceries. That would keep you on budget. Same goes for savings accounts for annual bills and emergencies. £75 each.

theoretica

Is the new job you are hoping for higher paying? Don't get used to spending this money - send it all to the debts and then savings.

Andrew_P

enthusiasticsaver wrote: »

Which bills showing on the soa are paid from the joint account? Obviously the mortgage, utilities, service charge but what about mobiles, car expenses and insurances? You have £1200 each month to cover bills but your fixed bills only appear to come to £1004 if you pay things like car insurance, tax and buildings and contents insurance annually. Where do these come from? What about fuel, groceries and entertainment, the unsecured debt repayments and presents, holiday etc?

Personally DH and I always found it best to have joint household account with all bills coming from there and then each have a personal account with the same amount of disposable income for personal things like gifts to each other, personal entertainment and hobbies and clothes etc. Everything else went to a joint account with some transfers to savings accounts. Is this something you could both consider? You might find it easier to work from the same page if most of your income went into a joint account..


If you have two council tax free months if you pay over 10 months you could use the £116 you normally pay to council tax to start off your emergency savings account which should be ideally an account you do not touch except in dire emergency. If you did 2 months at £116 that would give you £232 and you could then pay in say £50 a month until it gets to £1000 which is the normal starter emergency fund recommended. That should not impact on any debt repayment.


Personally I would put your joint incomes into one account and then perhaps transfer £200 into each of your accounts as personal spends. That would give you £200 to cover entertainment, haircuts, clothing etc and according to your soa more than enough although I doubt your soa is accurate.


So with a joint income of £2900 you will have £1200 to cover bills as you have at the moment. £400 as personal spends. £675 to cover debt repayments and overpayments initially. £50 to emergency savings and maybe £100 to cover annual bills like insurances and car maintenance, presents, holiday. That leaves you £475 to cover groceries, fuel and joint entertainment.

Mobiles come out of our own sole accounts, things like car expenses and insurances I used to put on credit card when they were due so these were not budgeted for.

Its tricky as we have just spent on credit without keeping track and that's partly how the virgin card has ended up being so much as I have just done money transfers to pay off spend on my Tesco card.

Definitely could be an option having both incomes paid Into our joint account and then transfer spending money to our sole accounts. I have spoken to my wife about having every bill coming out of our joint account even our own mobile bills.

Andrew_P

theoretica wrote: »

Is the new job you are hoping for higher paying? Don't get used to spending this money - send it all to the debts and then savings.

It's the same money to start with if they are not open to any salary negoitation, but might be more chance of me getting a better pay rise than my current job which I hate. Anything extra I do earn will certainly go towards the debts