Want to get out of my credit card

Sncjw

I’ve been told not to put it on the soa as it’s doubling the amount I have spent.

I’m so confused.

I’m just going to leave it

DrEskimo

Sncjw wrote: »

I’ve been told not to put it on the soa as it’s doubling the amount I have spent.

I’m so confused.

I’m just going to leave it

Yea sorry, my advice, and it seems others as well, is to not put the Credit Card debt on the SOA. Leave that blank.

We are suggesting you go through you credit card statements over the last few months, and work out how much is going towards food, how much is towards entertainment, how much is towards personal spending, etc. etc. You can then place those amounts in their respective sections in the SOA.

This will allow you to determine whether the amount you are spending on these areas is sensible, or whether you could be more careful and save more money each month.

The exact method you use to pay for each of the items on your SOA isn't really important. I for example use a credit card to do all my food shopping, personal spending and train tickets. Some insurance is paid on it, some is paid directly from my bank account. This is just because I can get some cash back on those spends. I don't list my credit card amounts on my SOA though. I clear it each month and there is no balance still left to be paid, so it is not a debt. It's just a method of making payments!

Hope that's a bit clearer

getmore4less

Sncjw wrote: »

I’ve been told not to put it on the soa as it’s doubling the amount I have spent.

I’m so confused.

I’m just going to leave it

Once get a handle on where you money goes you will feel a lot better about how much you have left before the new money arrives.

Stick with it, once it clicks it will suddenly become clear.

easterbunni

EssexHebridean wrote: »

Brookside YNAB can be great for some people but the OP currently is totally new to budgeting like this by the sound of things - they need to learn how it all works and at this stage learning the ropes manually means they'll have a better understanding of the process. A budgeting app may well be a great way forward for them in the future, just probably not right now.

But that's precisely what YNAB is for, teaching you how to plan how you are going to use your money.

DannyPearce90

The issue with not including it on a statement of affairs is the interest (which is in essence a monthly cost) will not be included.

getmore4less

DannyPearce90 wrote: »

The issue with not including it on a statement of affairs is the interest (which is in essence a monthly cost) will not be included.

CC paid off in full usually have no interest.

When used for normal spends and always paid off it can be left off if no charges.

A CC carrying debt does need to be included.

enthusiasticsaver

It looks like we have confused you OP. The soa is a budgeting tool and needs to be filled out with accurate accounts of what you spend. Now it seems like you use your credit card a lot for monthly spends and then pay it off in full each month which is excellent and exactly what you should be doing. Technically that means it is not debt, no interest is paid and you do not carry it forward until a later date to be repaid. I do the same.

For the purposes of budgeting though that £429 should be categorised into groceries, household stuff, gifts, fuel etc etc. So it should appear in the relevant categories in the soa and not included as credit card debt because you will have paid it off.

I think to make things easier for you it might be best to stop using the credit card for everything and just use for one category. You don't have a car, presumably the credit card was higher in December because of buying gifts but normally your major spends are on groceries.


If I were you I would open an emergency fund and make sure you pay at least that £25 a month into it. I think you could afford more once your budget is on track and you have got rid of that big December credit card bill.


I would add up what you spent on Christmas 2018 and aim to save that by this November so you do not need to put Christmas 2019 on a credit card.


I would use your credit card for groceries only and aim for it not to go above £80 a month which is the amount you reckon you spend on food. I think personally that is a bit low and I think if you analyse your credit card spend for the last three months it will be higher than that.


Good luck on getting your finances on a more even keel.

enthusiasticsaver

Sncjw wrote: »

I have lived here for 7 months

Some water authorities only bill for water every 6 months so that might be why. As I live in the extortionate South West where water costs more than fuel we pay monthly. The bill might be a bit high when it eventually arrives so even more important to start saving once you have sorted out your finances.

BabyStepper

First of all I want to congratulate you on saving up £4 k. Well done! That's more than most people on here have achived so you are way ahead of the pack. Nice one! Clearly you are living well within your means and have a handle on how to budget.

I would like to risk further confusing you by offering my thoughts about how to stop using your credit card.

Step 1 You may need to keep using it intil the end of the month, but when you get paid, take your credit card out of your purse and put it away somewhere. You are not going to use it for monthly expenses from pay day onwards.

Step 2 Treat the credit card balance as a debt and decide how much you want to pay towards it each month. Say £100?

Step 3. Pay your cc along with your other bills and live on the rest of your wage.

You may pay a slight bit of interest but the balance is small so who cares, you have solved the problem. £100 a month will have the card cleared in just over 5 months. If you are very frugal you could pay £150 and have it gone in 3 months. You decide.

After that your wage is your own to do what you like with. Have a christmas savings pot, start a clothing fund, whatever. You know what you're doing, you already saved up a LOT of cash.

getmore4less

No wonder the OP is getting confused there is no need to over/add complicate something that is relatively simple.

They have a £250 CC bill to pay they can just pay that off and start using the debit card/cash for everything now.

I am not minus in anything g at the moment but I do get a bit panicky when under a certain amount t of money. I need to put money aside for upcoming things. I check several times in a month on a calculator of what I will ha e left after bills and spending to pay credit card off and to save money.

Currently the OP is balance watching to manage cash flows.

What the OP needs to do is plan better looking ahead and spending to plan the can be more comfortable that they won't run out of money and stop panicking.

The SOA was getting there needed a few tweaks and a spending diary would have sorted out quite quickly.