how or when should you refinance a loan

catlady1990

Yeah I haven't needed to touch my credit cards since we moved because everything is budgeted for in the account my partner and I pay money into. That covers rent, all bills, TV subscription, emergency fund, holiday savings, food, contents insurance (which I forgot to put on the soa). So we each pay in £37 a week plus £350 a month to cover rent.
I'm now using the money saved in my chip account to pay off my credit cards, instead of saving it to pay my car off in a lump sum.
I guess I could do the same thing with my plum account. So use both accounts to attack my little debts.
Then continue to pay the loan and the car.
I will get there with this.

enthusiasticsaver

catlady1990 wrote: »

Yeah I haven't needed to touch my credit cards since we moved because everything is budgeted for in the account my partner and I pay money into. That covers rent, all bills, TV subscription, emergency fund, holiday savings, food, contents insurance (which I forgot to put on the soa). So we each pay in £37 a week plus £350 a month to cover rent.
I'm now using the money saved in my chip account to pay off my credit cards, instead of saving it to pay my car off in a lump sum.
I guess I could do the same thing with my plum account. So use both accounts to attack my little debts.
Then continue to pay the loan and the car.
I will get there with this.

Interesting. I have never heard of chip and plum account so have just googled it. Does it work ok for you and do you have savings in them? I assumed not as your soa shows no cash but you obviously do?

catlady1990

Any spare money that is in the account gets automatically moved out by chip and plum. I then move that money onto my credit cards / back into my account as and when I need it. It's not actually saving but it means the money isn't in my account so I can't spend it.
It's minimal money, at a maximum I have about £40 in plum and chip at the richest point of my month.
I don't count it in the soa because it moves automatically and I move it back if I can't afford it.
I find it's a good way to not spend money that I don't actually have because of my credit cards and loans. It would be great if I could actually use it as savings :cool:

EssexHebridean

catlady1990 wrote: »

Also I get mileage back if I am at one of three clinics which isn't my home clinic. So if I am sent to other places I get the 45 pence per mile back and I travel up 28 miles there and back a day. I don't add that onto my budget though, as it varies so much from week to week. So it's easier to blank out at £120 a month, as the cash I get back goes straight on fuel anyway.

Except that this doesn't work - as you're "losing" the money that comes back to you, currently. Look at it this way - in a month you do an average of 100 miles which you claim back. That is £45 a month that comes back into your budget, but currently you're not accounting for. Over a year that is over £500 that is just disappearing because it's not accounted for. To make a budget work you need to know exactly what goes out, sure, but also you need to know exactly what comes i - while that might vary a bit month on month, you still need to be aware of it, even as an averaged amount.

catlady1990 wrote: »

The loan has helped though, as the only thing that was extra after the loan was my car finance. What about the £1000+ on the credit cards? Which I got because my old car went completely bang and exploded.
I am just wondering whether cutting down the time on the loan will be better. So it was originally for 6 years but I am coming up to the 1 year mark and with consolidation everything including the car and the loan would be paid off by 3 years. And have you checked that you could actually get a loan of the right amount, for a 3 years term, and still afford the payments?
On the plus side, I now have a one job regular income instead of before where I was balancing two jobs. Nearly killing myself and never had any money to show for it.
Now I'm salaried at £18284.98 which means every month I get at least £1300 + overtime due to the nature of my job. It's not a lot compared to some people but it's been much easier to budget over july / august.

Again, you need to either budget an average amount for the overtime OR make a deal with yourself - that you stick to - to pay anything extra off again the debts EVERY month, no exceptions.

catlady1990 wrote: »

We live in a shared house so bills are included in our rent which we have. Contents insurance we are covered through our bills which we split every week anyway.

If I'm at work, I take lunch and at home we tend to eat at home. On the rare occasion we go out for food or takeaway, it's already budgeted again in the money we set aside each week.

I rarely shop to be honest

Check that is definitely the case on the contents insurance - it's not always (Usually?) included in shared house rents.

You're currently under budgeting for car maintenance I'd guess. You do quite high mileage and a car the age of yours will need servicing at least annually on that sort of mileage - possible more frequently than that. That's going to cost you at least £100 a time. Then add in a set of tyres annually as well allowing for that mileage, as well as all the other bits and bobs that come up - wiper blades, screenwash, even getting it washed, unless you do it at home, with a sponge and a bucket (I'm guessing not - would I be right?!) . I'm assuming that it's not that far off needing an MoT Test now either? So again, you need to be budgeting for that. As you also know from bitter experience you also need to accept that at some stage - and yes, currently that might be 10 years away, but still - it's going to die in a big way and you're going to need a replacement - again, something else that needs to be factored in to your budgeting, ideally. Also you mention it being covered by warranty - does this also tie you to needing to use a main dealer for servicing or at least an authorised garage? If so that may be costing you more than a little backstreet outfit would. As a plus side on the car front well done for not going the PCP route - at least the car will be an asset and the payments are actually giving you something back!

I'd not heard of Chip or Plum either so again - googled. Is there an advantage in having two apps to do the same thing or does it just over complicate things?

You mention your joint account with your partner covers emergency fund savings - but you've not got anything on your SOA for that and you;'re showing nothing in cash assets either so is that definitely what's happening?