Practical Advice

EimearF

Hi All,

I am a long time lurker and people’s stories here have really helped motivate me to clear my debt. We now only have one card £5300 interest free until March 2021.

Some background about me. I was always a saver never in card debt until I bought my house. It was a fixer upper and we took our loans and cards to complete the work. Once I was in debt I no longer cared how much, queue fancy wedding and multiple holidays a year on cards. At one stage we had over £50k non mortgage debt.

The reason for my post is I am torn as to what to do about repair work to damage to my garden a cow boy builder cause. I will need around £5k to fix this. It’s not an option not to fix as there is a risk to my neighbours property. The work can’t be done until spring so I will need £5k cash by end of March.

I can pay around £2k per month off debt. My question is should I put £1k in savings for the garden and the rest off the card or try and clear the card ASAP? I’m worried that if I don’t save the money and I have to borrow it that I’ll slide back into the debt cycle.

Thanks for reading! Any thoughts?

fatbelly

So £5300 of debt is nicely tied up at 0% (you've paid the BT fee) for the next 18 months. I'd leave that alone and just pay the contractual minimum which, depending on the card, might be £50 - £150 per month. Pay off the remaining sum with your savings in 2021.

You now need 5k cash in 5 months and have 2k surplus per month. That doesn't seem to be a problem. Regardless of the upcoming job, you should be saving regularly and getting the best interest rates you can. This will depend on who your bank account(s) are with and where you live.

https://www.moneysavingexpert.com/savings/best-regular-savings-accounts/

EimearF

Thank you Fatbelly. It’s so conflicting as some people like Dave Ramsey say clear the debt no matter what. I guess I needed to hear a different point of view before making my decision.

I have a Marcus account for my emergency fund where I intended to ramp up savings once my debts are cleared. So I’ll shift my monthly surplus in there from my next payday.

fatbelly

I don't think Dave Ramsey was ever a 'stoozer'!

https://www.moneysavingexpert.com/credit-cards/stooze-cash-credit-cards/

EimearF

Haha, no! I don’t really agree with him on him extreme anti debt approach. But he is a good motivator pointing out how stupid it is to keep spending money you don’t have! I think I got sucked a little far into his mindset and thought I must pay this card before anything else!