Debt free before August 2023

savingholmes

Fantastic news. Delighted for you

Poppy1984

savingholmes said:

Fantastic news. Delighted for you

Thank you @savingholmes 😁😁 that means such a lot, thank you for the support along the way ☺️  

Poppy

savingholmes

You are so welcome

Poppy1984

I'm starting to have a think about some financial goals, i want to make sure I've got all my "pots" of money set up for various things that I pay annually. 

I also want a Christmas savings pot, a gifts pot and a holiday pot set up. 

I'm a bit unsure about an emergency fund, I know the importance of one. I currently have £1,575 in my help to save account which I can access at any time but because of the interest rate I don't touch it as a rule, but if I needed it in an emergency I could access it if that makes sense? However if I leave the money in there and continue to add £50 a month until July 2023 I will get my full bonus payment of £600 so ideally I want to leave the money in until July 2023 when it will automatically close and I will have £3,000.

So I guess what I'm trying to work out is do I create a separate emergency fund that I can access and won't affect my help to save account, how much? £300? 

Any suggestions welcome 🤗 

Poppy

FootyFanDan

Just caught up - I am absolutely made up for you, well done Poppy 

capuchin

@Poppy1984 I think it depends how you feel about credit. If in the first instance you're happy to use purchase free balance transfer funds etc in an emergency, and only dipping into the other if the !!!! truly hits the fan, then I'd say keep using the help to save as it's only 18~ months away.

A lot of this depends on your 'scope for an emergency' I feel and how long it would take to replenish £1600 in a reasonable worst case if you did put it on purchase cards. If that makes sense.

Poppy1984

FootyFanDan said:

Just caught up - I am absolutely made up for you, well done Poppy 

Thanks so much @FootyFanDan 😁 it doesn't feel real at all! 

Hope you're feeling better? 

Poppy

Poppy1984

capuchin said:

@Poppy1984 I think it depends how you feel about credit. If in the first instance you're happy to use purchase free balance transfer funds etc in an emergency, and only dipping into the other if the !!!! truly hits the fan, then I'd say keep using the help to save as it's only 18~ months away.

A lot of this depends on your 'scope for an emergency' I feel and how long it would take to replenish £1600 in a reasonable worst case if you did put it on purchase cards. If that makes sense.

Hmmm 🤔 @capuchin I'm not loving the idea of using credit so soon after becoming debt free even on a 0% interest. So I guess I either need to build up an emergency fund or make peace with the thought of dipping into the help to save. The issue with withdrawing money from the help to save is that if you withdraw any money it then effects how much of the bonus payment you receive so ideally I don't want to withdraw any of it until July 2023 so that I receive the full £600 bonus payment. 

I think the best thing to do would be to build up a separate emergency fund of £1,000 and while it's building up if I have an emergency that's more than what I've saved up I'll have to use my help to save. 

Poppy

savingholmes

Hi Poppy 

I would work out what's your basic bill level with no frills. Start at £500 savings, then move to £1K and then see if you can cover 1 month expenses and then gradually building it up to 3-6 months or more depending on how secure you feel in your job etc. But definitely break it down into chunks so you feel a sense of achievement.

Poppy1984

savingholmes said:

Hi Poppy 

I would work out what's your basic bill level with no frills. Start at £500 savings, then move to £1K and then see if you can cover 1 month expenses and then gradually building it up to 3-6 months or more depending on how secure you feel in your job etc. But definitely break it down into chunks so you feel a sense of achievement.

Hi @savingholmes thank you that's good advice. Basic bills no frills is £405 so I will start with that then move on to £1,000. Because life has been so tough and I've been on such a tight budget for the last almost 4 years I don't want to go straight from that to putting all my money into saving 3-6 months expenses and not having anything nice. Just feels like an awful lot of money just sat there "just in case" and probably not earning much interest. However it's probably the sensible thing to do to prevent me getting back into this horrible mess again. 

Hmmm one to ponder on I guess, I think I will set my self the target but to build it up gradually and not put the pressure on myself to get it in a certain amount of time. I definitely want to loosen the purse strings a little. 

Poppy