"Lightbulb moment - 67k down. Need to execute a recovery plan"

MrFrugalFever

How quickly do you think you can get shot of CC’s S & C? Will it be feasible to do so by say October? What will that free up per month for you to put in to H CC?

progress is being made and it is just a long game now, stick with it as it will all be worth it in the end!

TheAble

Putting H at the bottom of the pile is the way. The others are at 30% vs 20% (to be) H so they take priority.

bamgbost

MrFrugalFever said:

How quickly do you think you can get shot of CC’s S & C? Will it be feasible to do so by say October? What will that free up per month for you to put in to H CC?

progress is being made and it is just a long game now, stick with it as it will all be worth it in the end!

Yes I reckon defo both S &C will be done by October at the latest. At current rate.

bamgbost

katsu said:

As you have credit cards charging 30% interest I would pay the money off the debt rather than having a £1k emergency fund. Think about what you really need money for, and why. That's £300 in interest that you are paying to have that EF so it's something to bear in mind. 

Saving money for annual bills is different and I would recommend you do that. I just think with the size of your interest rate the question is what emergencies could you have and what is that £1k for, that it is worth £300 a year to you. 

I hear you Katsu, and thought the same as you initially. But then there was an occasion a couple months back with car issues that meant i had to re-use a credit card. So in order to encourage my change in mindset, rather than default go back to credit. Let me have funds to ensure I dont have to.

So that 1k... is just in case money. Plus.. its apparently a proven formula by the one and only Dave Ramsey lol. So I thought 1k isnt gonna break my plans drastically.

badmemory

The great thing about an EF is that if you have one you probably won't need it, but if you don't have one then something is bound to go wrong.  It can remove a lot of stress & be cheaper to repay than a credit card.

anjyeah

I agree with the just incase money part. I was given similar advice on my emergency fund versus high interest CC and for someone to manage even keep the funds in the first place in her account - I like to be reminded of that win. 
Glad I bumped into this diary now. Well done on your progress so far! 

Jensfrugalyear

Just read your diary after you had commented on mine and wow you have done amazing! I wish I had started my journey last year (hindsight is great isn't it 😂).
Its been good to read the comments about the emergency fund as this is something I don't have and have been indecisive about. Think my plan is to start it after my next credit card is paid as I'm pretty annoyed with the one I'm paying off currently.
Did you start selling anything to help with the overpayments? I've started to out stuff on Facebook marketplace and I know whenever I put kids stuff on it gets snapped up. I just need to go up the loft to sort the old stuff we have been hoarding up there.
Looking forward to seeing how you get on and I'm sure you'll be debt free in no time!

TheAble

bamgbost said:

katsu said:

As you have credit cards charging 30% interest I would pay the money off the debt rather than having a £1k emergency fund. Think about what you really need money for, and why. That's £300 in interest that you are paying to have that EF so it's something to bear in mind. 

Saving money for annual bills is different and I would recommend you do that. I just think with the size of your interest rate the question is what emergencies could you have and what is that £1k for, that it is worth £300 a year to you. 

I hear you Katsu, and thought the same as you initially. But then there was an occasion a couple months back with car issues that meant i had to re-use a credit card. So in order to encourage my change in mindset, rather than default go back to credit. Let me have funds to ensure I dont have to.

So that 1k... is just in case money. Plus.. its apparently a proven formula by the one and only Dave Ramsey lol. So I thought 1k isnt gonna break my plans drastically.

It's definitely worth the £300/year interest cost, because of the psychological benefit it brings. It's important to have a few quid to call your own when paying off debts - lack of this and having to rely on more credit when unexpected expenses crop up causes many to falter.

MrFrugalFever

Stick with the security blanket of £1k EF, it will far outweigh any psychological benefit over a small amount of interest in the grand scheme of things (£1k vs your Total Amount Payable).

I had a bit of a spendy month this month (first one since beginning of the year as have been doing ‘No spend months’ and I have to say, I actually feel a little guilty for it, although I know the majority was needed to a lesser/greater degree!! Weird times.

bamgbost

Jensfrugalyear said:

Just read your diary after you had commented on mine and wow you have done amazing! I wish I had started my journey last year (hindsight is great isn't it 😂).
Its been good to read the comments about the emergency fund as this is something I don't have and have been indecisive about. Think my plan is to start it after my next credit card is paid as I'm pretty annoyed with the one I'm paying off currently.
Did you start selling anything to help with the overpayments? I've started to out stuff on Facebook marketplace and I know whenever I put kids stuff on it gets snapped up. I just need to go up the loft to sort the old stuff we have been hoarding up there.
Looking forward to seeing how you get on and I'm sure you'll be debt free in no time!

Thanks for the encouragement.

I defo echo an emergency fund, as the others have said. Hopefully will be at the £1k mark before month end.

I have sold a few things on ebay / facebook. But where I have been able to make a bit extra, is through offering services like interview coaching (via. fiverr or paidperhour), tutoring, gardening services, etc. So if you have any skill to offer that could be a good way to bring in extra funds.

Will continue to follow your journey too. good luck!