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

MrFrugalFever

In the grand scheme of things, £1,000 off of a £50k+ debt pile is relatively insignificant at this stage, I would keep it back for EF and be very strict about this. 

The psychological impact of having to add further debt during your journey because you didn’t have an EF to fall back on, in my opinion, will far outweigh whatever gain you get from paying that £1k in to your debts right now.

just my own two pennies worth.

bamgbost

Thanks MrFrugal...I think your right.

All the stats, the experts and history point in the direction of having an Emergency Fund. As it is bound to prove useful at some point on this debt free journey.

I think I better stick to the proven formula!

One-step-at-a-time

Having sat on a 50k debt pile myself, I'm massively in favour of keeping an EF. Being able to replace a busted appliance without fretting about adding to the debt is a good feeling. It happened to us again recently and I'm making sure that the EF is getting back to where I want it over the next few months.

Bizzywizard

Hi,
I have an EF now my debt has GONE. Martin Lewis states on the main site to use your savings/EF as the interest you're incurring on your debt is more than what you would make in interest. Have a read, its worth it!. 
Bizzy

MrFrugalFever

Bizzywizard said:

Hi,
I have an EF now my debt has GONE. Martin Lewis states on the main site to use your savings/EF as the interest you're incurring on your debt is more than what you would make in interest. Have a read, its worth it!. 
Bizzy

I think you’re confusing savings with an actual emergency fund, the purposes of which are greatly different. I agree that you shouldn’t have savings sat earning nothing whilst paying large amounts of interest.

the emergency fund is vital to function when in a large amount of debt and provides a psychological way out when the brown stuff hits the fan, it’s long since been recommended to achieve £1,000 in funds for only emergencies.

bamgbost

Thanks for the advise guys... A lotta stuff came up unexpectedly, that needed dealing with so low n behold a lot of the bonus went elsewhere.fortunately i did put £250 towards an EF. And at least have got that fund started. Need to get that to 1k as a priority.

I totalled up the list today, and its sitting just above 50k! Still a huge amount, but down significantly from a year ago @ 67k! Approximately 25% down - So its moving in the right direction.

I appreciate all the tips, advice and encouragement from the MSE clan! Its really helped motivate me.

bamgbost

Emergency Fund is in motion. currently @ £350.

The forecast this month on my sidehustles is looking quiet, So progress is likely to slow down a little. But I still hope to clear my smallest CC by hook or by crook.

Also we are back to school holidays, so food budget will increase again with kids at home. Wish me luck!

Buffythedebtslayer

Just read your Diary, 

Amazing! such amazing progress. Impressive. 

bamgbost

Been quite a while… head down trying to juggle that thing we call LIFE.

DF Journey has been progressing a lot slower recently. As we try to live a little  and make steps to build up an Emergency Fund, alongside reducing debt.

The side hustle side of things has had its ups and downs but keeping the debt amount moving in the right direction . So grateful for everybit that comes in.  The amounts left currently stand at:

 

CARDS	Amounts	Interest
S CC	1055	30%
M CC	2151	30%
H CC	4052	20% (0 til Sept 2021)
C CC	1873	30%
Loans
A L	7020	9
B L	9462	14.9
R L	9,810.00	14.9
H L	13700	7
TOTAL	49123

 Focus in still on reducing the CCs one by 1. Ticking them off in order of smallest to largest balances. (physcologically helps with ticking them off quickly )

H CC, is looking pretty ominous, as Im worried the 0% will soon run out. And with the high debt levels we wont be able to transfer it to another 0%. Eeek!

 

Anyone see any flaws with this approach? Or suggestions?

katsu

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.