What would you do (CC Pay off or Mortgage overpay)

mcpitman

Morning,

SOA as below, have some "spare" cash monthly.
Will need to consider financing a new car within the next year and do not wish to borrow. Car has 150k miles on it, owned since 23k miles, and potentially heading towards end of life.
2x CC's with larger balances are on 0% until Oct-21
1x CC with smaller balance is on 0% until Dec-21
Can overpay on mortgage, pay down CC's or put some in savings for a new car (so i don;t have to borrow for it)
Any feedback on the wider expenses would be good to.

Essentially trying to "tune" my expenses rather than completely slash costs, but open to all options and feedback.

Household Information

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 2

Monthly Income Details

Monthly income after tax................ 4162

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0

Total monthly income.................... 4162

Monthly Expense Details

Mortgage................................ 476.5

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 120

Electricity............................. 45

Gas..................................... 45

Oil..................................... 0

Water rates............................. 38

Telephone (land line)................... 0

Mobile phone............................ 32

TV Licence.............................. 12

Satellite/Cable TV...................... 115

Internet Services....................... 0

Groceries etc. ......................... 300

Clothing................................ 100

Petrol/diesel........................... 600

Road tax................................ 40

Car Insurance........................... 70

Car maintenance (including MOT)......... 200

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 30

Pet insurance/vet bills................. 25

Buildings insurance..................... 10

Contents insurance...................... 10

Life assurance ......................... 15

Other insurance......................... 0

Presents (birthday, Christmas etc)...... 200

Haircuts................................ 50

Entertainment........................... 100

Holiday................................. 200

Emergency fund.......................... 100[b]

Total monthly expenses.................. 2933.5

[b]

Assets[/b]

Cash.................................... 5000

House value (Gross)..................... 135000

Shares and bonds........................ 0

Car(s).................................. 3000

Other assets............................ 0[b]

Total Assets............................ 143000

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 94731....(476.5)....2.04[b]

Total secured & HP debts...... 94731.....-.........-   

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

BC.............................0.........0.........0

MBNA...........................9000......90........0

Nationwide.....................11000.....110.......0

M&S Card.......................3000......45........0

Total unsecured debts..........23000.....245.......-  [/b]

Monthly Budget Summary

Total monthly income.................... 4,162

Expenses (including HP & secured debts). 2,933.5

Available for debt repayments........... 1,228.5

Monthly UNsecured debt repayments....... 245[b]

Amount left after debt repayments....... 983.5[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 143,000

Total HP & Secured debt................. -94,731

Total Unsecured debt.................... -23,000[b]

Net Assets.............................. 25,269[/b]

shoppingobsessed2020

As the debt is 0% I’d be inclined to put a good £800 aside every month and overpay the remainder of the spare cash on the mortgage.  Then you have the money to repay a Card if you’ve not had to finance/buy a car using cash.

Willing2Learn

Sorry, I haven't got time right now to take a deep look at your SOA.

But I wanted to say, that with a straight choice, I would be snowballing the cards and leave the mortgage alone.

Edit:  My thoughts on your SOA:

How come your water rates are so high?  Are you paying across 10 or 12 months and are you metered?
OMG - You must love sports on the TV when you are paying £115/month.  But you can afford it, so no problem.
Wow, you spend a lot on fuel (petrol).
Everything in your SOA is fine.  You are obviously sticking to your budget 

And that concludes my thoughts 

btw, If it were me, I would be putting the money aside into a savings pot for the new motor...

EimearF

Are you actually spending £2400 on maintenance? Is you insurance £840? I would save for a new car as this one is not economical! 
After that clear the cards. Once you are debt free then focus on the mortgage. I tried overpaying my mortgage whilst in debt and it just added another spinning plate for me. 

mcpitman

@WillingToLearn
How come your water rates are so high?  Are you paying across 10 or 12 months and are you metered?
We pay over 9 months, but 38pm is the amount corrected to 12 monthly payments.
OMG - You must love sports on the TV when you are paying £115/month.  But you can afford it, so no problem.
That's TV, BB, Landline, and a mobile, but yes we like movies, i'm motorsports mad,and saves us money on Cinema trips
Wow, you spend a lot on fuel (petrol).
That is the cost for both cars for the month, but I have a big commute (about 30k miles p/a or £100p/w - diesel)
Wife's car is about £50 per fortnight (petrol)

@EimearF
Are you actually spending £2400 on maintenance? 
That's for 2x cars;
  -   the big one (Insignia) gets -  2 services per year and a pair of tyres annually, cambelt is due this year too (150k miles completed)
  - the small one (Astra) gets one service a year, bi annual pair of tyres and will need front and rear brakes doing this year.
I build this amount monthly over a year, any spare at the end of the year get's put into the £5k savings pot that has literally grown from this initiative.

Is you insurance £840?
That's for 2x cars, mine is £500 and wife's is £340 p/a. Pay annually but this pots saves the annual bill (same as above).

I would save for a new car as this one is not economical! 
For 2x cars I don't consider it too bad. As per the OP, I want to save for a new car, but wondered where best to point "spare" cash at the moment.

mcpitman

Thanks for your feedback so far guys, any further help appreciated.

All amounts "monthly" apart from Mortgage and unsecured debt repayments are all individual pot amounts that save up monthly to pay for things "a year ahead".
The £5k savings pot has built itself up with excess from these amounts saved, when renewal has been cheaper or better deals sought.

I am minded to go with @Willing2Learn advice of smashing the card debt down for now.

P.s. just checked my TV renewal and that's due 1st June so will contact them soon to see what deals are about.

DrEskimo

Given the current climate I think I would concentrate on building your cash reserves. I think perhaps a split between paying down the CC and building savings, but with a stronger emphasis on savings. 

You have a fairly large amount on CC. What was this for? Given the surplus, have these areas of overspending been addressed?

Looking towards the future car purchase, I would also consider a used EV given your mileage. I bought one last year and the savings have been nothing short of remarkable!

mcpitman

DrEskimo said:

Given the current climate I think I would concentrate on building your cash reserves. I think perhaps a split between paying down the CC and building savings, but with a stronger emphasis on savings. 
I am minded to agree with you, I only need c5/6k for a "new" car, but would like to keep the current £5k for "rainy days and mishaps".
The other thought for me is if I concentrate on the CC's I won't have anything apportioned to buy a vehicle with, so may need to MT from a CC @2%.

You have a fairly large amount on CC. What was this for? Given the surplus, have these areas of overspending been addressed?
In short yes.
This is the end of a very, very long journey, which started about 12 years ago. Recent successes in employment have lead to an increased annual compensation in the last 3 years. I've already paid off more than I currently owe and generally sorted my life out. (admittedly with much assistance from here, minimal poster, long time lurker).

Looking towards the future car purchase, I would also consider a used EV given your mileage. I bought one last year and the savings have been nothing short of remarkable!
EV = range anxiety! LOL. There aren't any charging points at work (or home) and my last 2 cars i have bought without finance, owned for c5yrs, then chopped on at high mileage/end of life.

Commute is 150 miles per day, 3 days per week, the other 2 days can be commuting c300 miles per day or at home dependent on workload. Currently drive a 2.0l diesel mile muncher that pulls about 50mpg on a mixed cycle and towards 60mpg when driven like a nervous nun with a basket of kittens on the passenger seat.

If it were the smaller car (Astra) that needed changing EV may be an option, but that's only a year with us and has no upcoming high costs or forseeable issues, so better the devil you know in that case (for now).

Brill advice and challenges again guys, thanks.

Called Virgin, new contract negotiated at £85pm so this thread alone has saved me £30pm in real time.

mcpitman

Hi all,

Bit of an update to log my journey as below; progress a little slower than first thought, but progress nonetheless.

Still not changed the cars, still at the same house. Debt reduced by 8k in 17 months.

Recently had a change of job role and increased compensation, so recalculating against refreshed debts and income below. New job role is a permanent home based role so has reduced fuel bill considerably.

Statement of Affairs and Personal Balance Sheet

Household Information

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 2

Monthly Income Details

Monthly income after tax................ 4857.18

Partners monthly income after tax....... 0

Benefits................................ 0

Other income............................ 0[b]

Total monthly income.................... 4857.18

Monthly Expense Details

Mortgage................................ 465

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 104.16

Electricity............................. 65

Gas..................................... 35

Oil..................................... 0

Water rates............................. 40

Telephone (land line)................... 0

Mobile phone............................ 75

TV Licence.............................. 13.37

Satellite/Cable TV...................... 98

Internet Services....................... 0

Groceries etc. ......................... 400

Clothing................................ 100

Petrol/diesel........................... 200

Road tax................................ 40

Car Insurance........................... 60

Car maintenance (including MOT)......... 100

Car parking............................. 0

Other travel............................ 0

Childcare/nursery....................... 0

Other child related expenses............ 0

Medical (prescriptions, dentist etc).... 0

Pet insurance/vet bills................. 45

Buildings insurance..................... 10

Contents insurance...................... 10

Life assurance ......................... 15

Other insurance......................... 0

Presents (birthday, christmas etc)...... 200

Haircuts................................ 400

Entertainment........................... 100

Holiday................................. 200

Emergency fund.......................... 100[b]

Total monthly expenses.................. 2875.53

Assets

Cash.................................... 5000

House value (Gross)..................... 135000

Shares and bonds........................ 0

Car(s).................................. 3000

Other assets............................ 0[b]

Total Assets............................ 143000

[b]

Secured & HP Debts

Description....................Debt......Monthly...APR

Mortgage...................... 91928....(465)......1.94[b]

Total secured & HP debts...... 91928.....-.........-   

Unsecured Debts

Description....................Debt......Monthly...APR

MBNA...........................8900......225.......0

Virgin.........................6250......63........0

Barclaycard....................0.........0.........19.9

MBNA...........................0.........0.........0

M&S............................0.........0.........0

Halifax........................0.........0.........0[b]

Total unsecured debts..........15150.....288.......-  

Monthly Budget Summary

Total monthly income.................... 4,857.18

Expenses (including HP & secured debts). 2,875.53

Available for debt repayments........... 1,981.65

Monthly UNsecured debt repayments....... 288[b]

Amount left after debt repayments....... 1,693.65

Personal Balance Sheet Summary

Total assets (things you own)........... 143,000

Total HP & Secured debt................. -91,928

Total Unsecured debt.................... -15,150[b]

Net Assets.............................. 35,922

Kat78MFW

Wow - you are doing so well. It must make such a difference to your work/life balance to have dropped all the commuting and work from home.

Just one thing on your SOA - £400 per month on haircuts. Please tell me that's an error!

May be worth budgeting a bit more for your gas/electric, even if you're currently on a cheap fix as the price will shoot up once your current deal ends.

You look to have a huge surplus each month now so you should be debt free in no time at all. Brilliant - well done. 

Brie

Presumably the Virgin & MBNA cards are finishing their 0% this month?  Any chance of doing something about that??  Move them on to another 0% somewhere??  

I know people talk about emergency funds and so you've got £5k which is nice but why not sling it at the cards??  For one thing it would make for smaller balances to transfer to another card and so save you on the transfer fee(s).  And should you have an emergency you have the huge available credit on the cards available to tide you over.  Whether it would be better to tackle both the cards at the same rate or try to clear the smaller balance first may depend on what you will get charged should you not clear everything by the time the BT ends.

But well done!  And nice to know you've managed to get along with having to get that new (to you) car just yet.