Leaping from debt free to self employed

Sarahwithlove

CreditCardJunkie said:

Thanks all! With the 3 months expenses, those in couples are you supposed to have 3 months expenses for both couples?!

I'd say yes for you both. Because if one or both lost your jobs you'd want enough to cover that. But do it based on essential expenses I would say. So anything you could cut out if needed I wouldn't include myself. 

CreditCardJunkie

Yeah it's definitely next on the to-do list. We are planning to save £500 p/m after Christmas towards the house fund. It's obviously not essential that we have to move (our house is fine & we have totally renovated it, it's just a little small) so perhaps this could double as an EF?

Sarahwithlove

That could work. Only downside being that when you do eventually move and use it you will then not have an emergency fund. 

joedenise

CCJ how about saving £250 p/m to EF and £250 p/m for the house fund.  At least until you have a small EF of £1000 which would only take 4 months and then you can concentrate on the house fund.

CreditCardJunkie

Fair point Sarah 🤔 I've come from a background where there has never really been any savings, live for today and worry about paying for it tomorrow. 
Joedenise that is a good idea. I think we will do that!

Sarahwithlove

CreditCardJunkie said:

Fair point Sarah 🤔 I've come from a background where there has never really been any savings, live for today and worry about paying for it tomorrow. 
Joedenise that is a good idea. I think we will do that!

But then is that what's got you in the position your now paying off this debt. If you don't break the cycle at some point you're gonna just keep going round and round. Decision is yours ultimately but maybe you need to save 3 to 6 months emergency fund and then save for house move. 

CreditCardJunkie

Ugh just typed a whole post and lost it before I'd finished. Basically the debt came from overspending on silly stuff and not working from a budget. I definitely take on board the need for an EF, this is something DH and I will figure out between us.
Paid some extra off today taking us down to £785. We are thinking of splitting the last of it between the last 2 pays of the year. We could stretch to pay it off at the end of this month but don't want to be short for Christmas. We should both get paid before Christmas so *should* be able to pay it off before Christmas 🤞
I've been pondering about closing down some of my credit accounts but not sure what to do/what effect it will have. Our mortgage deal is up in Feb so don't know if any of that will affect it?
I have;
- 5k limit on a Barclaycard (will be paid off in the next 8wks. Had this credit card for quite a few years)
- 1k limit on very (0 balance, had this just over a year)
- 1k limit on NatWest credit card (0 balance, had this for over 10 years)

Sarahwithlove

I think with your mortgage review coming up so soon I'd be tempted to leave them with nothing on them. Are you going to use a mortgage broker or do it yourself? 

enthusiasticsaver

Wow you  have really got that debt down fast.  Well done.  If you think you will be tempted to spend on credit by leaving cards open then close them.  Keeping them all open will have little effect on any credit scoring and if you are staying with your existing lender they will not score you at all.  I would keep the Barclaycard as you have had that for a few years.  Very is expensive so I would close that so you are not tempted and the limits on that and the Nat West ones are low.  As you have had the Nat West one for 10 years I would keep that one too so you only have  Barclaycard and  Nat West. 

CreditCardJunkie

Thank you Sarah and enthusiastic...I've been very lucky a little business opportunity came my way and I got a rather decent payrise in my day job. So we've had much more cash than we're used to.
I've been speaking with a friend who works in the bank and because our mortgage is so low with a relatively short term we wouldn't save much (if anything) if we moved so we will probably save the hassle and keep it how it is.
I think I will close down the very account, I do find it rather tempting!