The Last Leg; 6 years later, debt free in 2021

Baileys_Babe

Are you paying any interest on your debt? If you are would it not make more sense to reduce your debts with any money you have left from bonus after you have topped up your LISA?

Congratulations on your bonus, I have never worked anywhere which did a bonus scheme, with the exception of a tin of biscuits at Christmas not exactly the same league.

enthusiasticsaver

Congrats on the bonus and good idea to fill the Lisas.  That virgin CC is going down too.  I would recommend getting rid of the cards before applying for any mortgage.  Credit card balances affect the amount you can borrow. 

greensalad

Baileys_Babe said:

Are you paying any interest on your debt? If you are would it not make more sense to reduce your debts with any money you have left from bonus after you have topped up your LISA?

Congratulations on your bonus, I have never worked anywhere which did a bonus scheme, with the exception of a tin of biscuits at Christmas not exactly the same league.

Nope! All our debt is interest free. My credit card is due to be paid off next February which is the end of its 0% period. My boyfriend's CC 0% period ends in February 2022, we're still weighing up whether we'll pay it off before buying a house or put the money into savings. It'll make us more attractive to mortgage lenders but it'll also mean saving a bit longer. We're going to keep paying it off as though it'll conclude when the 0% period ends (aka maybe after we've bought) but we plan to get a mortgage advisor and ask them this very question at some point next year. 

The reason it made more sense to push money into our LISA is that it nets us an extra £2k per year if we can fill it, which is obviously more than the credit cards are costing us (£2,000 is a lot more than £0!) 

The only bonus I've ever got before too was a Christmas hamper! It was very nice, but it is lovely to actually receive a bonus based on how well the company is doing.

greensalad

enthusiasticsaver said:

Congrats on the bonus and good idea to fill the Lisas.  That virgin CC is going down too.  I would recommend getting rid of the cards before applying for any mortgage.  Credit card balances affect the amount you can borrow. 

Yeah see above. My credit card will be paid off next January, so long before we buy, and we're still deciding whether or not to pay my OH's or just keep paying it off per month until the end of the period (what we're currently doing). We plan to speak to a mortgage advisor and ask. Also, I have seen on a few application processes that they say "don't include credit cards that will be paid off within 6 months" so I guess we'd see what the mortgage broker recommends and if we're going for a mortgage with a bank with that policy maybe it won't matter. If it does matter we'll pay it off and forego a month of savings somewhere next year. 

Sarahwithlove

My mortgage broker told me to clear my credit card as it impacted the amount I was able to borrow. So you may find it's the same for you guys 

Kakiste

Well done on the bonus. 
I've not been on here very much either - bit snowed under in work atm.

greensalad

It's one of those things that will likely be right at the same time as we're looking, anyway. We're currently set to have our deposit on our late December paycheques, so we'd start looking in January and have the credit card paid off in February. Of course, we don't yet know what the deal is with my OH's bonus (he thinks they pay them in March but he only started the job in April) so if he gets one it'll bring everything forward including paying off his CC. We're just going to keep paying off a big chunk per month (about £300) and see what we want to do next Autumn. I think it might not affect us in terms of how much we can borrow because we're already capped at £450,000 total house price by the LISA but it looks like most affordability calculators for what they'd offer us would be much more than that, to the point that even with £300 extra in bills per month we'd still be able to borrow more than we need. Hence waiting and seeing what a broker thinks when we start looking next year.

greensalad

It's finally payday! I was so excited just sat waiting for it to come in... especially as it was a big fat bonus paycheque! I also got lots of overtime from when I did some peak shifts, and also because my regular overtime weeks both fell into this pay packet (I usually only do one per month, but they both happened to be inside the same pay cycle). My paycheque pre-tax was over £10k which is insane, I've never seen cash quite like that before! Of course, I ended up with a lot less! Especially as student loan took over £800! But at least that's going to pay off my SL balance not just disappearing.

LISAs are filled!! I'm so happy! This was my first house saving target set back in April and it's done. We've put the maximum amount in, and with the HMRC bonuses plus a small amount of interest we now have £10,010.99 in the house fund! 23.6% there! Not quite 25%. I can't believe how far we've come in just this year alone.

We paid £302.50 off my partners CC, and I've set aside a chunk to pay off when my credit card statement comes around on the 8th. Mine is getting very close to being paid off now!

I also paid off £20.67 from my smart watch purchase through my company scheme, and I've only got 2 payments left on that and then I'll have no BNPL to worry about. 

I also had a surplus of £848 after filling the LISAs which I've put into Premium Bonds. With interest rates so low, I thought I would rather have a chance at a million than a pitiful return from savings account interest. This is the first on the way to saving for the final tax and student loan bill for my partner, which is £5,923. We need it by January so I think a few savings are going to have to give elsewhere.

I also did all my regular savings. £116 in the Christmas pot, £180 in the car pot (which is mainly to pay for the insurance in full next spring), set aside for all our annual subscriptions, my boyfriend's Playstation 5 birthday/christmas gift which will be paid off early in December, set aside money for our holiday next year and budgeted our groceries and takeaway(s) for the month. We're having a big blowout indian takeaway tomorrow to celebrate our 9 year anniversary. I cannot believe we've been together 9 years! 

Time to update the signature!

Smart watch
Was £61.97 left of £249.99
Now £41.30 left of £249.99 // 83.5% paid

Santander CC
Was £4,840 of £5,555
Now £4,537.50 of £5,555 // 18.3% paid

Buy a house in 2021    £10,010.99 of £42,500 / 23.6%

lantanna

All sounds great, enjoy your Indian.

Sarahwithlove

You're doing great well done. Will you have a chance to do more overtime again as it seems that would really help with cutting the cards!