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meerkatpie

So, no update in October as things were very up and down. I think it is time to get up to speed. 

I have made some extra payments where possible, but to try and be sensible I have nestled some away for Christmas, I don't want to be left short when it comes to presents. 

Up to now, my balances are:
Tesco Loan - £5895.91
Barclaycard - £3625.49
Car Loan - £14838.45

On the in September my total debt was £26025.75, whereas now it is standing at £24359.85 which is a reduction of £1629.90. 

It may seem small but it is a change which I am happy about! Just prior to my extra payments, I have received a settlement figure for my Tesco loan, which is now at about £5300, I have £3000 in savings, so I am hoping in the next 3 months I should have enough to clear it!

I know I should get rid of what I can now, but having no savings, I have realised, scares me too much, so I am happy to wait just a couple of months to completely get rid of that loan, then the credit card. 

I am hoping in all that come June 2021, aside from my car, I will have cleared my unsecured debt!

Let's see how this goes!

meerkatpie

Although, on a side note. 

I have just noticed that for the first time... ever, my debt is now officially less than a years income for me. 

Exciting times!

Sarahwithlove

Do you have a LISA or help to buy isa? If not I'd suggest getting a Lisa and putting some of your deposit money in there. You won't be able to touch it then and you'll be able to save your allowance for the year and get the bonus each year which is a bit of a no brained really if you intend to buy your own place. I believe you can put 4K a tax year into it and then get 1k bonus on it. So I would look to put 4K in before March. I know it means you will be paying interest on your loan but the money you will get in bonus will be more than that. Then from April when start the new year balance out away the monthly amount and the rest towards your debt. That when when you are debt free you will actually have some kind of deposit in place plus you'd have benefitted from the gov bonus each year on the LISA. 

MidsHollie

Hi there, 
Have you considered selling your car? That is a hell of a lot of car loan, and if you downgraded in car for a while you could smash out your debts pretty quickly and then rack up your deposit quickly too. Then when you are in your beautiful home you can then save up for a car. 

I’m also a big advocate on 100% focused on one thing. It seems like you are directing most of your focus on the tesco loan, which is great, but I would also stop your savings for now. The more you can put towards the debt the quicker it will be gone and then you can totally focus on saving for your deposit

meerkatpie

Sarahwithlove said:

Do you have a LISA or help to buy isa? If not I'd suggest getting a Lisa and putting some of your deposit money in there. You won't be able to touch it then and you'll be able to save your allowance for the year and get the bonus each year which is a bit of a no brained really if you intend to buy your own place. I believe you can put 4K a tax year into it and then get 1k bonus on it. So I would look to put 4K in before March. I know it means you will be paying interest on your loan but the money you will get in bonus will be more than that. Then from April when start the new year balance out away the monthly amount and the rest towards your debt. That when when you are debt free you will actually have some kind of deposit in place plus you'd have benefitted from the gov bonus each year on the LISA. 

@Sarahwithlove

You know, this is something I have been toying with. 

I have a Help to Buy ISA at the moment, this is where the bulk of my savings are and I do top up with it wherever I can. 

I was supposed to have a meeting with my local building society to discuss a LISA just before this second lockdown, unfortunately, it got cancelled with all that is happening, so I never got to explore it fully. 

The catch I am facing is that at the moment, it is away, can't be withdrawn without a lengthy call to the bank to remove the withdrawal block on the account so unless I really need, my help to buy stays locked away, yet I have the freedom to get it in an emergency. 

On the other side, it wont be a beneficial for me as a LISA and when my debt is paid I am still limited to a relatively small amount I can put away each year. Plus there is a penalty if I needed the money in an emergency. 

If you have any thoughts or suggestions please let me know! I have been thinking about it for a while. 

I am also thinking of withdrawing my money and using it all to pay off as much debt as I can but I am finding it hard to lose that security

meerkatpie

MidsHollie said:

Hi there, 
Have you considered selling your car? That is a hell of a lot of car loan, and if you downgraded in car for a while you could smash out your debts pretty quickly and then rack up your deposit quickly too. Then when you are in your beautiful home you can then save up for a car. 

I’m also a big advocate on 100% focused on one thing. It seems like you are directing most of your focus on the tesco loan, which is great, but I would also stop your savings for now. The more you can put towards the debt the quicker it will be gone and then you can totally focus on saving for your deposit

@MidsHollie
I wish I could, but I made the mistake of going for a PCP, bad in hindsight, it would have been cheaper for me to get an old banger for a couple of hundred just to get around with but I wasn't that sensible  

On the plus of that it is 0%, so I don't have to worry about any interest stacking up

But I think it might be one that I just have to stick out until it is over 

Sarahwithlove

LISA sadly does have the downside of the penalty of if you withdraw it. But at the same time that may be good thing. How much do you need to pay off the barclaycard per month to clear it before the end of the 0% period. Do you have any kind of emergency fund that's seperate to your deposit money. What's the interest on the tesco loan? I think I would switch my H2B over to a LISA and max out the 4k amount for this tax year. Then save a 1k emergency fund to cover any big expenses. Once done this then keep overpaying the loan. But make sure you are gonna clear the barclaycard before end of 0% period. You are in a good position by living at home but you want to make sure that once the debt is clear you are in good position deposit wise and can max out the bonuses. 

MidsHollie

meerkatpie said:

MidsHollie said:

Hi there, 
Have you considered selling your car? That is a hell of a lot of car loan, and if you downgraded in car for a while you could smash out your debts pretty quickly and then rack up your deposit quickly too. Then when you are in your beautiful home you can then save up for a car. 

I’m also a big advocate on 100% focused on one thing. It seems like you are directing most of your focus on the tesco loan, which is great, but I would also stop your savings for now. The more you can put towards the debt the quicker it will be gone and then you can totally focus on saving for your deposit

@MidsHollie
I wish I could, but I made the mistake of going for a PCP, bad in hindsight, it would have been cheaper for me to get an old banger for a couple of hundred just to get around with but I wasn't that sensible  

On the plus of that it is 0%, so I don't have to worry about any interest stacking up

But I think it might be one that I just have to stick out until it is over 

Oh !!!!!!! Wel, on the plus side, that is a lesson you have learnt early on, and a mistake I’m sure you won’t make again!! 

Does that mean it has a balloon payment at the end to keep the car? Is the debt you stated with the balloon payment? I think that most PCP contracts have a break clause, where half way through you can voluntarily terminate the contract. You’d be without a car but you could then use your savings to get a cheap car until the debt is gone. Dave Ramsey, the intense, preachy American debt guy has a lot of callers talk about being “upside down” with cars (owing more than it is worth) and they always really struggle to give up the car, but logically, from a distance it makes sense as it saves them money in the long run. It’s just hard for the person themselves to see it as we spend our whole life conditioned that debt is ok. Anyway, long story short, it might be worth looking in to, so you fully know your options 

meerkatpie

Sarahwithlove said:

LISA sadly does have the downside of the penalty of if you withdraw it. But at the same time that may be good thing. How much do you need to pay off the barclaycard per month to clear it before the end of the 0% period. Do you have any kind of emergency fund that's seperate to your deposit money. What's the interest on the tesco loan? I think I would switch my H2B over to a LISA and max out the 4k amount for this tax year. Then save a 1k emergency fund to cover any big expenses. Once done this then keep overpaying the loan. But make sure you are gonna clear the barclaycard before end of 0% period. You are in a good position by living at home but you want to make sure that once the debt is clear you are in good position deposit wise and can max out the bonuses. 

@Sarahwithlove
That is a very good way to think of it! My ISA and emergency fund are both one and the same, maybe I need to think of them as separate? 

I am paying £150 on it at the moment, but that will leave about £1000 on it at the end of the 0% period, but I am happy to try to balance transfer at that stage if I need to, to keep the interest low. 

My tesco loan is at a (rather high) 7%  Luckily with my overpayments it is reducing my overall amount of interest paid. 

I'm quite glad that you mentioned the LISA to be honest, because I have been in two minds for such a time, it has pushed me to take another look!

Sarahwithlove

If you are deffo gonna buy a house then LISA is way forward and it's really important that you have a seperate emergency fund. Have you looked to see if you could get a money transfer card to pay down some of the loan as I imagine the fee would be a lot less than 7%
Have you got any way of making more money? Could you do overtime at work? 2nd job?