Three years to get debt free

Willowtree222

My options to plan.

Use my savings to clear everything and start myself fresh and hope I don't emotionally spend. 

Or

Use my next few pays to sort it out and leave my savings. 

I would still have an emergency fund if I used my savings though. Not as much as I wanted but certainly there. 

Any thoughts? 
I've paid off most Christmas presents for this year already. 

I want to get sorted but I've got myself into this by letting my emotions get control. 

Sun_Addict

Tough one 🤔 If you sorted it out over the next few paydays would that cost you in interest? If so I would clear with savings given it would still leave you with an emergency fund. 

I remember the hassle you had with your ex 🤬 You’ve come a long way since then. 

Be kind to yourself, you’ve had a lot to deal with x

Willowtree222

Yes. It would cost me interest, which is why I'm thinking pay it off,but then my savings would be lower than I want. 

Mentally if I don't pay it off,I think I'd be tempted to just say F it, I'm already in debt so what's another purchase.

That's what ove done before anyway and I'm not sure with all the difficulties, I'd avoid that. 
Hmmm. Long think today. 

MFWannabe

If you pay it off how long would it be until savings were up to an ‘acceptable’ level? 

Would it be the two pay days? The same as it would be to pay off the debt? 

How much would you save in interest paying it off now? 

Willowtree222

I think it would be June time realistically because of the mini break we had. 

I would probably pay around £50 interest. 

It would mean I couldn't over pay the other debts for two months if I didn't overpay. 

in_need_of_direction

Delurking to say, pay it and get shot. I found the reduction in number of debts so liberating and so encouraging. Plus it’s an additional £50 to the emergency fund

Willowtree222

in_need_of_direction said:

Delurking to say, pay it and get shot. I found the reduction in number of debts so liberating and so encouraging. Plus it’s an additional £50 to the emergency fund

Thank you. 
I'm going to have a look at it later.
X

daisy_1571

I suppose there's two things here - mathematically the cost of paying debt versus the gain of interest on savings.  Thats very easy.  Work it out and see what the figure is.  Positive, keep the saving, negative, pay off the debt.

But there's the ethos/comfort/psychological aspect, whatever we want to call it.  As an example: intellectually, people should pay off highest interest first - snowball method, but psychologically completely paying off a smaller debt is often preferable even tho its not the highest interest or is even 0%.  This is much harder to evaluate.  If you can, allocate some sort of figure to the thoughts, a pros and cons list, weight the arguments in some way.  Otherwise its very hard to decide. 

I would perhaps also mention this emotional spending you talk about quite a lot.  Its great you've identified you do that.  But can you do anything about curbing this?  Is there a way that would work for you?  A notebook to jot down potential impulse spends and revisit at the end of each month?  A debit card to an account with no overdraft set up purely for emotional spends and stocked each month with whatever amount you allocate - a fiver, 20 a hundred whatever you think - each month so if there's no money there until next month, that takes the decision out your 'emotional hands'  and puts control back into your' frugal hands'.  Take a photo of the thing and see if you still want it in 20 minutes go back. 

Just suggestions,  daisy xxx 

Willowtree222

daisy_1571 said:

I suppose there's two things here - mathematically the cost of paying debt versus the gain of interest on savings.  Thats very easy.  Work it out and see what the figure is.  Positive, keep the saving, negative, pay off the debt.

But there's the ethos/comfort/psychological aspect, whatever we want to call it.  As an example: intellectually, people should pay off highest interest first - snowball method, but psychologically completely paying off a smaller debt is often preferable even tho its not the highest interest or is even 0%.  This is much harder to evaluate.  If you can, allocate some sort of figure to the thoughts, a pros and cons list, weight the arguments in some way.  Otherwise its very hard to decide. 

I would perhaps also mention this emotional spending you talk about quite a lot.  Its great you've identified you do that.  But can you do anything about curbing this?  Is there a way that would work for you?  A notebook to jot down potential impulse spends and revisit at the end of each month?  A debit card to an account with no overdraft set up purely for emotional spends and stocked each month with whatever amount you allocate - a fiver, 20 a hundred whatever you think - each month so if there's no money there until next month, that takes the decision out your 'emotional hands'  and puts control back into your' frugal hands'.  Take a photo of the thing and see if you still want it in 20 minutes go back. 

Just suggestions,  daisy xxx 

Thank you. All very good and practical advice. Unfortunately, I can't trick my brain to that just one account, I top it up, go over etc.

I have wrote things down before and that did work when I could see the numbers adding up. I will return to this. 

The credit card has the most interest as well as my overdraft. 

daisy_1571

again, thats great that you've identified that aspect.  There will be a way that works for you and that you can stick at if you keep looking. Otherwise all the planning in the world is for naught as we can all self sabotage very much easier than keeping on the path that would bring us to our goals.

If the writing down seems to do the trick for now, then that's great, get back doing that.  As that becomes ingrained habit there will be other little tweaks that you will begin incorporating. 

Success breeds success so definitely keep at it    

Dxxx