Savings or Debt Repayment - Advice Please!

kimwp

Skintdognotmillionaire said:

kimwp said:

Welcome! I don't think you can really say debt is crippling you when you are spending £530 on fun, holiday and presents and still have £100+ left each month after paying out for everything to be honest, but it's great that you've put together your SOA so you can get tackling this debt.

NB, I think you might have left a debt off your SOA (novuna finance?)

I believe Martin's view (which I subscribe to) is to pay off debt that costs more than savings - you can borrow money if you need it before you have built up another pot. In your case, I'd adjust this thinking a little to say if your car is costing you, then first get a new (second hand) reliable car.

Then pay all the minimums, while setting the 0% APR debts to pay off before interest starts being charged (which I think you've done). 

Then split the remainder into three - a boiler replacement pot*, overpaying the personal loan** and paying your family loan**.
* Unless you will be able to get credit at the time or you have enough after buying the car

** Check for any overpayment penalties

*** I'd normally say prioritise overpaying the highest Apr, but your family are losing out to loan you this money, so it seems fair to give them equal priority.

If the upstairs works, even if it doesn't look nice, then it's not a priority.

You'll need to make sure you understand why you are in this debt to avoid getting back into debt (but you don't need to share it here)

Hi Kimwp,

It’s guess it feels crippling to
me because 100% of my wages on on bills and debt. Maybe my wife feels differently as it is her that has the spending money.

I didn’t mean for this to seem insulting to others who are in reality struggling a lot more than we are so I apologise if it has come across that way.

The Novuna is the hire purchase on the SOA.

Thanks for the advice, I just really, desperately want to be debt free and the thought of extra borrowing is sickening. 

Hi Skintdog, sorry, it was meant as more of a reality check/empowering statement than a reprimand - to say that you have it within your control for this not to be crippling you.

I think you need to explain the situation to your wife so that she understands that her spending (combined with your necessary spend) and likely upcoming outgoings are making you feel sick. 

I think there's always a risk that we'll have to take out credit in an emergency unless we have enough to cover every issue happening at once, it's just that having a pot reduces that risk. 

I suggest you set your initial new car spend limit to your pot amount minus the cost of a new boiler. If you have to spend more on the car, then focus the extra above the minimum debt payments into building up your boiler fund if it's making you feel sick not to have it. Once it will cover the cost, split the remainder between the personal and family loans.

And take a deep breath. You aren't in the position of spiraling, even if you do take out more credit as there's lots in your SOA to cut back on. It doesn't mean it's not a stressful situation though and it's great that you are telling us how you are feeling, just know that you can definitely sort this.

Skintdognotmillionaire

I will look into what I can get, although I’m not sure ~6.5k will be enough to get a car that’s likely to last with my mileage. But possibly it’s better than what I’ve got.

I will also talk to my wife and see if we can cut some of the ‘entertainment’ ~ to be honest that’s really just eating out and takeaways so could be fairly pain free… at least for me, but probably not for her! 

I would like to put a lot more away for future emergencies 

kimwp

Skintdognotmillionaire said:

I will look into what I can get, although I’m not sure ~6.5k will be enough to get a car that’s likely to last with my mileage. But possibly it’s better than what I’ve got.

I will also talk to my wife and see if we can cut some of the ‘entertainment’ ~ to be honest that’s really just eating out and takeaways so could be fairly pain free… at least for me, but probably not for her! 

I would like to put a lot more away for future emergencies 

Check out the motoring board on here if you're looking for recommendations. 

Will it be pain-free for you because she does all the cooking? If that's the case, perhaps you could take on some of the cooking, maybe a meal a week and do some batch cooking so there's quick meals in the freezer? It's the kind of thing that can be a chore or a fun family activity depending on how you approach it.

Don't try to cut back on all fun, because life with no fun is, well no fun! But cutting back a bit to ease the feeling of sickness (while recognising that this will take a little while to fix) is a good idea.

fatbelly

It's sensible to use specialist boards for advice.

The motoring board will comment on good value cars that will do 28k miles per year

The In My Home board may have a view on gas boilers.

Skintdognotmillionaire

kimwp said:

Skintdognotmillionaire said:

I will look into what I can get, although I’m not sure ~6.5k will be enough to get a car that’s likely to last with my mileage. But possibly it’s better than what I’ve got.

I will also talk to my wife and see if we can cut some of the ‘entertainment’ ~ to be honest that’s really just eating out and takeaways so could be fairly pain free… at least for me, but probably not for her! 

I would like to put a lot more away for future emergencies 

Check out the motoring board on here if you're looking for recommendations. 

Will it be pain-free for you because she does all the cooking? If that's the case, perhaps you could take on some of the cooking, maybe a meal a week and do some batch cooking so there's quick meals in the freezer? It's the kind of thing that can be a chore or a fun family activity depending on how you approach it.

Don't try to cut back on all fun, because life with no fun is, well no fun! But cutting back a bit to ease the feeling of sickness (while recognising that this will take a little while to fix) is a good idea.

Quite the opposite actually. I’m the only one who cooks but my wife is the one that loves take out.

I will check out the motoring board 

if we could just halve the entertainment spend that would give us another £200 a month for debt repayments or savings which is substantial 

boomboomboom

Hi @Skintdognotmillionaire lots of great advice and if I look at how I got out of debt I did something similar to the SOA but did it myself in excel.

I see some parallels compared to us so maybe some of this will help you realise you’re doing well and can do more.

I sold those items on secured debt.
And like you I worked hard at paying off all the other debts.

The additional thing is I trimmed every single last bill.

It took me three months but I ended up saving £500 each month just by phoning insurance providers, Sky, etc and reducing them all.

It looks like you are budgeting, which is something we now do and that continues to keep us in check. Sticking to those is not only what keeps our spend down but it keeps our heads straight. Like another poster said, you have to try and figure out why you get into debt. For me it was simply focusing on the wrong things. I was more concerned with owning stuff than I was saving or investing. Now when I go to bed at night I think of what I am saving for mine and my kids futures instead of why I needed yet another motorbike!!

The last thing that helped most was involving the entire family in spending less. I taught my kids what I had learned. They now have their own bank accounts and no longer put me under pressure to buy them stuff because they first look at their bank accounts and then appreciate that the £180 jumper just isn’t worth it. That has changed all of our lives. My kids even have pensions and ISAs. Try to have that as your new exciting future goals.

Saving, or not spending, can be exciting and doesn’t have to be a chore. And is definitely not depressing. I explained it to my youngest - a football nut - as treating the saving of a goal as a goal itself. We don’t need the gratification of buying something to feel good.

I am guessing you’ve got age in your side. So try not to be overcome by the debt total. Eat the elephant one chunk at a time. Work out what date you will be debt free.

Once you have that debt free date and with a bit of excel skills you can start to play with your budgets “if I can trim an extra £100 off our spends it brings our debt free date 10 months earlier”.

Essentially you’ve got to be obsessive over it.

To give you an idea, it took me 3 months to understand where our money was going and to create budgets and set up different joint accounts for food, fuel, etc to help with our budgets and to call around all the providers too. It was hard work. Then it took another three months to figure out where we were spending money, wrong foods, too much booze, inefficient shopping etc, wasting it on meals out. We cut all that out.

So, to end my babbling with the fact that you’ve started, and that takes guts. I know because I actually was too scared to look at our money. I was too scared to open letters. But it took a trigger - in fact someone telling me stuff very similar to what I am saying to you - before I took the plunge and got debt free. So to use a cliché, you’ve already taken that first difficult step. Just gotta keep making sure you not only make these changes but change your approach to money.

I hope some of that nonsense helps. Looking forward to hearing when your debt free date is and what else you can do to bring it closer.

Good luck 🙏 

kimwp

Skintdognotmillionaire said:

kimwp said:

Skintdognotmillionaire said:

I will look into what I can get, although I’m not sure ~6.5k will be enough to get a car that’s likely to last with my mileage. But possibly it’s better than what I’ve got.

I will also talk to my wife and see if we can cut some of the ‘entertainment’ ~ to be honest that’s really just eating out and takeaways so could be fairly pain free… at least for me, but probably not for her! 

I would like to put a lot more away for future emergencies 

Check out the motoring board on here if you're looking for recommendations. 

Will it be pain-free for you because she does all the cooking? If that's the case, perhaps you could take on some of the cooking, maybe a meal a week and do some batch cooking so there's quick meals in the freezer? It's the kind of thing that can be a chore or a fun family activity depending on how you approach it.

Don't try to cut back on all fun, because life with no fun is, well no fun! But cutting back a bit to ease the feeling of sickness (while recognising that this will take a little while to fix) is a good idea.

Quite the opposite actually. I’m the only one who cooks but my wife is the one that loves take out.

I will check out the motoring board 

if we could just halve the entertainment spend that would give us another £200 a month for debt repayments or savings which is substantial 

Ah! Well I've run out of ideas on reducing take-out then, it'll just have to be a money discussion I think.

That would be a really good aim. I hope you are feeling a bit better about things.

tlc678910

Hi OP,
I just wanted to give you a thought on the upstairs of your house.

You can't afford the renovation but perhaps there are very cheap things you could do to spruce it up.

We have old/wonky walls, old doors and had a leak that ruined the bathroom floor.  A new bathroom (including partition wall) and doors would be desirable. But we can't afford it either.

I just laid a nice new lino myself (£65) which will be fine when I add the sealant.  I have always hated the black bath panels and I plan to lightly sand, prime and paint them.  Our bathroom door is manky and I will gloss it.

Perhaps you can have a spruce up for £100 or so.  Just don't let things escalate with posh paint etc.

The channel 4 programme "How to save a grand in 24 hours" inspired me to get cracking. You can find it on catchup.

Your grocery budget looks very optimistic and might be where more money is going.

sunshine_raincloud

Just wanted to say I completely agree that you need to get your wife on board with this! Does she know the extent of the debt that you are in as a family? If you work together it will be so much easier and you won't feel like you are shouldering all of the stress. If you reduce your spending you will be able to start throwing more money at the debts and this will ease the mental burden of it all! Also as others have suggested having a look through your house and selling any unwanted items or clothes can be a great way to make some extra cash. It may not feel like a lot, but the odd £10-20 here and there really does start to add up. With regards to what to do with your savings, you need to do what you feel comfortable with. I would agree with keeping enough back to cover a new boiler and maybe a new car and then sending the rest to the debts. Clearing the cards with the smallest debts would be an easy win and might give you a boost but I personally might put it towards those with the highest interest. You can definitely do this and well done for posting and getting started with debt busting! 

Skintdognotmillionaire

tlc678910 said:

Hi OP,
I just wanted to give you a thought on the upstairs of your house.

You can't afford the renovation but perhaps there are very cheap things you could do to spruce it up.

We have old/wonky walls, old doors and had a leak that ruined the bathroom floor.  A new bathroom (including partition wall) and doors would be desirable. But we can't afford it either.

I just laid a nice new lino myself (£65) which will be fine when I add the sealant.  I have always hated the black bath panels and I plan to lightly sand, prime and paint them.  Our bathroom door is manky and I will gloss it.

Perhaps you can have a spruce up for £100 or so.  Just don't let things escalate with posh paint etc.

The channel 4 programme "How to save a grand in 24 hours" inspired me to get cracking. You can find it on catchup.

Your grocery budget looks very optimistic and might be where more money is going.

 

Excellent idea thanks - I’m not much good at DIY (I think we could wallpaper instead of replaster but I attempted it once and it nearly cost me my marriage!)

It could certainly give us 5 or more years in its current state if we could just tidy it up a bit rather than the £2,000 quoted to skim.

unfortunately we had our manky doors dipped and stripped and it’s caused them all to warp so now none of them close, have handles or latches! It’s a nightmare with kids and a cat!

with groceries, that’s one of the only bills I’m confident with as we shop once a week and never spend more than £250 a month HOWEVER I do think it’s maybe a false economy that we don’t enjoy the food we buy and that leads to more takeaways and convenience food.