Fresh start

jayhall4837

Hi been looking at getting some money saved. Just wanted to know what methods you used that worked or helped and how you even worked it all out to start to get out of debt.  currently I have a
CC 0% with 600 on this is used for emergency only. 

My phone contract has 221.18 left 
and a 5000 loan which has 4218 left
and a overdraft  I am going to put a plan together in next few days any advice would be welcomed
thanks jay 

RAS

The issue isn't so much your debts as the relationship between those and your income.

With respect to the loan, do you know if you can over-pay without penalty?

What is the interest rate on the OD? Likely to be horrendous?

Do you have any sort of emergency fund except the 0% card

Start with https://www.lemonfool.co.uk/financecalculators/soa.php

If you want to post here, people can help you work out priorities, but there's no obligation

fatbelly

If the loan interest is reasonable then I'd concentrate on clearing the overdraft. Here are some ideas

https://www.moneysavingexpert.com/banking/cut-overdraft-costs/

EssexHebridean

Clear the overdraft as a priority - and create a proper budget so that your outgoings are all covered, you manage what you spend, start saving an emergency fund (a credit card as an EF is a last resort) and can also work on clearing your other debts. 

You may find putting together your SOA (statement of affairs) is helpful - link in my signature below. 

jayhall4837

Morning all, And Thanks for the reply’s I created a budget last night and been doing a bit of research. After all my bills are out my normal wage should leave me with 650 ish and that’s without overtime so shows I’ve just been daft and wasted it really. I’ve decided I am going to do the snow ball route and will be ringing o2. will pay the remainder of my phone off which is 218 and then get a sim only. so from next month the money that I was using for that will go towards my CC which I’ll put a chunk of my overtime money in. Which then leaves my loan and overdraft so I’ll be getting a pot set up and clearing the overdraft and then tackle my loan. After going through my statements last night am quite shocked at how much money I spend when going out for a drink On nights out.  I don’t go out all the time but I do try to  socialise once a month or every other month but get card happy I think majority of my spending on nights out is buying others and that’s going to stop. I have also been back into the gym a month today and trainning for half marathon which ties in with money to because food isn’t cheap so I’ll be making more sensible decisions on that front too. I am thinking of keeping this blog open and regular now as it will keep me accountable. So todays plan is get hold of o2 after the dentist.

[Deleted User]

If you are going to keep this thread open it may be worth having it moved to the debt diaries section.

jayhall4837

Thanks How do I do that 

Kat78MFW

I would check the interest rates on all your debt. The overdraft is likely to have a rate around 40% so you'd do better to focus on reducing that first and paying the minimum on the other debt. What size is the overdraft?

jayhall4837

Kat78MFW said:

I would check the interest rates on all your debt. The overdraft is likely to have a rate around 40% so you'd do better to focus on reducing that first and paying the minimum on the other debt. What size is the overdraft?

Hi kat, I have 3000 but depends on the month what’s going on so each month is different I think your right I think it’s 39% my phone 0% and CC is 0% until sept 23 and loans is 7.9% 

EssexHebridean

the other reason for getting shot of the overdraft is that it is what we sometimes describe here as a "dangerous debt" because it can be recalled by the bank at any time. 

The point of a proper, solid budget is of course that for the most part "every month is the same" so as you settle in to budgeting and learn to live within that it will naturally (assuming that it is correct!) remove the need for you to be in and out of overdraft. 

If there is no interest on the payments for the phone then really it's not logical to pay that one off first - although as it is a relatively small amount I can see the attraction of doing this. Remember also that your budget should include a line to save for a replacement phone when that is needed. You don't say how old the phone is I don't think, but assuming it's a year or so old then perhaps you might be thinking that another couple of years might see you needing a replacement - so work out approximately what you expect to want to spend on a phone at that stage, divide that by 24 and then make sure you set aside that amount each month. (For example - if you expect to buy a £600 phone when you replace, setting aside £25 per month from now will mean the money will be in the bank and waiting. You can use this same saving up method for anything that counts as a "big one off" too - so holidays should be budgeted for this way, a lot of people do the same with insurances as it is cheaper to buy them outright rather than paying monthly. 

I think keeping this thread as an ongoing diary is a great idea - as suggested you can request that the forum team shift it to the diaries section for you - easiest way of doing this may well be by the "report" function - use the "needs moving, merging or splitting" option and just note where you'd like it moved to. 

Just a further thought - if you set the monthly payment to the credit card at £100 now, and don't use it any more, that should mean that the balance is cleared by the time the 0% ends, I think? Could be an easy way of dealing with that, allowing that you have a decent surplus. 

jayhall4837

EssexHebridean said:

the other reason for getting shot of the overdraft is that it is what we sometimes describe here as a "dangerous debt" because it can be recalled by the bank at any time. 

The point of a proper, solid budget is of course that for the most part "every month is the same" so as you settle in to budgeting and learn to live within that it will naturally (assuming that it is correct!) remove the need for you to be in and out of overdraft. 

If there is no interest on the payments for the phone then really it's not logical to pay that one off first - although as it is a relatively small amount I can see the attraction of doing this. Remember also that your budget should include a line to save for a replacement phone when that is needed. You don't say how old the phone is I don't think, but assuming it's a year or so old then perhaps you might be thinking that another couple of years might see you needing a replacement - so work out approximately what you expect to want to spend on a phone at that stage, divide that by 24 and then make sure you set aside that amount each month. (For example - if you expect to buy a £600 phone when you replace, setting aside £25 per month from now will mean the money will be in the bank and waiting. You can use this same saving up method for anything that counts as a "big one off" too - so holidays should be budgeted for this way, a lot of people do the same with insurances as it is cheaper to buy them outright rather than paying monthly. 

I think keeping this thread as an ongoing diary is a great idea - as suggested you can request that the forum team shift it to the diaries section for you - easiest way of doing this may well be by the "report" function - use the "needs moving, merging or splitting" option and just note where you'd like it moved to. 

Just a further thought - if you set the monthly payment to the credit card at £100 now, and don't use it any more, that should mean that the balance is cleared by the time the 0% ends, I think? Could be an easy way of dealing with that, allowing that you have a decent surplus. 

Thank you for your help and advice. I’ll take that onboard and it’s another way of looking at it I never really thought of that. And like you say I just looked at the lower payment out of all the debts and thought once it’s gone its gone. But that makes sense now I’ll get on to the forum team and ask them to move it over. Thanks