Which to pay against first

amat6219 · 6 July 2023 at 7:37PM

Unsure where to post - lingerer but not totally au fait with posting.

At the point of near breakdown with the extent of debt (15k) only fully brought to light through remortgage / monthly increases.

Question is, what to pay first? Lots of 0% CC (£200 - £4K), but one has ended so interest is through roof and declined for balance transfer (8k).

Do we pay smaller balances first to clear? Or pay every spare penny to the high interest card?

Any advice much appreciated as I can’t possibly cry anymore

Rob5342 · 6 July 2023 at 7:53PM

It would be useful if you could post a statement of affairs so people can see your whole situation and advise on the best long term plan.

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

Don't cry, a lot of us have been in similar situations and have found ways to get on top of it. I ran up £42k on credit cards and couldn't see any way out, but I've now got it down to £3k.

RAS · 6 July 2023 at 9:59PM

In the short-term, find everything you can to pay more than the minimum you can on the CC that is no longer 0%. If you've got "stuff" you no longer use, clothes you no longer wear, look at on line sales or car boots. Depending on the new interest rate, split the income to boost the next three months payments, or pay off immediately.

And do the suggested SOA for better advice.

enthusiasticsaver · 6 July 2023 at 9:59PM

If you can afford at least minimums then I would focus on the highest interest card. If you cannot afford minimums prioritise your mortgage and you may need to consider a DMP. I would post an soa so we can advise further. There is a link in my signature.

kimwp · 6 July 2023 at 10:44PM

Definitely in the right place and well done for posting, that can be the hardest part. You'll get through this, you just need a plan. If you post your SOA, we can help you come up with a good one. You need to be realistic with what you spend and it will also help if you put when your 0% offers are expiring and what Apr they will be going to.

amat6219 · 7 July 2023 at 8:56AM

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]

Number of adults in household........... 2

Number of children in household......... 2

Number of cars owned.................... 1[b]

Monthly Income Details[/b]

Monthly income after tax................ 1759

Partners monthly income after tax....... 2200

Benefits................................ 172

Other income............................ 0[b]

Total monthly income.................... 4131[/b][b]

Monthly Expense Details[/b]

Mortgage................................ 975

Secured/HP loan repayments.............. 0

Rent.................................... 0

Management charge (leasehold property).. 0

Council tax............................. 146

Electricity............................. 100

Gas..................................... 100

Oil..................................... 0

Water rates............................. 40

Telephone (land line)................... 0

Mobile phone............................ 25

TV Licence.............................. 13.25

Satellite/Cable TV...................... 16

Internet Services....................... 39

Groceries etc. ......................... 500

Clothing................................ 50

Petrol/diesel........................... 40

Road tax................................ 11

Car Insurance........................... 0

Car maintenance (including MOT)......... 14.99

Car parking............................. 0

Other travel............................ 50

Childcare/nursery....................... 475

Other child related expenses............ 80

Medical (prescriptions, dentist etc).... 50

Pet insurance/vet bills................. 0

Buildings insurance..................... 20

Contents insurance...................... 15

Life assurance ......................... 52

Other insurance......................... 0

Presents (birthday, christmas etc)...... 50

Haircuts................................ 10

Entertainment........................... 100

Holiday................................. 0

Emergency fund.......................... 0[b]

Total monthly expenses.................. 2972.24[/b]

[b]

Assets[/b]

Cash.................................... 0

House value (Gross)..................... 325000

Shares and bonds........................ 0

Car(s).................................. 7000

Other assets............................ 0[b]

Total Assets............................ 332000[/b]

[b]

Secured & HP Debts[/b]

Description....................Debt......Monthly...APR

Mortgage...................... 165000...(975)......5.84[b]

Total secured & HP debts...... 165000....-.........- [/b]

[b]Unsecured Debts[/b]

Description....................Debt......Monthly...APR

Credit Card....................195.......6.........0

Loan...........................2699......192.5.....0

Credit Card....................8000......183.......22

Overdraft......................250.......0.........0

Overdraft......................500.......0.........0

Credit Card....................4777......122.......0[b]

Total unsecured debts..........16421.....503.5.....- [/b]

[b]

Monthly Budget Summary[/b]

Total monthly income.................... 4,131

Expenses (including HP & secured debts). 2,972.24

Available for debt repayments........... 1,158.76

Monthly UNsecured debt repayments....... 503.5[b]

Amount left after debt repayments....... 655.26[/b]

[b]Personal Balance Sheet Summary[/b]

Total assets (things you own)........... 332,000

Total HP & Secured debt................. -165,000

Total Unsecured debt.................... -16,421[b]

Net Assets.............................. 150,579[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.

Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

amat6219 · 7 July 2023 at 8:58AM

It’s so hard to not bury my head, but here it is

Don’t know if I should’ve posted somewhere else?

Any help massively appreciated.

Floss · 7 July 2023 at 9:11AM

amat6219 said:

It’s so hard to not bury my head, but here it is

Don’t know if I should’ve posted somewhere else?

Any help massively appreciated.

No, here's the best place - this is one of the hardest bits, well done.

kimwp · 7 July 2023 at 9:35AM

amat6219 said:

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1[b]

Monthly Income Details[/b]
Monthly income after tax................ 1759
Partners monthly income after tax....... 2200
Benefits................................ 172
Other income............................ 0[b]
Total monthly income.................... 4131[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 975
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 146
Electricity............................. 100
Gas..................................... 100
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 13.25
Satellite/Cable TV...................... 16
Internet Services....................... 39
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 40
Road tax................................ 11
Car Insurance........................... 0
Car maintenance (including MOT)......... 14.99
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 475
Other child related expenses............ 80
Medical (prescriptions, dentist etc).... 50
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 15
Life assurance ......................... 52
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 2972.24[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 325000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0[b]
Total Assets............................ 332000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 165000...(975)......5.84[b]
Total secured & HP debts...... 165000....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Credit Card....................195.......6.........0
Loan...........................2699......192.5.....0
Credit Card....................8000......183.......22
Overdraft......................250.......0.........0
Overdraft......................500.......0.........0
Credit Card....................4777......122.......0[b]
Total unsecured debts..........16421.....503.5.....- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,131
Expenses (including HP & secured debts). 2,972.24
Available for debt repayments........... 1,158.76
Monthly UNsecured debt repayments....... 503.5[b]
Amount left after debt repayments....... 655.26[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 332,000
Total HP & Secured debt................. -165,000
Total Unsecured debt.................... -16,421[b]
Net Assets.............................. 150,579[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Ok, so if your SOA is accurate, you've got a healthy £650 to throw at your debt on top of the minimum payments. While it makes the most sense financially to focus on the debt with the highest interest, I think I might be tempted to pay off your overdrafts and small credit card debt first and close them down as you'll half the number of debts quickly by doing this. What credit card is the smallest credit card debt, others may be able to advise that keeping it open may lead to a 0% offer.

Having said the above, do you know how you got into debt? The reason I ask is that your SOA shows a healthy surplus - if the debt is from general living, then the SOA isn't accurate because you are spending more than you think.

amat6219 · 7 July 2023 at 10:02AM

kimwp said:

amat6219 said:

[font=courier new][b]Statement of Affairs and Personal Balance Sheet[/b][b]

Household Information[/b]
Number of adults in household........... 2
Number of children in household......... 2
Number of cars owned.................... 1[b]

Monthly Income Details[/b]
Monthly income after tax................ 1759
Partners monthly income after tax....... 2200
Benefits................................ 172
Other income............................ 0[b]
Total monthly income.................... 4131[/b][b]

Monthly Expense Details[/b]
Mortgage................................ 975
Secured/HP loan repayments.............. 0
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 146
Electricity............................. 100
Gas..................................... 100
Oil..................................... 0
Water rates............................. 40
Telephone (land line)................... 0
Mobile phone............................ 25
TV Licence.............................. 13.25
Satellite/Cable TV...................... 16
Internet Services....................... 39
Groceries etc. ......................... 500
Clothing................................ 50
Petrol/diesel........................... 40
Road tax................................ 11
Car Insurance........................... 0
Car maintenance (including MOT)......... 14.99
Car parking............................. 0
Other travel............................ 50
Childcare/nursery....................... 475
Other child related expenses............ 80
Medical (prescriptions, dentist etc).... 50
Pet insurance/vet bills................. 0
Buildings insurance..................... 20
Contents insurance...................... 15
Life assurance ......................... 52
Other insurance......................... 0
Presents (birthday, christmas etc)...... 50
Haircuts................................ 10
Entertainment........................... 100
Holiday................................. 0
Emergency fund.......................... 0[b]
Total monthly expenses.................. 2972.24[/b]
[b]

Assets[/b]
Cash.................................... 0
House value (Gross)..................... 325000
Shares and bonds........................ 0
Car(s).................................. 7000
Other assets............................ 0[b]
Total Assets............................ 332000[/b]
[b]

Secured & HP Debts[/b]
Description....................Debt......Monthly...APR
Mortgage...................... 165000...(975)......5.84[b]
Total secured & HP debts...... 165000....-.........- [/b]

[b]Unsecured Debts[/b]
Description....................Debt......Monthly...APR
Credit Card....................195.......6.........0
Loan...........................2699......192.5.....0
Credit Card....................8000......183.......22
Overdraft......................250.......0.........0
Overdraft......................500.......0.........0
Credit Card....................4777......122.......0[b]
Total unsecured debts..........16421.....503.5.....- [/b]

[b]
Monthly Budget Summary[/b]
Total monthly income.................... 4,131
Expenses (including HP & secured debts). 2,972.24
Available for debt repayments........... 1,158.76
Monthly UNsecured debt repayments....... 503.5[b]
Amount left after debt repayments....... 655.26[/b]

[b]Personal Balance Sheet Summary[/b]
Total assets (things you own)........... 332,000
Total HP & Secured debt................. -165,000
Total Unsecured debt.................... -16,421[b]
Net Assets.............................. 150,579[/b]

[i]Created using the SOA calculator at www.LemonFool.co.uk.
Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]

Ok, so if your SOA is accurate, you've got a healthy £650 to throw at your debt on top of the minimum payments. While it makes the most sense financially to focus on the debt with the highest interest, I think I might be tempted to pay off your overdrafts and small credit card debt first and close them down as you'll half the number of debts quickly by doing this. What credit card is the smallest credit card debt, others may be able to advise that keeping it open may lead to a 0% offer.

Having said the above, do you know how you got into debt? The reason I ask is that your SOA shows a healthy surplus - if the debt is from general living, then the SOA isn't accurate because you are spending more than you think.

So, pay off overdrafts and smaller card ASAP then keep the £4000 0% card going and chuck whatever we can at the higher interest rate card?

I don’t know to be totally honest - I think it’s been SMP x 2 children over the last 5 years (no pay at all for 2 months last year) then a steady build without realising - holidays we couldn’t actually afford if we had stopped and thought, but didn’t and it has spiralled. We have had a very much ‘life is too short’ mentality and now it’s come back to bite us massively.

We have only really realised now as remortgage is due so we’ve taken stock. Dread to think where we’d be in two years if we hadn’t been forced to reassess.

The magnitude of it now has me in such a panic. Can’t sleep or eat.

TheMilkmansDad · 7 July 2023 at 10:09AM

I think you need to carefully go over your SOA again, checking through your last few months statements to make sure the figures are accurate. For instance - you have a car but no insurance - if that is correct then that's a worry.

Depending on the age of the kids - £500 pm on groceries may be able to be reduced? As you have no savings I'd maybe look to build up a small pot for emergencies.

Which to pay against first

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