Busting this debt before 40

Cara_

Hello Chocolatefund

I've just read through your diary and you are doing really well. I really like the Game of Loans chart which I would find very motivating.

Sorry about your car and your plan to pay for the work seems very sensible.

The end of the Te$co loan is in sight, even if it takes a little longer to clear.

Cara

Chocolatefund

Hi @Cara_ Thank you for the kind words of encouragement.  Sometimes it helps to take a step back and see the bigger picture.  Have to keep reminding myself that if I can do this without touching my emergency fund or adding more to the debt, then that’s a win.

Chocolatefund

So I’ve got a plan.  Here’s my breakdown;

Currently got £1002 in the sinking fund.  Now, my car insurance plus home insurance came to £1030 last year at the height of the car insurance premiums skyrocketing up.  My car tax last year was £190 which will probably go up.  Once my renewal quotes come in I’m going to aim to get this down and keep the three costs within the 1k mark.

Once my pay comes in for end of April, I’ll be able to transfer £1160 to the car fund.

Decided I will make a small token overpayment to the loan of £169.  I’ve got the headroom to do it and it will keep the psychological motivation going.  Why £169?  It will bring the loan down to £3400 and I can colour two more shields in on my chart.  Yes, really. 

I managed to pickup confirmed extra hours in early May.  This will bring about £220 into the car fund.

End of May payslip, provided I stick to budget, will let me put another £1040 in.

That’s a total of £2420.  More than enough for the engine and other car works in early June.

There’s a few buffers in various places should I need more;

I tend to keep about £100 in my main bills account as a buffer, so I’ve got this if I need it.
Theres currently £86 in the Ch@se round up pot I could also use.
I’ve started the process of another bank switch to F1rst Direct for thier switch bonus.  The switch won’t complete till mid May, and I might not get the £175 till June, so not counting this in my car pot, but could potentially use it for Junes loan overpayment when it comes.
Going to try and pick up more extra hours in late May.

Soooo, there we go.  Worst case scenario I can pull a small amount from my emergency fund.

Fingers crossed.

Chocolatefund

Payday has come and gone.  All hail the great monthly money shuffle.

Month of April spending went as follows;

18 No Spend Days

Food £162.  Yay!
Petrol £72.  Yay!
Eating Out/Fun.  £114.  Oops…
Misc £99.  Meh.  

Total: £447.  Just within budget.  With the majority of the miscellaneous spend made up of the £67 birthday present, this is not too bad.  I definitely caved into eating lunch out temptations on a couple of those weekends.  Transferred £447 over to the spending account to bring it back up to £450 for Mays reset.

£168 has been sent to overpay the loan.  Add the direct debit and that takes it down to £3,400.  I’m glad I decided to pay something extra towards it to keep the motivation going.  Now 83% of the way there…83 frickin’ percent.  *grumblegrumblelousycargrumblegrumble*

Been catching up on other diaries on here and car costs seem to always happen to us at the worst times.  I mean…why couldn’t these things happen to us when we are at least debt free?  So rude.

In other money news, my switch to F1rst Direct is progressing through.  Should finish in about 10 ish days.  I’ll need to send £1000 over to account in the meantime to get the switch bonus.  Will probably do that after the bank holiday.  Also opened the account through topc@shback which will net me another £35.  Winner.

In a slightly bold move, I’ve been accepted for two credit cards also through topc@shback.  Not to use them, rather to grab the cashbacks on them.  £25 from a Te$co one and £35 from M&S.  That along with the F1rst Direct will give me a combined £95 coming my way eventually.

Looking ahead to May, the only social event I’ve got planned a is a co-workers leaving due.  Other then that, going to try and keep up the no spend days.

Chocolatefund

Been a couple of weeks since my last post.

Just over halfway through the month and things are looking good so far.  Just done a food shop today which should last me through next week.  Have £198 left in the spending account to last me till payday.  If I can roll about £100 of that over into next month that would be helpful.

Car insurance renewal came to £716 and the home insurance £226 which isn’t too bad considering I’m dealing with inner city postcode tax.  The car tax came out at £195.

My car fund has currently £1210 so far.  I’ve managed to bag an extra long shift tomorrow due to sickness so that’s gonna get me another couple of hundred quid.  Providing I stay on budget I should be able to put away another grand on payday.

Ugh….what I could do with that money if I wasn’t debt busting or car maintenance-ing.  -.-

Ch@se is stopping the cashback for me from next month.  Unless I put in £1500 per month to keep it going.  Might have a look around at a different spending account.  I’m definitely liking a separate bank account just for spending.

Speaking of which.  I’m waiting on the F1rst Driect account to spit out the switch bonus, but I’ve been enjoying using it quite a bit.  It kinda feels refreshing to have a different main bank and try something new, especially now that Naffwest have nerfed thier Digital Regular Saver.  Noooooo…..!

Cherryfudge

It sounds like you're doing well with the finances. Keep up the good work! Can you cycle the money through Ch*se? By which I mean put it in and take it out again till the £1,500 has been through, even if it's the same money going more than once?

1stTimer

Yes I used to do what cherryfudge suggested, maybe you can move your car fund in and then straight back out again? I never left the money in for even 24hours

Chocolatefund

That’s actually a good shout!  Thanks @Cherryfudge and @1stTimer.  I’ll move my car fund and spending money over there on the 1st June.  After that, I can move my loan overpayment monies to it, and just overpay the loan from my Ch@se account instead.

Speaking of loan, I got a teeny weeny interest rebate.  A whopping £9.  Awww.

Brings the loan down to £3,391.  

Sarahwithlove

Just gonna brain dump here. What's the interest rate on your loan? Would it be worth paying your car costs on credit card 1 and then balance transferring to card 2. Then use the car funds to pay off loan and save the interest? You'd need to do the numbers to see how much interest you'd save on the loan but there's a good chance the cost of the balance transfer will be less than interest you'd save on loan. 

Chocolatefund

Sarahwithlove said:

Just gonna brain dump here. What's the interest rate on your loan? Would it be worth paying your car costs on credit card 1 and then balance transferring to card 2. Then use the car funds to pay off loan and save the interest? You'd need to do the numbers to see how much interest you'd save on the loan but there's a good chance the cost of the balance transfer will be less than interest you'd save on loan. 

The interest rate is 5.2%

Hmm…I’d have to request a settlement figure for the loan to find out.  3 months worth of interest added for settling early.

I could put the car cost on the 0% for x months card. (No need to balance transfer)  And pay a chunk off expect 1-2 direct debits left to avoid the early settlement fee.   But then, is that any different than just overpaying the loan over the next few months anyway?  I’d just be shifting the car debt elsewhere.

I did toy with the idea a couple of months ago getting a 0% money transfer card.  But the fees are so high at 4% plus the early settlement fee, decided it wasn’t worth it.

Edit:  My bad.  Just checked the Loan T&Cs.  It 1-2 months worth of interest for settling early.