What debt to pay first? - Currently stuck with my decision

MrBowler
MrBowler Posts: 22 Forumite
Third Anniversary 10 Posts
in Debt-free wannabe
Hi All,

I currently have an issue where my debt is now under control in terms of payments and lowering steadily. The only thing is i dont know which is going to be the best way to clear it, we are not stuck in the house all day and have an active lifestyle due to 2 children and i do want to have a bit of free cash available for days with the kids.

I know there are free things but myself and my mrs work hard all year round so we do deserve a treat now and again (usually a week at a caravan).

Here are my debts
Debt Outstanding Monthly Payment Monthly Interest
Mortgage 2 £47,470.00 £565.38 £0.00
Dad £10,000.00 £0.00 £0.00
Car £4,369.00 £229.97 £0.00
Credit Card 2 £4,221.73 £150.00 £86.00
Santander £3,508.75 £130.54 £0.00
HSBC £2,391.42 £50.00 £32.00
Credit Card 1 £1,973.02 £150.00 £82.00
Nationwide £1,023.59 £50.00 £28.00
Simple Be £1,000.00 £50.00 £0.00
Halifax £915.96 £50.00 £30.00
Drafty £775.13 £96.10 £0.00
Car £560.00 £20.00 £0.00
Car 2 £224.00 £11.80 £0.00
Studio £150.00 £50.00 £0.00

What would you suggest paying off first.
I have loaned some money from my Dad which i do need to pay back, not so much quickly but i want to pay it back ideally this year.

I currently work 2 jobs bringing in between £4-4500 a month.
Our food shop is around £300 per month
After all direct debits paid and charges we have around £1,500 per month left over to attack the bills.
I want to have around £2,000 saved in case of emergencies as well.

What are your thoughts?
«13

Comments

  • fatbelly
    fatbelly Posts: 22,575 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    You are asking which to overpay first?

    Whichever has the highest apr.

    I can't tell which that would be from your info. Maybe if any of these are overdrafts, otherwise the c/c with highest interest rate..

    It might be useful to post a full soa

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


  • tetrarch
    tetrarch Posts: 303 Forumite
    Part of the Furniture 100 Posts Name Dropper
    Some points for clarity:

    Is that £1,500 after paying minimums or before?

    Why is Mortgage 2 and Car not charging interest?

    Credit card 1 looks like a 50% interest charge - is this correct?

    Regards

    Tet
  • RAS
    RAS Posts: 34,949 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    For debts, please include additional information

    APR, end dates of any card deals, end dates of any loans and whether you can pay down early without penalty. And for credit cards, the limit.

    For the car, HP, PCP etc.
    If you've have not made a mistake, you've made nothing
  • MrBowler
    MrBowler Posts: 22 Forumite
    Third Anniversary 10 Posts
    Never been able to do one of those SOA's correctly but this one seems to be a bit easier than the last one i did.

    Please see below i think i covered everything

    [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................ 4000
    Partners monthly income after tax....... 300
    Benefits................................ 75
    Other income............................ 0[b]
    Total monthly income.................... 4375[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 324
    Secured/HP loan repayments.............. 827
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 165
    Electricity............................. 100
    Gas..................................... 100
    Oil..................................... 0
    Water rates............................. 45
    Telephone (land line)................... 0
    Mobile phone............................ 84
    TV Licence.............................. 15
    Satellite/Cable TV...................... 0
    Internet Services....................... 31
    Groceries etc. ......................... 300
    Clothing................................ 50
    Petrol/diesel........................... 320
    Road tax................................ 3
    Car Insurance........................... 45
    Car maintenance (including MOT)......... 20
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 50
    Medical (prescriptions, dentist etc).... 30
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0
    Contents insurance...................... 0
    Life assurance ......................... 45
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 60
    Haircuts................................ 20
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 2634[/b]
    [b]

    Assets[/b]
    Cash.................................... 1500
    House value (Gross)..................... 180000
    Shares and bonds........................ 500
    Car(s).................................. 4000
    Other assets............................ 0[b]
    Total Assets............................ 186000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 78000....(324)......1.49
    Secured Debt.................. 47470....(565.3)....9.9
    Hire Purchase (HP) debt ...... 4369.....(229.9)....9.9<
    Hire Purchase..................224......(11.8).....9.9<
    Hire Purchase..................560......(20).......0[b]
    Total secured & HP debts...... 130623....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Virgin.........................1973......150.......44.9
    Virgin 2.......................4221......150.......25.9
    Dad............................10000.....0.........0
    Simply Be......................1000......50........0
    Studio.........................150.......50........0
    Drafty.........................775.......96.1......12.9
    Halifax Overdraft..............915.......50........0
    Nationwide Overdraft...........1023......50........0
    HSBC Overdraft.................2391......50........0
    Santander......................3508......130.5.....12.9[b]
    Total unsecured debts..........25956.....776.6.....-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 4,375
    Expenses (including HP & secured debts). 2,634
    Available for debt repayments........... 1,741
    Monthly UNsecured debt repayments....... 776.6[b]
    Amount left after debt repayments....... 964.4[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 186,000
    Total HP & Secured debt................. -130,623
    Total Unsecured debt.................... -25,956[b]
    Net Assets.............................. 29,421[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
  • MrBowler
    MrBowler Posts: 22 Forumite
    Third Anniversary 10 Posts
    tetrarch said:
    Some points for clarity:

    Is that £1,500 after paying minimums or before?

    Why is Mortgage 2 and Car not charging interest?

    Credit card 1 looks like a 50% interest charge - is this correct?

    Regards

    Tet
    Yes that is correct, i got the credit card and got into a bit of an issue when paying it all off as a lump sum and my word v theres ended up turning it into a failed payment so they revoked the promotional rate and put me on a high rate, it was originally £4,500 but it has reduced down to this, its 44.9% so not far off the 50%.
  • RAS
    RAS Posts: 34,949 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    MrBowler said:
    Never been able to do one of those SOA's correctly but this one seems to be a bit easier than the last one i did.

    Please see below i think i covered everything

    [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................ 4000
    Partners monthly income after tax....... 300
    Benefits................................ 75
    Other income............................ 0[b]
    Total monthly income.................... 4375[/b][b]

    Monthly Expense Details[/b]
    Mortgage................................ 324
    Secured/HP loan repayments.............. 827
    Rent.................................... 0
    Management charge (leasehold property).. 0
    Council tax............................. 165 lots of round figures. You need the exact figures
    Electricity............................. 100
    Gas..................................... 100
    Oil..................................... 0
    Water rates............................. 45
    Telephone (land line)................... 0
    Mobile phone............................ 84
    TV Licence.............................. 15
    Satellite/Cable TV...................... 0
    Internet Services....................... 31
    Groceries etc. ......................... 300
    Clothing................................ 50
    Petrol/diesel........................... 320 - can you reclaim any of this from work, as it's high mileage.
    Road tax................................ 3
    Car Insurance........................... 45
    Car maintenance (including MOT)......... 20
    Car parking............................. 0
    Other travel............................ 0
    Childcare/nursery....................... 0
    Other child related expenses............ 50
    Medical (prescriptions, dentist etc).... 30
    Pet insurance/vet bills................. 0
    Buildings insurance..................... 0 you need this
    Contents insurance...................... 0 and this
    Life assurance ......................... 45
    Other insurance......................... 0
    Presents (birthday, christmas etc)...... 60
    Haircuts................................ 20
    Entertainment........................... 0
    Holiday................................. 0
    Emergency fund.......................... 0[b]
    Total monthly expenses.................. 2634[/b]
    [b]

    Assets[/b]
    Cash.................................... 1500
    House value (Gross)..................... 180000
    Shares and bonds........................ 500
    Car(s).................................. 4000
    Other assets............................ 0[b]
    Total Assets............................ 186000[/b]
    [b]

    Secured & HP Debts[/b]
    Description....................Debt......Monthly...APR
    Mortgage...................... 78000....(324)......1.49
    Secured Debt.................. 47470....(565.3)....9.9 - what is this for?
    Hire Purchase (HP) debt ...... 4369.....(229.9)....9.9< ditto
    Hire Purchase..................224......(11.8).....9.9< ditto
    Hire Purchase..................560......(20).......0[b] ditto
    Total secured & HP debts...... 130623....-.........-   [/b]

    [b]Unsecured Debts[/b]
    Description....................Debt......Monthly...APR
    Virgin.........................1973......150.......44.9
    Virgin 2.......................4221......150.......25.9
    Dad............................10000.....0.........0
    Simply Be......................1000......50........0
    Studio.........................150.......50........0
    Drafty.........................775.......96.1......12.9
    Halifax Overdraft..............915.......50........0 is this really 0%?
    Nationwide Overdraft...........1023......50........0
    HSBC Overdraft.................2391......50........0
    Santander......................3508......130.5.....12.9[b] Is this a credit card? what is the limit on this?
    Total unsecured debts..........25956.....776.6.....-  [/b]

    [b]
    Monthly Budget Summary[/b]
    Total monthly income.................... 4,375
    Expenses (including HP & secured debts). 2,634
    Available for debt repayments........... 1,741
    Monthly UNsecured debt repayments....... 776.6[b]
    Amount left after debt repayments....... 964.4[/b]

    [b]Personal Balance Sheet Summary[/b]
    Total assets (things you own)........... 186,000
    Total HP & Secured debt................. -130,623
    Total Unsecured debt.................... -25,956[b]
    Net Assets.............................. 29,421[/b]

    [i]Created using the SOA calculator at www.LemonFool.co.uk.
    Reproduced on Moneysavingexpert with permission, using other browser.[/i][/font]
    A few queries.
    If you've have not made a mistake, you've made nothing
  • MrBowler
    MrBowler Posts: 22 Forumite
    Third Anniversary 10 Posts
    fire away, dont mind answering them.

    it does seem the format has come across wrong like it usually does for me
  • Grumpelstiltskin
    Grumpelstiltskin Posts: 5,266 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    Are you sure your overdrafts are  0%, unusual, check them please.

    I would personally get rid of Studio, small amount, but close the account and don't use it again.
    Then I would tackle Virgin but depends on overdrafts.
    If you go down to the woods today you better not go alone.
  • MrBowler
    MrBowler Posts: 22 Forumite
    Third Anniversary 10 Posts
    MrBowler said:
    fire away, dont mind answering them.

    it does seem the format has come across wrong like it usually does for me
    just seen youve put comments on... please see below
    council tax - it is £165 per month
    Electric and Gas i pay £200 in total to even out across the year
    Water rates is exactly £45
    Mobile/TV Livence are correct too, groceries and clothing are estimates.
    Fuel i put £80 in per week, Road tax is £30 per year which i pay off yearly, so that should be £2.50 per month
    Petrol Diesel - yes i possible can reclaim but not sure how, or what i can reclaim as its for a delivery company
    Building and contents - i missed that one sorry as i paid it for year but cant find how much, it was around £250 mark

    Secured debt, its a secondary mortgage that i got to pay off some debts
    Hire Purchase is the Car i own
    the other 2 are outstanding payments on older cars

    Halifax Nationwide and HSBC arent 0% but its based on a daily amount of how much i am in to how much i pay

    Santander is a loan




  • fatbelly
    fatbelly Posts: 22,575 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Cashback Cashier
    On the basis of what you've written, overpay Virgin 1, then Virgin2

    BUT

    Those overdrafts are likely to have an effective apr of around 40% so unless they are genuinely fee-free and interest-free i'd  probably start there and try to BT the Virgin balance somewhere better

    https://www.moneysavingexpert.com/banking/cut-overdraft-costs/
★ ★ ★ Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 349.9K Banking & Borrowing
  • 252.6K Reduce Debt & Boost Income
  • 453K Spending & Discounts
  • 242.8K Work, Benefits & Business
  • 619.7K Mortgages, Homes & Bills
  • 176.4K Life & Family
  • 255.8K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 15.1K Coronavirus Support Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.
Update Your Picture