Taking control of the emotional spending. On my way to being debt free

Candlelover

Morning,

I've been on here a long time and followed a lot of inspiration al journeys. It's time I now ensured I was following the same strategies to pay off my final three debts.

The first is my mortgage. I owe around 167k and it is due up in October 2025 with a huge increase expected from my fix. The house is worth around 325k so a good chunk of equity.

The second is my car. A silly purchase and an exchange meant I'm not in positive equity. I owe approximately 19k on this. APR 8.8%

Lastly is my bathroom. I owe 6.8k and 0% Apr.

Although it's tempting to oay off the lower don't, this has 0% interest for the entire duration, so doesn't make sense.

My wages and income are good.
I earn just over 57k a year from one job, around 3k from a second, I get almost another 1k a month from other sources as well.

I've just been given some money as well to support me if I need it. It would pay off debt, but that would then deplete the amount. 

My bills equate to £2500 a month, which includes everything. I have a dependent and she does numerous clubs.

I'm on my own managing everything so it really is just on me to make this work. 

My weakness is emotional spending. It is what hinders me the most. I've started to pay off debt as soon as I get paid to ensure that it does get paid off more quickly. 

Hoping I can keep the momentum. 

I've cut back all bills I can. My last one is broadband which will be halved in April. I'm not extravagant on anything, shop in the budget supermarkets but always want to ensure my dependant can do every club she wants. 

Hopefully this year will be the change I am hoping for.

Sarahwithlove

Could you use Savings to pay off the car? Or a bit chunk of it? Keep a small amount of savings for emergencies but you'll have a better disposable income to save up again and hopefully save alot of interest. 

Candlelover

Sarahwithlove said:

Could you use Savings to pay off the car? Or a bit chunk of it? Keep a small amount of savings for emergencies but you'll have a better disposable income to save up again and hopefully save alot of interest. 

Yes, i could. I'm not sure I'd ever get a sum like this again though so have kept it as it is. I think I'm too scared to spend it. 

I find saving up difficult. I do try and do have some.savings, but not loads. When I got the lump sum, I used my emergency fund to pay off as much debt as I could. 

Brie

Maybe you could think of borrowing from your savings.  Use them to pay off the car, bung the extra money you have available since you don't have the bill to overpay on your mortgage to bring it down as much as possible and continue to do that when you renew the mortgage. 

The quick you pay your debts off the less interest you are charged and the sooner you will have money you can plow back into your savings.  (stating the obvious!!)

MFWannabe

How much do you pay each month for your car? 

Would you still have savings if you paid the car off? 

There’s no point paying 8.8% if you don’t have to 
Also you are a high earner so you can only make £500 a year in interest before you start paying tax; obviously you’d max out an isa first 

Candlelover

Brie said:

Maybe you could think of borrowing from your savings.  Use them to pay off the car, bung the extra money you have available since you don't have the bill to overpay on your mortgage to bring it down as much as possible and continue to do that when you renew the mortgage. 

The quick you pay your debts off the less interest you are charged and the sooner you will have money you can plow back into your savings.  (stating the obvious!!)

MFWannabe said:

How much do you pay each month for your car? 

Would you still have savings if you paid the car off? 

There’s no point paying 8.8% if you don’t have to 
Also you are a high earner so you can only make £500 a year in interest before you start paying tax; obviously you’d max out an isa first 

Thank you, i pay £264 a month however, top this up a further £500 with my earnings to lower it more and reduce interest. Currently the extra debt paying reduce the monthly amount. Once it goes under £200, I'll change it to reduce the term. 

No, the money would not cover my car loan. I wouldn't use it to pay off the car loan unless it can pay off the whole amount, and even then I'd be reluctant. I find saving hard and do not see myself having this lump.sum again and would rather look at investment opportunities with it. The alternative is looking at reducing it the way I am and overpaying as much as I can. 

My work isn't secure for the future hence why I'm reluctant to use this money right now. 

Thank you for all the suggestions. Your input is very much appreciated.