What to do with surplus cash after reducing SOA?

WhoopieDoodle

Hello everyone. I hope you are all well.

I would like some advice please, if possible.

My OH has just begun a DMP. Over the past couple of weeks I have been through all our utility bills etc and have managed to switch, swap etc and have reduced these by approximately £50 a month.

Now, do we increase the payment on the DMP or save the money? OH is worried that if we increase the payment on the DMP then the utility bills could rise at a later date so I am really unsure what to do.

Any suggestions/advice would be greatly appreciated.

Thank you for your time.

tara66_2

Hi,

Well done on the savings made. If you can be disciplined about not wasting the money (I struggle with this) then it would be good to use it to build up an emergency fund. Especially as fuel prices etc are a bit crazy at moment. It would also allow you to save a bit towards full and final settlements on some of the debts in the future.

Also when your plan is reviewed which I understand happens either at six months or annually you will have a better idea of whether you could manage to regularly increase your payments. I'm no expert only just contacted CCCS this morning (yippee) to start a DMP but just a view.

Tara

Gemmzie

Save the money, you're allowed a fund for household repairs etc. Use it for that.

WhoopieDoodle

tara66 and Gemmzie, thank you for the replies (so fast!)

We did wonder whether to put it into an "emergency fund" so we will go with that, thank you.

We appear to have a mindset that every spare penny should go into the DMP, but of course we need to build up savings for repairs, etc too so it's all a little confusing and worrying.

OH does have a guaranteed payrise once a year, so we were planning on upping the DMP payments then.

I know we were told not to make the odd payment to the creditors over what we are paying otherwise they will want more on a regular basis.

OH is doing lots of overtime so we can get some cash behind us and I am working harder too, being self-employed I can push myself to earn that little extra.

Mind you, I should be working now but I'm sitting here!!!!! Tut!

I was amazed at how much we could save by switching etc on our utility bills. And we have had a water meter installed which has brought our monthly payment down from £32 to £18! (It's only 2 of us in the house)

Anyway, better do some work!

Thank you again xx

neverdespairgirl

Hi - I'd be disciplined, not spend the cash, and stick it in an emergencies-only account, for when the dentist is needed / car breaks down / pipes leak etc!

WhoopieDoodle

Thank you neverdespairgirl, it is a grand idea and one we will do.

I have managed to account for every penny, with different pots for various items, including Christmas, etc and even a tiny "leisure" account which will enable us to hire a dvd occasionally, or go to the cinema.

Our lives are changing quite drastically but the strange thing is, now the initial worry of it has passed (only slightly mind) we feel better off! And it has lead us to believe that we have been quite irresponsible with money in the past and could have been so much better off had we lived like this to start with.

Doing a budget is a godsend and actually frees up more cash than you realise.

I know that we are going to have difficult days and good days, but the only way through is to keep seeing it all as a challenge and we know one day we will be debt free! Although that is some time in the future, but at least now our debts are reducing rather than rising!

xx