Bored of debt

tim_n · 9 April 2009 at 11:22AM

Lots of err... good? debt...

I have a mortgage (93k?) student loan (3k?) loan from parents (7.9k) and a temporary 'loan' from my wife to be (£1.9k - this is being paid off first, it'll be gone in 4 months)

I have savings (3.5k) in an ISA.

the other loans involve repayments of £542 a month.

CC is paid off in full each month. I have two. I'm both poor and good at budgeting. I have a wonderful budget which I never stick to.

I'm looking at overpaying my mortgage now (at no additional cost to the above £542) by £155 a month - should reduce the mortgage by about 7 years or so my faulty estimates go.

I'm working on selling a lot of my stuff at bootsales over the next few months, I'm also planning on growing most of my own veg to reduce food bills (though with my horrible pale skin, it'll probably be spent on value sun cream)

This is my first diary entry, hopefully not the last. This weekend we're hoping to prepare most the stuff for bootsales and if the weather is good we're aiming to get to one this weekend!

ebonylight · 9 April 2009 at 11:27AM

Morning! Good luck with the overpayments - sounds like you've got a lot covered already.

Could I suggest, instead of holding £3k, take £1k out of it and pay a massive lump off something now? You'll save more in interest payments than what you will gain from savings interest.

tim_n · 9 April 2009 at 12:00PM

That's true ebonylight, but I feel almost naked without any savings - if the boiler goes or something I could be in trouble. I like to stick with Alvin Halls rule that you have enough money to get by for six months if you suddenly lost your job and couldn't pay. I'd need about £6,600 to do that and I aim to have that pretty much by Christmas.

What I've not covered on this board is my current current account (£32) situation and the credit card bill I'm about to pay tomorrow (£725) plus the money I'm paying back to my fiancee (£475) the week after when I get paid. I'll be roughly £414 overdrawn for about four weeks. Not a problem because it's fee free, but I can't touch my ISA. In early July I'll open my next ISA and pay in about £360 every four weeks which will give me enough (7.1k) to feel safe. By Christmas I'll have approximately £2,800 extra available if I don't get any nasty suprises which I can put to the mortgage asap.

I say I'm tired of debt, but one of the main motivators to clean up my act and start budgeting is that I want a family, and I'll need bigger accomodation. Currently my flat is too small, but we've got to work out whether we're going to sell it and get somewhere else, or change the mortgage to a buy to let and save up a big enough deposit to buy our own place.

I'm disappointed in myself for wasting so much money over the last few years.

Lemon_Tree · 9 April 2009 at 1:52PM

firstly well done for making the leap and starting your diary and deciding to tackle your debts.
If you have a wonderful budget then why don't you use this to produce a SOA which you'll find on a sticky at the top of the boards, people can then give advice on little ways to save but which certainly build up. But you also need to be realistic that you write down what you actually spend not what looks good in your budget.
have you looked around this site about the whole debate of saving verses debt?
If you're planning on overpaying your mortgage, this would imply to me that your mortgage is your highest interest rate. If it's not then you really should be putting the money against the highest debt.

Bored of debt

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