Help Please - Want to be Debt Free
Comments
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If you can go back to Jan 1 2018 and see what the debts were then and what they were at the Jan 1st 2019.
during 2018 you had £2,900*12(£35k) + the difference in debt to account for
It might help to see if you can see where it all went as a guide for 2019.
Your current SOA allocates £22k which is likely to be low.
Also as has been said a spending diary is needed going forward to track where it goes, include any fees etc. in the diary
When starting from "where has it all gone" the SOA takes a while to reflect the reality as you discover where your money really goes.
Credit costs are high on the list of things to tackle.
Cycling spends on a CC paying interest is not cost effective if the rate is high.
How much interest is on that card each month?
I would consider a long term 0% spending card.
Use cashflow of only normal spends onto that to free up cash to tackle the highest rates and move the debt to longer term at 0%
(NOTE: only budgeted spends no new debts)
You should clear the Tesco card quite quickly.
Also should have enough to cover the first £1k on the virgin card before the rate rises in July
What rates will virgin go to in July&Sept?
The Barclaycard is min payment only to be reviewed later this year as there is £2,500 to be paid by April 2020 and then another £1k by June
With the wife OD charges how are they made up is it interest, daily charges or other fees.
It may be possible to restructure the cash flow to reduce those.
(don't forget to put these charges on the SOA)
I would not close the Tesco card once paid off but let it run a couple of months paid off in full to re-establish the interest free period for paid off in full.
Then consider it for future 0% spend offers or BT if the fees are not to high.
When is the mortgage up for review?
Which lender?
LTV around 65%, 70% LTV mortgages are under 2%
£150k 3% £595pm 33y 4 months
33years would be £597 2% would be £518 freeing up £80pm0 -
getmore4less wrote: »If you can go back to Jan 1 2018 and see what the debts were then and what they were at the Jan 1st 2019.
during 2018 you had £2,900*12(£35k) + the difference in debt to account for
It might help to see if you can see where it all went as a guide for 2019.
Your current SOA allocates £22k which is likely to be low.
Also as has been said a spending diary is needed going forward to track where it goes, include any fees etc. in the diary
When starting from "where has it all gone" the SOA takes a while to reflect the reality as you discover where your money really goes.
Credit costs are high on the list of things to tackle.
Cycling spends on a CC paying interest is not cost effective if the rate is high.
How much interest is on that card each month?
I would consider a long term 0% spending card.
Use cashflow of only normal spends onto that to free up cash to tackle the highest rates and move the debt to longer term at 0%
(NOTE: only budgeted spends no new debts)
You should clear the Tesco card quite quickly.
Also should have enough to cover the first £1k on the virgin card before the rate rises in July
What rates will virgin go to in July&Sept?
The Barclaycard is min payment only to be reviewed later this year as there is £2,500 to be paid by April 2020 and then another £1k by June
With the wife OD charges how are they made up is it interest, daily charges or other fees.
It may be possible to restructure the cash flow to reduce those.
(don't forget to put these charges on the SOA)
I would not close the Tesco card once paid off but let it run a couple of months paid off in full to re-establish the interest free period for paid off in full.
Then consider it for future 0% spend offers or BT if the fees are not to high.
When is the mortgage up for review?
Which lender?
LTV around 65%, 70% LTV mortgages are under 2%
£150k 3% £595pm 33y 4 months
33years would be £597 2% would be £518 freeing up £80pm
Thanks so much for your detailed reply
Our 5 year mortgage fixed rate is up in January 2021 and it's with Virgin Money.0 -
You definately need to find a way of tracking your spends. When me and the missus had to re budget because we just had no idea where it was all going. It wasn't the bills - they by and large stayed fairly consistent, but it was all the other stuff!
We set up a Whatsapp group - just me and her - and just sent a little message every time we spent something "Tesco - Groceries £80", or "Fuel £ 20", "Cash Withdrawal £ 50 - night out"
When you tot all these up you'll be amazed how much money is unallocated!0 -
Thank you for your reply
I did a few Balance transfers on the Barclaycard so have different expiry dates for the 0%, these are below:
Interest On Your Balance Transfer £0.00 Balance £7880.47 Interest 0.0000%
To 17 Mar 2021
Interest On Your Balance Transfer £0.00 Balance £1024.00 Interest 0.0000%
To 01 Jun 2020
Interest On Your Transfer To Bank £0.00 Balance £1134.99 Interest 0.0000%
To 01 Feb 2020
Interest On Your Transfer To Bank £0.00 Balance £1484.80 Interest 0.0000%
To 01 Apr 2020
The Virgin dates are below:
Transfer Balance / Fees
0.00% £3000.00 30/09/2019
Transfer Balance / Fees
0.00% £1000.00 31/07/2019
Is it worth trying to get my wife a balance transfer to pay off her MBNA card do you think?
I think if the rate is 22.9% and you are focusing on clearing the Tesco card then moving the MBNA card allows you to focus on the overdraft. You should not be using the Tesco card for spends. It is not cost efficient as you are paying interest on it. Recycling money on cards is not ideal but unavoidable at the beginning when you are getting a plan together. I would let the Barclaycard run at just over minimum payment as the deals don't expire for another year or more.
If you can get the MBNA card moved
Focus on
1 Tesco
2 wife's overdraft
3 Virgin
4 Barclaycard and then MBNA assuming the deal is later than the Barclaycards. Focus on clearing the deal expiring quickest.
I think a good aim initially is to find £300 from your surplus in addition to the £324 you already pay to the debt each month. Focus on keeping in budgets, not using the cards or overdraft at all and saving for emergencies, annual bills etc etc. If your savings build up very quickly and you get on top of budgeting quickly then use extra money to clear the debt focusing on the priorities above. Obviously if you cannot move MBNA then focus on that and Tesco first.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0 -
enthusiasticsaver wrote: »I think if the rate is 22.9% and you are focusing on clearing the Tesco card then moving the MBNA card allows you to focus on the overdraft. You should not be using the Tesco card for spends. It is not cost efficient as you are paying interest on it. Recycling money on cards is not ideal but unavoidable at the beginning when you are getting a plan together. I would let the Barclaycard run at just over minimum payment as the deals don't expire for another year or more.
If you can get the MBNA card moved
Focus on
1 Tesco
2 wife's overdraft
3 Virgin
4 Barclaycard and then MBNA assuming the deal is later than the Barclaycards. Focus on clearing the deal expiring quickest.
I think a good aim initially is to find £300 from your surplus in addition to the £324 you already pay to the debt each month. Focus on keeping in budgets, not using the cards or overdraft at all and saving for emergencies, annual bills etc etc. If your savings build up very quickly and you get on top of budgeting quickly then use extra money to clear the debt focusing on the priorities above. Obviously if you cannot move MBNA then focus on that and Tesco first.
Thanks so much for your reply. Having a plan of action now certainly makes things seem a bit more hopeful now.
My wife has applied for a Money Transfer credit card with MBNA and although they couldn't offer full 0% period they have offered 18 months which will give some breathing space and enable her to clear her overdraft fully and maybe her credit card if the credit limit allows. We have disposed of our credit cards now so the temptation won't be there.
Is there anything else that we should do in the meantime do you think? The next thing for us will be to use that budget app, what was it called again as I have forgotten
Thank you again 0 -
quite a few people like YNAB (you need a budget) but a spreadsheet can work just as well as long as you both have access to it and keep it up to dateI’m a Senior Forum Ambassador and I support the Forum Team on the Pensions, Annuities & Retirement Planning, Loans
& Credit Cards boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com.
All views are my own and not the official line of MoneySavingExpert.0 -
What is the fee on the money transfer card?
Spend cards are often cheaper.0 -
getmore4less wrote: »What is the fee on the money transfer card?
Spend cards are often cheaper.
Hi getmore4less,
The fee on the money transfer card was 2.99% and hopefully we are going to be able to transfer £5,000 depending on the credit limit my wife gets given.0 -
There are quite a few ways you can record spends and track budgets. I used to use spending tracker app on my phone which can be synced with another phone so you and your wife could both use that. It just records spends and how much you have spent rather than impose limits on each category so a spreadsheet alongside may be useful. I just use spreadsheets.
Some people use YNAB although I don't. There is a free trial but it can take a while to set up and get used to it. Clear checkbook is completely free and you can set up an envelope system on it so your income can be divided into say groceries, entertainment, presents, insurances etc etc. Or you can use separate accounts for things so one for annual insurances, holidays, Christmas and birthdays , one for emergency savings and maybe an account for monthly spends like personal money for each of you, fuel costs, food and entertainment. Depends on what suits you and be prepared to adjust budgets over the first 3 to 6 months. If you have never budgeted before it is a learning curve.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0 -
18 months is better than nothing but if you move £5000 there will be a fee of around £150 but one years interest on the MBNA card is £687 so it is definitely worth doing given you have the Virgin Media expiring in July and September, Tesco card and overdraft still charging interest. You may need to do another transfer but hopefully as the debt reduces you will get offered better and longer deals. If you repay around £625 each month that will be £7500 over the year and you could feasibly be debt free in 3 years. Given your income I think that is realistic but would still leave you some disposable income. That involves sticking to a budget though.Hi getmore4less,
The fee on the money transfer card was 2.99% and hopefully we are going to be able to transfer £5,000 depending on the credit limit my wife gets given.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0
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