How can I stop living pay to pay cheque?

Flobberchops wrote: »

(For Pearl123 - I believe Tithing is a 10% donation some people choose to make on religious grounds) [edit - crossposted several times!]

Ambitiouspanda - I think the first issue is that you don't seem to have any emergency savings. Clearing debt ASAP is a noble goal but what if between now and June (when your finances have recovered) you need emergency dental treatment, or you sit on your glasses, or the fridge breaks? Your £100 disposable income may not cut it, and even if it did that would leave you incredibly stretched.

The £3700 CC debt that you're about to start paying interest on is important, but you may be able to kick that problem down the road a little. YorkshireBoy already mentioned a balance transfer to another card with a 0% period which would take the pressure off you for a few more months. Whether you can find a provider willing to take on that amount of debt is another question; if you're not able to transfer all your CC debt this way you might consider a personal loan to restructure the remaining debt. A loan isn't an ideal solution either but if you can repay your debt at a rate of 10% or less (fairly average for a bank loan) as opposed to the 20-30% you're probably paying on your cards, that's the lesser of two evils. It may also bring down your monthly repayment figure, leaving you with a bit more cash in your pocket. You can generally make early repayment to clear the debt when you're able, but be aware there may be an early settlement fee - read the Ts&Cs carefully, do the maths and see whether it would help you.

I'm a Londoner too and that Oyster figure seems very high. Most people I know who buy a monthly pass, even in Zone 1, don't tend to spend more than £80 a month. Are you sure you couldn't reduce that expense?

I perceive most of the other expenses as either essential (rent, bills) or non-negotiable lifestyle choices (hair, tithing) so there's maybe not too much fat to trim there. You could probably get your food bill down to £100 or less if you completely cut out buying sandwiches, coffees etc and make a commitment to bulk-cook on a budget at home. Plenty of online resources will tell you how to do this!

In summary, what really rings alarm bells in my head is that amount of Credit Card debt and the rate you're paying it off, I think it's putting you in a position where you'll be very vulnerable to even quite minor emergencies (and come April when the interest kicks in the expense will be even greater). So, please do consider ways to extend the 0% period or restructure the debt in a way that is more affordable.

In the longer term - once you've 1) built an emergency fund of at least £1000 and 2) cleared your debts - I think you should follow the principle of paying yourself first. Because you do tithing this is actually a habit you already follow! In addition to earmarking 10% of your income for charity, why not allocate 10% (or more) for your own savings. Unsuccessful savers tend to spend the money they earn, and then save what's left, which is often very little or nothing. A better way is to save first (set up a standing order the day you get paid so it's automatic and prioritised) and then spend what's left.

Beyond that it really comes down to what your personal goals and circumstances are. If you can afford to invest in stocks (cheap funds, through an ISA) or contribute to a workplace pension those are normally good ideas. Planning on buying a house? Look into Help To Buy or Lifetime ISAs. Do you have large purchases planned, or a holiday coming up? Consider the "piggybanking" method where you set up a separate savings account for each goal and dripfeed in each month as part of your main savings. Keep your goals concrete and trackable rather than vague aspirations - so, not "I want to go on holiday in the next couple of years" but "By January 2020 I will have saved £2000 to go to Australia. I will achieve this by saving £100 a month". "A goal without a plan is just a wish", that's my motto!