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Lizzy D update

Help and discussions for strategies to get out of debt
lizzydripin
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Lizzy D update

#49469

Postby lizzydripin » April 28th, 2017, 2:14 pm

Hi all

Things are moving in the right direction and I am feeling quite positive about progress, I did not pay my savings into my debts, somehow I just haven't been able to bring myself to do this, but I have increased the amount payed in slightly.

Debt:
£2015.57 on barclaycard at 15.45%
£1269.63 0n Bank of Scotland at 22.70%
-------------
£3285.20

Savings:
£1499.00 savings account
£800.00 cash fund
£800.00 emergency fund
.............
£3099.00

I have a couple of extra expenses, child related I will need to pay B and B and train fare for youngest sons unpaid work experience and a deposit for his next year accommodation, next month so unlikely to increase my saving but should be able to maintain the extra debt payment.

All the best
Lizzy D :)

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Re: Lizzy D update

#50807

Postby amh4 » May 3rd, 2017, 9:29 am

Hi Lizzy,
I am not one of the experts, but looking at your debts, I wonder why you are not thinking of transferring those balances onto a 0% card. I know First Direct are offering one at the moment, and I believe there are a number of others. It's just so sad that those levels of interest on your card and loan are holding you back from finishing with debt and your day of the Happy Dance.
Apologies if I have missed something along the way.
Anne-Marie

AleisterCrowley
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Re: Lizzy D update

#51446

Postby AleisterCrowley » May 5th, 2017, 4:09 pm

Hi
I am absolutely NOT one of the experts (there may be one along in a minute) but -

What's stopping you emptying the savings account and clearing that Bank of Scotland - 22.70% debt completely?

It's very sensible to keep a cash emergency fund and I dont know your personal circumstances - is the £800+£800 sufficient?

As I said, I don't know the full story, so apologies if I have got the wrong end of the stick

Best Wishes
AC

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Re: Lizzy D update

#51629

Postby PinkDalek » May 6th, 2017, 1:40 pm

AleisterCrowley wrote:Hi
I am absolutely NOT one of the experts (there may be one along in a minute) but -

What's stopping you emptying the savings account and clearing that Bank of Scotland - 22.70% debt completely?

It's very sensible to keep a cash emergency fund and I dont know your personal circumstances - is the £800+£800 sufficient?

As I said, I don't know the full story, so apologies if I have got the wrong end of the stick

Best Wishes
AC


It looks like the I have a couple of extra expenses, child related I will need to pay B and B and train fare for youngest sons unpaid work experience and a deposit for his next year accommodation, next month so unlikely to increase my saving but should be able to maintain the extra debt payment. might be the reason.

Additional history here:

viewtopic.php?f=10&t=3635&p=35549#p35549

It might be an idea if Lizzy continues with existing threads, rather than start new ones for each update. I'll ask the mods if they wish to transfer this Lizzy D update topic to the earlier one.

lizzydripin
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Re: Lizzy D update

#52103

Postby lizzydripin » May 8th, 2017, 8:41 pm

Hi All,

Thank you for making suggestions on how I could get my debts paid off quicker by using savings and a 0% card.

I have thought about this course of action and could nearly pay the whole amount, but although it may not make too much sense the savings give me a sense of security. For one reason we live in tied accommodation and I always worry that we could end up with out a home at any point. At the very least I feel I like the idea of having money for a deposit and month or twos rent will be helpful. I am still able to maintain £550.00 debt reduction payment and to add a little to my savings each month. I also have two children still to support at university hopefully the oldest will not need so much help now as he will be getting paid. The youngest though seems to be doing a course that has more costs and also has only got one months paid work this summer.

As far as transferring to 0% I have considered this often but the debts are in my husband's name so he would have to do it, although I think he may now be persuaded, when calculating on a snowball I think the saving would be well under £100 overall, plus there is a transfer fee so maybe not worth the trouble, as he feels he would not get credit. Am I wrong, I will look into it again but if anyone can give me an idea of the difference it will make to the over all debt I would appreciate it.

Please do tell me if you think I am making a mistake with keeping the savings or what a sensible amount would be in my circumstance.

Many thanks
Lizzy D

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Re: Lizzy D update

#52159

Postby iain123 » May 9th, 2017, 8:24 am

I think you’re crazy keeping the savings. You used to be able to get cash from your credit card – I’m not sure if yours has that facility or not? Although, if I recall correctly you get hammered and pay interest straight away on cash withdrawals. I’d be tempted to pay off your credit card debts straight away (apart from a small float) and either use the credit card cash withdrawal feature or preferably arrange an overdraft facility with your bank to give you the understandable ‘sense of security’. Good luck.

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Re: Lizzy D update

#52185

Postby AleisterCrowley » May 9th, 2017, 10:02 am

There's the risk that the credit limits may be reduced as the o/p pays off the card debt (perhaps?) -so a reasonable buffer of cash to deal with known future one-off expenditure plus an emergency fund would seem sensible.
Paying down debt at 23% is always going to be a more effective use of money than saving it at <1% though.

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Re: Lizzy D update

#52221

Postby lizzydripin » May 9th, 2017, 11:53 am

Hi, The question I suppose is what is a reasonable buffer and a reasonable emergency fund for my situation

Thanks Lizzy

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Re: Lizzy D update

#52266

Postby AleisterCrowley » May 9th, 2017, 2:05 pm

Phew, that's a question...
Partly depends on how easy/cheap it would be for you to borrow again should the need arise

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Re: Lizzy D update

#52373

Postby Tortoise1000 » May 9th, 2017, 9:28 pm

Well, Lizzy, you have come so far and it hasn't been easy. Do you still have the coat pocket fund? :-) I can quite understand if you want to just carry on as you are. £3,000 is not a large contingency fund particularly if you have a student to fork out for. Students don't always get their deposits back, either, and these pernicious agency fees don't seem to have disappeared yet. It looks like you will have this clear by Christmas anyway. Wont that be wonderful to have all that extra money each month? I cant wait to see you come to the end of this! You have done so brilliantly.

T

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Re: Lizzy D update

#52379

Postby lizzydripin » May 9th, 2017, 10:03 pm

Hi T
Thank you for your encouraging words :)

The coat pocket fund is now the cash fund and is a little more than stated in my update it is now £910.00

Having the money does give me a sense of security and I find that easier to add to, I am enjoying seeing it grow . :D I have never really had savings before!! But I will pay some extra into one of the cards this month as well, so long as nothing unexpected crops up!!

LizzyD

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Re: Lizzy D update

#52383

Postby AleisterCrowley » May 9th, 2017, 10:12 pm

Every £100 off the worst card will save you £23 over the next year. Every £100 into savings will make you about £1 over the next year - if you find a good account...

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Re: Lizzy D update

#52387

Postby Tortoise1000 » May 9th, 2017, 10:27 pm

That is interesting psychology. If you can save more easily than you can pay off debt, then that is a point in saving's favour! But one does swim against the tide with it, as AleisterCrowley says. Dont add to them for now, just blitz the rest of the debt down. You will be able to save loads soon enough. Maybe when you get a bit closer to the end, say in the autumn, you will be able to use savings to clear debt. Because the shorter the time you have a reduced savings pot, the less the risk of losing your home during it. Also in autumn you can get students settled in new lodgings if needed and see the academic year ahead more clearly.

When you say the cash fund, do you mean you have £800 in the house? It's safer in the bank. .

T

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Re: Lizzy D update

#52393

Postby AleisterCrowley » May 9th, 2017, 10:57 pm

Here's Martin Lewis's take on it -
I don't 100% agree with this * but it's an interesting read;

http://www.moneysavingexpert.com/savings/pay-off-debts


There's a good point here , which had occurred to me (!) - imagine your savings are with the same bank as your debts. You are effectively lending them your money for <£1 in £100 and they are lending it back to you and charging you £23 per £100!!

*he doesn't think an emergency fund is a good idea - but adds "don't cut up your credit cards, it's important to keep the credit available in case of a substantial emergency " and ".. overall, whether an emergency happens or not, the best result is to pay off your debts with your savings. The only time to beware of this is if you're not assured of being able to reborrow the cash"

Perhaps in your situation a reasonable (that word again) emergency fund to cover known future outgoings is the best plan.
Just for discussion as i'm not an expert...and definitely not qualified to give advice

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Re: Lizzy D update

#52450

Postby Tortoise1000 » May 10th, 2017, 9:35 am

If you want us to quantify a suitable emergency fund, then I'd say add up what could happen between now and when you have cleared the debt. You said a deposit and a couple of months rent. How much might that be? Then anything else that would upset your normal outgoings, some child emergency perhaps. I wouldn't add in things like car repairs, they could go back on the CC if necessary. Save the amount you calculate and no more. Then clear the debt and then you can enjoy proper saving. Its lovely saving up for things, you get the anticipation and the money at the same time :-)

T

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Re: Lizzy D update

#52618

Postby lizzydripin » May 10th, 2017, 8:54 pm

Hi,
Thank you for the link I have read the article. I can see that it would be sensible to pay off the debts and start fresh with the savings. We do no longer have the credit cards though, they were cut up. I do have an overdraft of £500 on each of two accounts. So access to £1000.00 in an emergency.

The only card I own is a debt card, both credit cards were in OH's name.

I think the best thing maybe in my situation to pay off the higher interest card, £1269.63, with the savings, then increase the payment to the other card to £550.00 a month, but keep hold of the cash and emergency fund at the moment for peace of mind. That would give me access to £2600.00 if I needed it.

Thoughts please :?:
LizzyD

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Re: Lizzy D update

#52920

Postby Tortoise1000 » May 12th, 2017, 7:05 am

I think that is a good plan. Go for it.

T

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Re: Lizzy D update

#52934

Postby midnightcatprowl » May 12th, 2017, 8:32 am

Agree with Tortoise, that's a good plan, go for it!

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Re: Lizzy D update

#52939

Postby AleisterCrowley » May 12th, 2017, 8:59 am

Sounds like a reasonable compromise, good luck !

lizzydripin
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Re: Lizzy D update

#61209

Postby lizzydripin » June 19th, 2017, 7:14 pm

Hi,
I was thinking of posting a new soa but can't work out how to do it, can anyone point me in the right direction please?
Thanks
Lizzy D


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