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Can someone help me make a plan of action?

(42 Posts)
RavioliOnToast Sat 01-Oct-16 08:42:35

I have a barclaycard with a balance of £821 and a next account with a balance of about £745.

I've just started a new job with contracted hours and so will be getting regular wages again. I'll be working 18.5 hours a week and earning 189£ pw.

This will average about £800 per month with my overnight allowance.

My initial idea before I start taking chunks out is-

My first wage will be 4 weeks full time, no overnights, so will come in at about £1000 after tax and ni- I was going to pay £200 for my tumble dryer (bought on buy now pay later, £200 is the entire balance so that could be gone), 2/300 for Christmas presents. £200 away for minimum payments on the cards whilst I save some kind of cushion to keep me afloat. £400 for shopping and things (won't spend this amount though), anything left, into savings.

Next month will be the £800- with this wage, I was going to half whatever I get paid and pay it off one of the cards. Or shall I just put £200 towards it, plus last months £200 for repayments and then put £200 into savings? Repeat the month after... I don't want to end up in a situation where I have no money left for the month so then start putting money on my CC again. I want them paid and closed.

What would you clever lot do?

Scotmum83 Sat 01-Oct-16 09:14:01

I think the advice is always pay off credit card debt before saving as you'll never get enough interest to make it worth while. I'd pay as much on to the cc as possible. Have you tried transferring the balance of you're next card on to the cc or getting a 0% balance card for both. Then start paying that off without having any more interest building up. Store cards have huge interest rates. Hope that helps.

RavioliOnToast Sat 01-Oct-16 10:49:24

We've already consolidated my cc into a 0% card that we are paying off and I've managed to run up loads of debt again. I want it paid off and closed. I'm not going to save hardcore just have a 2/300 cushion in case something breaks so that we don't have to put it on a cc.

I really don't know what I'm going to do sad it reality, the debt isn't even that big. Not in comparison to what it could be, but then my income isn't marvellous either...

MimsyPimsy Sat 01-Oct-16 12:03:22

2/300 for Christmas presents
Personally, I wouldn't be spending that much on Xmas presents. Who are they for?

Mum4Fergus Sat 01-Oct-16 12:30:45

General rule of thumb is debts first (Next card is extortionate from what I remember)...have you sat and calculated a proper budget/forecast? I work based on Dave Ramsay and a zero based budget every month...calculate exactly how much needs to go where...minimum payments on everything but one debt which gets every penny on what I have left of budget...

Mum4Fergus Sat 01-Oct-16 12:32:41

I didn't do the emergency fund DR recommends so no cushion per day however I do keep a £500 balance on a CC for real emergencies i.e. Car repair, not shoes! I find having an emergency fund I can access too easy to dip into...

RavioliOnToast Sat 01-Oct-16 12:48:11

The Christmas presents are both DCs. I always buy on cash back websites and both my cards are linked up to cash back sites. I tend to only buy in sales or on offers so I'm hoping that actually I won't spend that much. Will get dh something small and that'll be the 2/300.

I can't wait to be able to close one of the cards- I did really well a few months ago, closed my fashion world account and my very account. Then my hours dramatically reduced (zero hour contract) and it all came to a grinding halt!

The tumble dryer is dhs very account as when we had dd2 I was drowning in washing and house work, had severe pnd and that massively took a whole load of stress off.

I've found that his month I don't even have money for a food shop, so again, it'll have to go on my credit card. That's only because technically I don't have an income yet so we're really feeling the pinch this month and next until I start getting a regular wage

RavioliOnToast Sat 01-Oct-16 12:53:08

I didn't really get on with YNAB before and it wasn't for trying either! Any other budgeting tools?

Lightsoffplease Sat 01-Oct-16 13:38:14

OP, do you live near a city/large town? If so, go in to town on a day off from work with say £50-60 in your purse for each DC, that should be a perfectly adequate amount to spend on them. IMO there are more bargains to be had that way and you're more conscious of your spending.

RavioliOnToast Sat 01-Oct-16 13:42:54

Yeah I live near Sunderland and Newcastle so relatively large towns. I always just feel bad when they don't have much to open. And toys are quite expensive now too. I'm sucked in by consumerism and that I should be buying them loads.

RavioliOnToast Sat 01-Oct-16 13:46:58

I just rang my credit card company and my interest rate is 30.06% annually. It makes sense to try and get rid of this first with it being higher interest and higher amount?

Lightsoffplease Sat 01-Oct-16 14:52:23

Yes, start with highest interest cc. Personally I'd pay double the minimum off each account until after Xmas and then bang on as much as possible after the new year.

RavioliOnToast Sat 01-Oct-16 14:56:41

Mum4 what is a zero based budget?

Mum4Fergus Sat 01-Oct-16 17:09:50

Have a Google for Dave Ramsey...basically every penny of my income is accounted for, I literally do not have a penny left once all my bills are paid and food/petrol is budgeted for. If one of my budget categories has a surplus at the end of the month, even if only a few pounds, it get paid towards whatever debt I'm concentrating on paying down ...

InTheDessert Sat 01-Oct-16 17:20:03

What is the interest rate on each of the three debts??
Pay minimum of the two with the lowest APR, and put everything you can /are comfortable with towards the one with the highest APR.
Don't worry if it is the biggest, smallest or Middle amount. Get rid of the one costing you the most interest, and hammer it as hard as you can.

Check the tumble drier doesn't have an early redemption charge.

Well done on getting 2 lines of credit shut down, and getting a new job. That's amazing.

RavioliOnToast Sat 01-Oct-16 18:20:10

Thanks Dessert

The tumble dryer is due to be paid in November or we'll start getting interest on it so I'd rather clear that first. Going to go halfs with dh on that one as it's on his very acct cause I didn't want to add anything extra to mine when it was open.

The barclaycard is 30.06% and the next account is 22.9% I believe.

We also have an MBNA card that has a couple of grand on but it's 0% for 32 months so we're making the minimum on that for now and once all other debt is gone we are going to hammer into that one and transfer to another 0% one if we need to at the end of the term.

Mum4 I'll have a google in a while when the dcs are in bed, thanks grin

InTheDessert Sat 01-Oct-16 18:29:55

Sounds like you've got your plan then.
Pay off tumble drier.
Pay off Barclaycard
Pay off next
Pay off MBNA

Leaving yourself enough cash for Christmas and living.

Go get yourself debt free!!!!

JacquettaWoodville Sat 01-Oct-16 18:33:39

What will the interest rate be on the drier from November?

JacquettaWoodville Sat 01-Oct-16 18:36:13

You don't need to spend so much on Xmas presents just to have things to unwrap. If things will be better next year, how about "a trip to X in the summer" as the main present then you can pay for it when you go. Then little things like books and pens to unwrap (not sure of age of kids)

RavioliOnToast Sat 01-Oct-16 19:47:10

From a quick google I believe verys interest rate is 39.9% , not sure if that's applicable to our exact account though.

The promised holiday is a good idea actually. I might book up and out a deposit down for xmas.

specialsubject Sat 01-Oct-16 20:08:33

40% interest????? Well, better than a payday loan.

Please cut xmas right down. Nothing for adults, a tenner for kids. Cashback often means overpaying on the owt for nowt principle.

JacquettaWoodville Sat 01-Oct-16 20:11:53

I was thinking more like a day trip to a theme park than a holiday. Won't a holiday deposit be £200+ anyway?

Fleekorunique Sat 01-Oct-16 20:17:46

I would get another 0% interest credit card & pay off the balances from the 2 debts ( Next & Barclaycard) on it.

So you will be paying 0% interest on your monthly payments.

Fleekorunique Sat 01-Oct-16 20:19:51

Then you will be debt free by June. £200 a month repayment - 0% interest.

RavioliOnToast Sat 01-Oct-16 20:33:11

I don't think I'm able to balance transfer my next account. I tried with the mbna card and failed. It had to be a store card so I ordered one and it didn't have the right numbers for the balance transfer

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