Please help me sort my finances!!!! AIBU to withdraw money from private pension to pay off credit card.

I looked at withdrawing from a pension and it was a 47% charge so that was a no. My budget is all my expenses on an excel sheet, at the top all my incomings and then I know what I need. I have 2 current accounts, 1 for bills that I put my wages into to cover direct debits then another for spending which I transfer my leftover into and that’s what I use to live.

I've been where you are and it is doable but hard work. Speak to citizens advice for definite

also commit to putting every penny of your pay rise after tax towards the debt then to building an emergency fund

£300 rise after tax and NI is just over £200 a mont you will clear cc in ayear even without any money from elsewhere double that to £400 a month by selling stuff and generally not buying stuff and it will take ust over 6 months

Download the MSE budget planner. It is a spreadsheet that you enter all your income and expenses onto and it shows you have much money you need each month. You need to sit down with all your bank and card statements to see where your money is going.

Cut out all unnecessary items, only buy what you need. See if you can save any money on any bills or food shopping.

No luxuries, you may not buy these anyway, but that does include tv subs, coffee, lunches out, takeaways, expensive hobbies, nails, hair etc.

Assuming that the family member is not charging you interest, you need to clear the credit card first.

When the card is clear, cut it up. Live within your means

Are you less than full time?

Money Saving Expert.

All of this. But have you tried applying for a 0% (or at least cheaper than full rate) credit card? Have you missed payments? Use the MSE eligibility checker and see. Definitely worth applying.

Otherwise up your income and cut your expenses to the absolute bone. Can you do something like cleaning or babysitting?

What clothes horses problems said

Sounds like she has experience, with a username like that!

Is that from Christmas? I.e. the credit card?

Weigh up interest vs penalty for accessing the funds

I don’t think you can simply withdraw from a private pension so its moot?

Budgets are useless unless you know EXACTLY what you're spending. I would go through all expenditure over the last calendar year and categorise it all. You can't set a budget without doing this first. People always forget about the irregular spending (presents, new tyres, gutter repairs etc.) until they start doing this. This irregular spending can cost an extra few hundred a month without you realising. I would say priority is to get that credit card paid off as soon as you can as if you're paying interest, the debt will snowball. I wouldn't pay another penny into your ISA until you've paid off credit card debt, then what is owed to family member

first work out how much you need for what is often called "bare bones" budget,
rent, council tax, utilities, food and transport to work and insurance.and minimum payments on cc.
Hopefully this is below your combined income
you can try a couple of no spend months where you buy nothing extra to the above
no subscriptions no eating out no takeaways days out no new clothes etc, sell anything you no longer need or want via vinted ebay etc, depending on your work could either of you get a few extra hours work a shift one evening at a pub or similar you can probably pay down the £2500 cc quite quickly, then pay your family back, then build a small emergency fund then go back to paying into your private pension and ISA

You can withdraw from the help to buy or LISA.
If you’re spending on a credit card and also paying interest on a balance it might make sense.

Pay off the credit card first. To find the money for that: *temporarily stop saving into your LISA,
*stop/reduce all non essential/luxury spending (clothes, nails, hair, makeup, tv/gym subscriptions, coffee, eating out, takeaways, any and all impulse shopping, days out, non essential travel),
*reduce your spending on food (cook from scratch, don't buy any ready made meals or snacks, no alcohol, meal plan, eat less meat, don't waste anything, eat leftovers, have a few cheap meals like beans on toast or jacket potatos a week),
*sell your unwanted possessions on vinted/ebay

Once the credit card is paid off, pay off the family loan.

Once the family loan is paid off, save at least £1k as an emergency fund in an easy access high interest acount so that you don't need to rely on credit again for any future unexpected bills

Then only at that point do you start saving in your Lisa and enjoying the non essential wants/luxuries again. And alongside that increase your emergency fund to 3 to 6 months of your essential bills.

Personally I wouldnt " live off the credit card"

£200 is 100 per week which should be adequate if you get paid end of the month

Go through cupboards and freezer and check if you gave any points to use up on supermarket eg Nectar
Meal plan and work out fuel
Push haircuts/ socialising back
No coffees etc

Essentially most unexpected expenses are not that unexpected so once the debt is paid back build up a 3-6 month emergency fund

Its a bit cheeky to borrow off others when you have 28K

Firstly, do not panic. I was left with huge debts to pay alone after I left my Ex.

Go through your bank statement/credit card statements line by line. Mark them as essential/possible/luxury
Cancel subscriptions to all luxury items, including TV subs.
Then review the possibles.

See if you can get utilities cheaper by switching providers.

Go through food bills and cut out any luxury items. For me, this included meat, because that was more expensive than veg/pasta. Yes, I was very boring with food for a few years but baked potato's, pasta and rice is very cheap to live off. No alcohol or soft drinks as they quickly add up.

See how much you can put aside to pay off CC debt first. Speak to them and ask if they could freeze interest as you are struggling.

Budgets sound scary but they're not. You need to be honest about your spending. At one point I only paid in cash. It was a visual reminder of how much I had so it made me think twice for all expenditure, even chewing gum!!

I would not touch the ISA and as others have stated, there may be a pension restriction.

I am now debt free, so it takes time but is possible. Work together and reduce the higher interest items first. I would suggest consolidation but don't think it would help in this instance.

You definitely need a budget and a clear idea of all your expenses. There's a board on here called money matters which is full of helpful people, so asking there for advice is also a good idea.

Do you jointly share finances with your DH/DP?
So the savings and debts listed are joint?

If so, what is your joint monthly income after tax?

Just trying to work out if this is a two week problem or a longer term issue.

Money Saving Expert is a good place to start. I’ve heard You Need A Budget is helpful but I’m not familiar with it.

That debt sounds quite manageable with your pay rise, get the credit card paid off as quickly as possible but don’t start breaking Lifetime ISAs is you really don’t have to.

I haven’t actually done it myself, but I see lots of praise for the Rebel Finance school. I should make time to do the course when you’ve got this debt issue sorted.

As others have said - You can only access 25% of your pension, tax free when you are 10yrs below retirement age, so 57yrs at the moment, but that is almost certain to rise higher.
I think there are separate rules if you are diagnosed with a terminal illness.

I would stop the ISA payments, and get the debt sorted. This is perhaps the nasty shock you needed before you got yourself in deeper water - it’s not unusual for people to own 10’s of thousands before they realise they’re in trouble. Good luck!

You need to attack this on two fronts:

• reduce what you're spending
• pay off your existing debts

I'd recommend using the Money Saving Expert Budget Planner to see where your money is going:
https://www.moneysavingexpert.com/banking/budget-planning/
You need to list every single thing that you buy/spend money on - check all standing orders and direct debits.
Make sure you include EVERYTHING, holidays etc. that you don't spend on every month.

Then move onto the MSE Money Makeover to see if there are any suggestions there that will help you save money so that you can start reducing your debt:
https://www.moneysavingexpert.com/family/money-help/

You've got to be honest with yourselves and give up (even temporarily) things that cost money and AREN'T essential.

Good luck!

First of all, don't be embarrassed, it's easily done, loads of people do it. I was one of them years ago.

Secondly, it's not insurmountable at all and you're panicking so try to stop that, it's fixable.

If I've understood correctly, the issue is that you don't have any cash right now and some debt, is that right?

You have £28k in an ISA
£200 in your current account
Owe £2.5k on a card
Owe £2.5k to a family member

Focus on the first thing, which is when will you get paid and how much will it be? Can you afford to eat between now and then?

Then focus on your income and your outgoings and the difference.

So income £xxx

Then list all your outgoings, include rent, electricity, gas, water, council tax, car payments, petrol, transport, insurance, mobile phone, Netflix, subscriptions, gym membership, card payments. You should be able to see all your direct debits in your bank account.

What is the difference? And what is the amount you're paying on the credit card?
What are the terms of repayment to the family member?

You can stop pension payments but you can’t just take it out at any age. I’d keep the payments going. Can one of you get a second job? Write up a budget and stick with it.

A pension isn’t a saving account. Just stop directing money to the isa and use it to pay the debts instead surely?