HELP!! In a complete financial mess!

[CustardCreammm]

DH and I have been hit with a few unexpected expenses this month and I now have no idea how to make ends meet until the end of the month. Can anyone offer some suggestions?

I’ve listed our account balances for current accounts and savings accounts below:

joint current account - £3400
DH current account - £100
my current account £100
lifetime isa - £22000
Stocks and shares isa - £1000
my personal pension - £5000

Debts below:

credit card - £6100
we have also borrowed some cash from the kids accounts (money that we previously put in and will top back up - £1300

we are also owed £1000 as a rebate for something, but we won’t get that until July.

The problem is, we usually clear the full credit card balance each month (which will mean we won’t pay interest), so in a few days time we should be paying £3927 towards the credit card, but that is more than what we have in our current account.

i am so stressed about this and can’t figure out what to do. Should I just reduce the payment on the credit card and incur the high interest? Should I wipe the money from my pension account?

this is causing me a lot of stress so I’d be very appreciative of any guidance.

thanks :)

How much is the interest on the credit card, and how long would it take you to pay it off in smaller chunks?

Reduce the cc payment to whatever you can afford and make a plan to pay the rest asap. Don’t raid the pension or the lifetime isa - if anything go for the stocks and shares isa.

Do not touch your personal pension, that should be the last thing to go.

Can you get a 0% transfer credit card to enable you to pay it off across a few months?

The interest is about 29% I think. My husband had some trouble accessing his current account whilst working overseas for a long period. This meant we got into a loop of spending on the credit card and clearing the balance once a month. 🤦🏻‍♀️

Just pay what you can afford this month, tighten your belts next month and pay off as big a chunk as you can then, and repeat until the balance is gone.

As a start can you take the money out of your S&S isa? When I've had to do this it normally comes through in about a week.

I can take the money out of the stocks & shares isa if need be. But won’t be the best time to do it as I’ll lose some money as some of the stock prices are down since when I bought them. But maybe that’s not too important in my situation.

We are overseas for the next few months so opening another account I don’t think will work because we won’t receive the cards etc for a few months.

What is your monthly income?

Joint income this month will be around £4000 I expect. DH’s varies monthly.

I mean, I wouldn't call this a compete financial mess,

clear half the card this month and half next month - then there sonly 1 month of interest on half the balance. Monthly interest is around 2.4% if annual is 29.9.

Don’t touch the isas of pensions.

• talk to bank and request a short term overdraft facility so you have a safety buffer
• Reduce credit card payment - that scary number is ANNUAL % interest not monthly

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Pay what you can afford this month, and switch to a zero percent credit card

Unless I'm missing something, you have enough to cover your debts. That is not "a complete financial mess" at all. It's not ideal perhaps, but it's certainly not the end of the world, or worth really losing sleep over. Take a look at how much it would cost you to spread the CC over a couple of months instead of right away, and maybe do that. Or if it'd cost you a lot of interest, take it from savings and pay it back when you can. Honestly, you're fine.

You could look at a balance transfer to an alternating credit card. This is a long way from a crisis OP, just breathe m, shuffle the credit balances and whatever you do don’t touch the ISAs!!!!

First things first, check you can change your credit card payment. If it’s very close to the payment date you may not be able to change it.

If you can, then change it to a lower amount you can afford.

If you can’t then you’ll need to extend an overdraft with your bank, or transfer funds from your ISA.

If you can't apply for a 0% interest credit card to switch the outstanding balance to then just pay off as much as you can afford this month to minimise the interest payment and clear it as soon as you have more funds available.

You can't take money out of your pension of lifetime ISA either at all or incurring penalties, so forget that idea.

Pay off what you can and either take the interest hit on the rest or apply for a 0% card to transfer the balance to.

However, you probably also need to review your budget and spending so you don't get into the same position again.

Have a look at:

https://www.moneysavingexpert.com/family/money-help/

Also, did your DH work overseas incur expenses that he can claim from his employer and has he done this?

What were the 'unexpected expenses'? A lot of the times these are expenses that you should expect to happen sooner or later (car repairs, replacement white goods, vet bills if you have pets) and you should account for them in your budget and put money aside to pay for them when they arise.

Can you ask your bank how much a temporary overdraft might be, that'll probably work out at a significantly lower interest rate than the credit card, as the credit card will charge the interest on the whole of the £3927 owing for this month's payment if you cannot pay the whole lot off - whereas you may only want to borrow £1k for say 1 month in order to pay off, which should be less than £30 in interest for 1 month.

Then compare to what you'd lose on cashing in the stocks and shares ISA.

Another way is to ask the credit card company of you can move the payment date to after the next wage payment date, to buy you a bit more time to pay off, however you can usually only move the payment date once

If the CC payment is due out in a day or 2 it might be too late to change it unfortunately.
Ideally you would clear the CC as soon as possible but not if it causes financial hardship, maybe try and pay double the minimum or similar

Definitely don’t take funds from the pension accounts. Pay the credit card less this month, if it’s on Direct Debit then speak to them about it.

As above ask for an overdraft, it will be pretty low interest and use that to pay off the CCs, you could both get an overdraft facility on your current accounts. I have a £2,000 overdraft limit, I've never used it, but nice to know if I have a cash flow blip it is there. Or ask the bank for a short term loan to tide you over would also be at a much lower rate than CCs. Or pay as much as you can off the CCs then another £1,000 when that money comes through and get back on top of it over a few months. Cut expenditure as much as possible until the debts clear.

Make sure you pay the minimum CC payments so you don't get fees on top.

You might be able to set up an overdraft limit simply online.