Debt free

[SeaSidePebbles]

I’m tired of having debt, even if it’s manageable. I’ve had so many years of living extremely frugally and denying myself any enjoyment, I am tired of it.
4 years ago, due to buying a house, I had to take on debt. I had, at the time, about £18000 of debt. I am left with £3100 on a 0% card till dec 2020, but I am fed up with it.
I have some savings, I could just pay it off, but it wouldn’t make financial sense. I don’t want to come to the end of the 0% period and go: I’ll just transfer the balance onto a new card, keep my savings intact and just keep on chipping at this one.
Minimum repayment is £32.50. I pay £150. I could do with it not hanging over my head.
I need a new way of looking at it. And maybe some support from fellow debt free wannabes.
Written down it looks like I have it easy, it’s not massive and I can afford to pay it. But I have been taking on extra shifts, doing 60 hours weeks, and have been for years! My debt every month used to be just under £800. The one but last credit card payment came out in September just gone. I suppose it’s just this last bit I am mentally struggling with.

Well done on getting this far. If you go on the debt forums on Money Saving Expert there is a lot of advice about dealing with debt .

Going from 18,000 to 3,000 in 4 years is great! Keep going it feels so good not to have any debt (apart from a mortgage). It will be worth it

For 12 months double up the payment, set up a standing order & let it run. Treat it as a bill that you had when you got your house, say part of the mortgage & soon it will be gone.

great work! you will get there!

come and join us on www.mumsnet.com/Talk/legal_money_matters/3564254-a-support-thread-for-people-paying-off-debt-2 - a bunch of us are finding that regularly updating the thread with our progress is helpful and motivating.

Just pay it off with your savings. The peace of mind will be worth it. Yes it's on 0% but I bet your savings are not earning much more than that.
Then all your money can go to savings or spend as you like.

Correct me if I'm wrong but I don't think there's any such thing as a true 0% balance transfer any more. They all have an initial % fee that works out at more than you will get in interest on cash savings. If you can afford to clear the debt when this latest transfer comes to its end then I would do so.

Well done, what a great achievement. If you've built up savings that suggests that you now have spare money and don't need to be so strict with yourself - you can afford to not live so frugally and allow some enjoyment into your life.

Why not have a look at your budget and work out an 'allowed' fun fund after regular bills and savings for emergencies and annual/irregular expenses, transfer it to a separate account each month and if you see something you want to have or do, and you have money in the fun money account you can have it .

Probably worth remembering the moneysavingexpert mantra about thinking about whether you really want it, can you afford it, will you use it and have you checked for the best price, but as it sounds like the debt was due to the house purchase rather than simple overspending, you probably don't have to worry about getting into debt again.

As far as paying off your debt with your savings, your savings will be earning 1.5% at most and £3k for 1 year at that rate will earn you £45 in interest.

Only you can decide whether it's worth 'wasting' £45 in interest by paying off your debt now instead of letting it run it's course until this time next year. And to me, it sounds like it will be hugely worth it for you to be debt free now, rather than later, even if it will cost you money. So do it and be debt free .

TooTrue According to MSE there are fee free interest free balance transfers available, not that it sounds like the OP needs another one as she only has one card left that it sounds like she can pay off before the current offer runs out.

I am left with £3100 on a 0% card till dec 2020
Just pay it off with your savings. It goes against maths but you are not factoring in risk. If you lost your job tomorrow, you still have this debt and have to still pay it off before the 0% deal ends otherwise interest kicks in and depending on the deal interest maybe back dated.

I had this issue when I paid off my car loan, which was on 0% finance. I had the money in my savings and paying off several thousand instead of waiting for the end of the payment term seemed counter intuitive. However you will feel so much better not having debt. That feeling is worth the loss of a small amount of interest that you may have got on the savings. It will give you new purpose to your money, you will start investing it.

Thank you all

I guess my logic is: I have £5000 in savings, should anything go wrong, I don’t have to worry about throwing money at the issue, it’s there, I can access them penalty free.
Equally, as you say, my peace of mind is not worth £45, and I could lose my job, whatever I save is a saving, not going towards debt already accrued etc.

I suppose the issue is more psychological, I had nothing growing up, nothing during a 20 years abusive marriage (I’ve always worked, from 18 yo), and I’ve worked really really hard and long hours, sometimes 2-3 jobs for every penny. I just need to learn to look after myself a bit more.
Thank you for the link to the debt free thread, I hadn’t spotted it!

Should anything go wrong - how much money in reality do you need to cover things? Say if three things went wrong, tyre on car, washing machine broke, plumbing issue... £1500 would probably cover it, £2000 you may feel comfortable with.

You are so nearly debt free, you can see the light at the end of the tunnel. Time to race towards it if you can. Do what you feel comfortable doing, personal finance is very personal. You will get there very soon whatever you decide to do.

Once you are consumer debt free, build your emergency fund to 6 months of expenses. Then you will have that secure feeling of having money for lots of emergencies happening, even having a short period of unemployment.

Another one here advising you to use your savings to pay your cc off now.
Once you have done that, increase your monthly savings plan by the amount used to pay off the cc. Watching your savings grow is far more satisfying than watching a debt reduce. (As long as your debt is cleared first!)

Well done you!

Definitely pay the debt off with savings! Be debt free for Christmas, that would be great.

Pay the card off, you'll have £1,900 left then in 6 months time you'll have £2,800 because £150 a month will be going to your savings instead. In a years time, you'll have £3,700... look at it that way

Yes. Get rid of the debt. Increase your savings. Pay yourself. How wonderful.

And really well done.

Thank you all very very much!!!
You are all right, of course. Your support and taking the time to advise me means a lot.

£2700 out of the £5000 are locked in a 5% interest account for another few months. I can access them if I close the account and lose the interest (about £90)

I did pay £2100 into the credit card, leaving me with £1000. I can clear the £1000 this December, it would make for a frugal January, but I can manage, I managed on much less money before. I kept £200 in the pot, for now, because I have left myself just £150 till December payday, and DD hasn’t got her Christmas presents yet. The cupboards are full, so is the freezer, I paid for all the parties, I have some m&s vouchers for Christmas food (got them over the year to pay for DD’s school uniform bits, forgot about them and paid in cash for them. Doh). We should be fine.
I can’t celebrate just yet, I’ll wait till the final grand is paid and the account is closed.

God, the end of the road is in sight. It’s been so many years of just paying off debt. I like the idea of setting up a fun fund, I’ll do that after my 6 months emergency fund is there.

It’s only in the last few months that I allowed myself to live a little. I’m getting better at it :)
Thank you all, again

Just knowing you are debt free is a joyful feeling, even if you have to build your savings up again.
If an emergency crops up, it crops up and you might have to use credit again if the savings aren't there but chances are that you will be able to watch your savings grow.

sugarbear, that’s what scares me, emergencies.
This thread has opened one of my old wounds, one I never dealt with. I’m not sure how to write it down without it turning into a total sob story.

I am extremely driven and motivated and I proved myself I can get out of problems (not of my own making). But that really hardened me. I don’t want to be one of those old ladies who watches every penny and wouldn’t part with a pound without leaving claw marks in the coin.
I guess I am financially savvy and disciplined due to trauma/financial abuse. It’s like an extreme sport with me, I really do leave very very little for myself to live on.
Food for thought.

This is a very interesting thread. I'm in almost exactly the same position as you and am finding it hard to find a balance financially after years of financial abuse. My ex still plays games with my maintenance and it's left me with a horror of money. I'm saving as much as I can (and could probably tighten up a bit more) but my quality of life would definitely decline. And it was horrible for years financially, and just about every other way. Anyway- you're doing a great job and have inspired me to move some things around too. Well done!

best thing i did was in may this year i went to citizens advice and sought help regarding my debt i then was advised a debt relief order was my best option £90 i paid and after 12 months im officially debt free. you have to be left with under £50 to live on i think it is but it worth an ask

Well done your doing great.

Now it's time to get the job finished and then are you free. Suggest looking up Dave Ramsey on You tube for inspiration.