my new income - does this look realistic??

[lisalanes]

Hi,

I recently went back to work full-time and also picked up a fairly significant promotion. I got paid a few days ago and picked up my new salary. I think that this is a real opportunity for me to get more financially secure. I am a single parent of 2 kids aged 4 and 6. I have a mortgage and also some credit card debt/BNPL debt. I want to prioritise this. It's nothing extreme but I want to get rid of it, along with building up some more significant savings. I am very fortunate to have no more child care costs ( thanks grandparents!)

The majority of my bills have already come out this month and I am currently left with £2123. I get paid again on 26th Nov.

I have listed all of the things that I will be paying out of the remaining £2123. Some of these are optional, such as the credit card overpayments and some are things that I have to pay.

£300 - this is generally what I spend if I shop at Aldi/Lidl and meal plan
£250 - overpayment on Credit card 1. I have already paid the minimum so this is optional
£400 overpayment on Credit card 2. I have already paid the minimum so this is optional
£56 - pet costs
£110 - Klarna/Clearpay. I am no longer using these apps so this will be paid off very quickly
£120 - money that I owe my dad, Just a one-off and not a regular payment
£74 - Sky TV. This is for my phone sky TV, internet and my iPad. Locked in for another year
£40 - drink this Friday as I am out with friends. Nothing fancy
£20 - pumpkin farm tomorrow with kids ( taking sandwiches)
£50 - contributing to mum's bday meal in a couple of weeks

So this leaves me with £703. I accept that the credit card overpayments are a choice and that I could potentially have an additional £650, however I think that I do need to make that a priority as this will see them all paid off within 6 months.

Does this look doable? All of my main bills have already been paid out so the list above is accurate.

Does what look doable?
That you have £700 to last for the month if November?
That really depends on what it’s going on. You don’t list outgoings.

Hi,

All of my other regular bills/outgoings have already been paid out. The £2123 is what is in my account this morning.

What are the interest rates on the credit cards and the BNPL debts?

Do you have a financial buffer in case something breaks? And what about saving for known costs later, e.g. Christmas etc.?

She's listed nothing but FGS.

£700 after all your outgoings including overpayment of debts begs the question, why are you in debt as if you take away the debt repayment of nearly 1k you have a urplus of nearly 2k a month

So the £700 is just on discretionary spending? That is more than fine.
If you don't already have one I would suggest starting an emergency fund so that you don't have to rely on credit cards/loans if the washing machine breaks/your car fails its MOT etc. Plus perhaps a separate fund for foreseeable future expenses such as birthdays and Christmas, maybe a holiday etc.

I'd personally want to pay off the debt more quickly so I would throw even more money at it, and I suggest it would be more efficient to do this by paying off the debt with highest interest first, rather than scattering extra payments round all of it, as per your plan..

I'm a debt counsellor. My advice is always to pay off the small ones if you can when you have extra money so clear that Klana (or as much as you can) of of the remaining £703 but set aside £200 at least towards Christmas expenses but don't touch it - in fact i personally would suggest based on time of year, £300 off Klana, £200 for Christmas and £200 into an emergency fund to cover the sort of things that you can't predict from extra school school replacement to car repairs. The huge advantage of paying off smaller debts is psychological, knowing you only owe on two cards by January for instance will be a boost, and if one is better to prioritise over the other rate wise over pay that, if not the smaller one can really help you.

Pay off the most expensive debt first - the highest rate of interest. Do one, then the next.

congrats on your promotion!

both credit cards are 0% so I want to clear the balance before that ends. The BNPL is interest free too but you have to pay it back in 3 months.

I have a small amount of savings £2000 but I really want to build on that.

The sensible move is usually to pay off most expensive debt but there’s also a bit of a psychological game to play here too. You may prefer to have fewer debts outstanding so you can snowball the payments on those into paying off your larger debts. So if there’s one you can clear in full this month, you could do that, and next month add whatever you would have paid off that debt onto one of the others. It can help you to feel you’re putting a solid dent in something rather than adding a little to lots of buckets.

Answered in the 1st line of the OP.

Hardly. The only specific bill she mentions is £300 for monthly food and debts.
It’s totally pointless to ash “is £700 enough?” without what it’s for?
£50 a week petrol?
£100 pw commuting costs?
Kids clothes?
Half term activities?

Clearly the £700 must need to still go towards things or the OP wouldn’t be asking if it was enough.

Travel costs? Have you saved a few hundred each month to cover Christmas, summer holiday, new washing machine, roof repair, one-off annual costs like car tax?

I would put it aside for now and anticipate that you will need to chip into it for day to day living expenses - it's amazing how easily you can do another £100 on bits and pieces.

Your income is healthy (congrats on the promotion!) and it is ok to give yourself a little wiggle room to enjoy yourself with it rather than attacking the debts in a punitive way.

At the end of the month, when you're sure you won't need the ready cash, pay off some of the debts, I'd go for the BNPL one myself as those always feel like fiddly little debts to me!

Next month I would take the £700 and put it aside as a kind of emergency fund. It would pay for a plumber, new washing machine, whatever an emergency looks like for you. Set yourself up so you can leave your savings be.

I don't agree that it's pointless having savings if you have debt - quite the opposite, I think it's essential to have ready cash so you don't have to rely on credit for emergencies.

Given all the debt is interest free I’d put the £650 over payment away in a savings account until end nov rather than making it today…your list is missing transport, hairdresser, dentist, present if kids get invited to a party etc etc I’d try and get a feel for what’s doable first.

So you have no additional bills whatsoever between now and the 26th?
What are you counting as all bills coming out?
No regular spending like petrol? Train fair? How do you get to work? Do you never spend money while at work?
Childcare for half term is covered?
£70pw for food and household items for 3 seems really low particularly if your including a minimum of 5 lunches a week for yourself. I would be surprised if you weren’t doing significant top up shops during the month, particularly with time off school.
You need to be realistic about your actual expenditure in order to know if X amount is enough.
It’s easy to think a certain amount sounds like a lot and before you know it commuting for 4 weeks chips into it, you need top up shops, one or two small bills and before you know it when you split the remaining amount by the 4 weeks there isn’t that much money.
Like I said, you say “most” of your bills have come out but it really depends on specifics.

I couldn't quite follow the numbers OP, but what I recommend is a spreadsheet. Mine has months for 2 years running down the left, across the top I first list my in-goings (auto sum those), then all my outgoings (summarised, I get granular on another sheet then auto sum that number onto the front page) this then gives you a view for 2 years.

You can map out how quickly you can pay off debt, how much you can save, work out how much money you have over a period of time, getting really granular to cover birthdays, Christmas, holidays, clothes etc.

Not quite following what your question is op.

Does £700 disposable after all your bills and overpayments look doable?

Well, yes. Why wouldn't it be?

Looks good though me. Take away the optional credit card payments ( although I agree that you need to do that) and you have about £1400 to play with. That must be more than average folk have.