Which should be paid of first/what percentage to whome?

[starsintheireyes]

Need some help as very rubbish at maths, basically making it my aim to try and get out of debt this yr but not sure how to go about it.

I owe £1600 halifax overdraft- relative pays in £60 a month but I get charged £1 a day to use it so half of what relative pays in every month gets swallowed in fees. I pay nothing into this at present.

I owe £1100 on a credit card with 19% apr, I pay £40 off this a month currently

I owe £250 on a different credit card, apr is 15% and I pay £20 off this a month.

From now on due to giving up the cigs I will have extra £50pw/200pm to go towards debts, but what percentage do I pay off what or do I try and tackle one at a time? help!

[catsareevil]

Could you try to negotiate with the comanies re suspending the credit cards or transferring the balance - if you could get a 0% balance transfer more money would go to paying off the debt?

[Fenouille]

Money saving expert website has some good advice and tools which should help you work out where to start. Try www.moneysavingexpert.com/cards/minimum-repayments-credit-card#calc to start with, it's a calculator that let's you see how long it'll take you to pay off credit cards with coherent monthly payments.

Might be worth seeing if you can negotiate something with Halifax a it sounds like it's been a long term arrangement.

[Fenouille]

Your 19% credit card is going to take 3 years to pay off at £40/month and your 15% card just over a year, according to the calculator. What's the receive APR on the loan (it should be on your account details)?

[magentadreamer]

The Halifax Overdraft is costing you £30 a month - I'm assuming there is no other interest on this account? Will your relative still be paying in £60 a month? I'm also assuming that the £1 a day for the overdraft is a fixed amount till it's repaid in full?

I would hit the Overdraft first as this is costing you £365 a year. I would throw all available debt repayment money at it - pay only the min for your other cards. When this is paid throw all money at the 19% card, then do the same for the 15% card

[Warlock]

I had a similar situation a good few years ago and got a consolidation loan to clear them all and give me some extra for a reserve. Worst thing I ever did

I would go for them one at a time and start with the highest interest one first.

Well done on stopping smoking too

Give yourself a £25 treat at the start of Feb if you have stuck to it

[ivykaty44]

I owe £1600 halifax overdraft- relative pays in £60 a month but I get charged £1 a day to use it so half of what relative pays in every month gets swallowed in fees. I pay nothing into this at present.

Tackle your biggest debt first and starting paying the 60 pounds per month from this debt as that will make 120 per month in total atm

I owe £1100 on a credit card with 19% apr, I pay £40 off this a month currently - change this to a 0% credit card for as long as possible and cut up the card when it arrives

I owe £250 on a different credit card, apr is 15% and I pay £20 off this a month. _ put this on the above card.

See if you can add another 80 per month to pay of the Halifax overdraft.

can you take a second job, up your income in some way, sell stuff on ebay, carboot sale to put into this account to shift the debt? All of those things would be good

[CogitoErgoSometimes]

Work out which debt is costing you the biggest percentage APR, put as much as you can into that one each month and pay the minimum on the others. When you've paid off the highest APR, pay off the next highest etc. Some call it 'snowballing'

If you're really struggling with debt and can't pay it back, talk to CAB, CCCS, National Debtline or other free debt advice service

Whatever else you do from now on, make sure you know exactly what you've got coming in and what you spend. Keep a spreadsheet, download MS Money (free) or write it in a notebook but be 100% up to speed with your money. Cut up any credit cards and work with cash only so that you don't increase your debt rather than pay it back. Ex-smokers have a high failure rate.

[starsintheireyes]

Thanks for all the replies. I can manage the debt, just about and I know exactly what comes in and out but the debt is from when me and exp were together(split in jan10) but its all in my name. I havent got into any more since we split other than a small catologue balance which is manageble.

I am determined to try and clear the lot this yr, exp has swiftly moved on, is getting married(!) etc and I still feel like im in a rut and havent moved forward, so I want to feel Im going forward and lifes improving. Also all this benefit reform stuff is scaring the crap outta me, I want to be debt free and hopefully with a small savings pot behind me before I go bk to work.

I will try getting a 0% credit card, not sure weather I will get it so if I cant the best thing is to reduce all payments to minimum and throw the money I wouldve paid off them+the £200pm onto the halifax overdraft until thats cleared, then the same with the 1100 credit card?

[starsintheireyes]

katy- yes im going to be putting ebay/carboot money towards this too, although havent got much of any value left(did about 4 cboots last year just to raise enough for 2x school uniforms!)

[catsareevil]

Even as a worst case scenario could you transfer the 19% balance to the 15% card?

[dontletthebellsend]

The overdraft is the most expensive as it cost £31 a month and is constant whereas the CC (£17.41 and £3.13 interest p/m) get cheaper the more you pay off.

You could put the extra £200 plus the relatives £60 into a savings account for the next 6 months then pay off the whole overdraft, it will make no difference to the charges but you wouldn't get much interest either as interest rates on savings are so poor. The OD is your biggest cost so I would work on that.

You might even be better off getting cash at 15% on your credit card (if that is the rate for cash withdrawals) and paying off your entire overdraft and paying the relatives £60 plus your extra £200 off that card.

you can calculate repayments here

[dontletthebellsend]

The ideal thing to do would be to put the OD on a card and transfer all cards to a 0%.

Another option would be to pay off cards with the OD if the charge were to remain at £1 a day regardless and pay all £320 into a savings account for 9 months then pay off the whole OD in one go. This would cost around £275 in charges which is less than the CC interest rates plus the OD charges.

A lot depends on what you are allowed wrt cash withdrawals on your CCs increasing your OD further and getting a 0 or low interest card to transfer the balances to.

[starsintheireyes]

I cant really alter the balances on the cc's one has a 1200 limit, the other 350 and the overdraft can only go to 1750. I will look into the possibility of 0% balance transfer but otherwise I think Ill drop to minimum payments for the cc's and put all effort into clearing the OD first.

[CogitoErgoSometimes]

I think paying off the OD as fast as possible and minimum on the CCs is your best plan for now. 0% balance transfer cards are good but usually charge an initial fee for switching... if you look at that option, factor the cost in.

You now need work out exactly how much you can pay out each month and you have to budget the rest of your spending carefully, cutting unnecessary costs wherever you can. Some tips

• Print out a list of all your DD and Standing Order payments - utilities, insurance, etc. Then use today's bank holiday to sit down with comparison sites and see if you can shave some money of each by switching supplier or going for lower tariffs. If you can save £5 here and £10 there each month on each bill, it can quickly mount up.
  
• Looking at the same list of automatic payments, be brutally honest and decide if the expenses are essential or not. If not, can you dispense with them - even if it's just for a few months?
  
• Food is usually a big chunk of household budgets. Can you plan better, eat more simply, sacrifice treats?
  
• Fuel is another expensive item so anything you can do to use less helps. Can you benefit from free insulation offers? Is your fuel provider offering any fuel-saving gadgets? Turn down the thermostat? Decommission the tumble-dryer?
  
• Finally... selling. Another nice job for a bank holiday. Take a hard look at your posessions and see if any could generate some cash if sold on places like E-Bay.
  

Good luck.

[starsintheireyes]

cogito- Yep Ill do that. Ive gone through dd's but theres nothing that can be stopped or reduced as theyre all essential bills mainly. I managed to get rid of a mobile bolt on, which I didnt realise i could opt out of, so thats cancelled so £6pm saved! The only thing I could dispose of for a while is internet/line rental/home phone, which costs me £30-40pm so Im going to ring up and find out when the contract ends and perhaps consider living without it for 6 months. done the fuel comparison thing but they all seem to price rise etc in line with each other so not sure if its worth it for a suggested saving of £80a yr.
food-Im lucky that the children have free school meals, so only have a snack tea after school-this saves me loads in term time and I can bring the shopping in for about £40pw and that incl cat food and nappies (Ive budgeted 60ish a week so any leftovers can go in the debts jar)
I meal plan so thats ok, my biggest thing though is prob going shopping and adding stuff which isnt on the list, may try online shopping and see if that helps.
fuel-The heating is not on a great deal, weve all several duvets and thick pjs so try not to put it on till its -degrees. Im trying not to use the tumble, most clothes im hanging up round the house and only tumbling sheets and towels.

any other suggestions welcome

[ByTheWay1]

Please - put SOME of the extra away so that you have an emergency fund....

do not touch it for day to day, just an emergency.

Then pay off all you can from OD first.

oh and YES the fuel change IS worth it for £80 a year.... it is money for nothing ... take it.

[CogitoErgoSometimes]

That's great. If you save £6/month on the mobile and £6/month switching utility provider and if you can live without the phone for a few months your £200/month spare becomes over £250/month and the OD etc gets paid off 2 months earlier than it did originally. Keep paying £250/month and the CC bill will be gone after 5 months. Potentially debt-free by December 2012 sounds like a good target to aim for... maybe Jan/Feb 2013 if we allow for one or two surprise expenses. Once you've got into the habit of having that £200+ spare each month it's not so difficult, once the debts are settled, to convert that to a savings plan and build up a buffer for the future.

If you're on a low income, are you claiming all the state help you can? The Turn2Us Benefits Calculator is worth running.

[ivykaty44]

internet/line rental/home phone

I got rid of my home phone and line rental - saves 20 quid per month
got rid of internet with phone line 10 quid saving

got rid of the tv as aireal broke - saves 12 quid per month

watch old videos or dvd's on old monologue tv and have internet with cable so 20 per month cost

so saves 22 quid per month

I use skype for phoning as it is free to call others on skype and you can put a few pounds on to make other landline calls - but no line charge

[OhdearNigel]

Balance transfer your credit cards onto a 0% card and make the minimum payment. Throw all your resources at getting shot of that overdraft.

[OhdearNigel]

Although I would be tempted to get rid of that £250 first - you can do it very quickly and it will make you feel a lot better to only have two debts to manage

[MrsHoarder]

You want to either pay off your overdraft or the 19% credit card with everything you can first (ie drop the others to minimum payments), then the next expensive and so on.

Important point though: if you still have the ability to use the OD/CC then you do not need a rainy day fund. It will be a brilliant plan to get one once you have paid off all your debts, but for now it is probably too expensive to keep. So pay the debts off one by one and then as soon as they are gone, get a savings account and start transferring the money you had been using for your debts in each month.