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Managing finances/ reducing debt

muvva

muvva

Well-Known Member
To be frank, I’m shit at managing my money, I always have been. I have a reasonable salary and should have enough each month but I’m constantly juggling and have more debt than I’m comfortable with. I’d like to manage better but I don’t know where to start. Which debts should I prioritise, should I start saving a bit each month?
I work full time so extra hours isn’t really do-able. How do I get a bit more savvy financially?
 
Prioritise your most expensive debts (the highest interest rates, probably credit cards).

It's always a good idea to have some savings for emergencies. If you can, try to build up around 3-6 months worth of savings, even if you're still paying off debts.

The best place to start off being financially savvy is just getting an idea of your incomings and outgoings. Then you'll have a proper idea of what you get each month, where it's going and what you have left over.

Don't forget to pay in to a pension as well, if you have one at work it's probably best to stay in it.

OK just read Puddy_Tat 's link and it basically says exactly the same thing but more helpfully than I have I'm sure 😅
 
I earn ok & am no way in a position to build up 3-6 months worth of savings.

I would look at outgoings see what they are, get rid of any you can do without -a little fiver here & there add up.

Get any credit cards on interest free if you can & have them then set a budget & stick to it. I did this years back when I saved for a deposit so I used cash only & set a weekly budget so what I had in my purse I could spend which meant I had to make some this or that decisions especially if say I had a meal out the next week & I needed to keep some over. To do in a cashless society I would have an account with the same amount of money transferred for that week/month - & thats all you spend. Basically you set a budget & follow up. It can get addictive!
 
Pay off high interest debt
Protect your credit rating (don’t miss payments)
Look at interest free balance transfers

Remember to keep an emergency pot of cash topped up

Go through you direct debits and ruthlessly cull any non essentials and any bullshit Apple fees/recurring app fees

Occassionally go hard on not spending. A week of spending fook all and eating beans on toast and porridge every day. Plonk savings in a separate pot
 
I have gone from several thousand pounds of student loan debt and about £1500 pounds of credit card debt about ten years ago to under £300 on a credit card now. I did it by 0% balance transferring as much of the credit card debt as possible to a new card, paying the minimum payment on that one every month and then doggedly paying off the one that was still charging interest at a bit more than the minimum payment. So if the minimum payment was £35 I would pay £50 or £100 if I was having a flush month. Every time the 0% rate runs out you balance transfer to a new card and kill the old one. As your credit rating gets better (because you're making payments on time every month by direct debit) the new cards offer you a higher balance transfer amount and then you can move more from the interest-charging one across and then the proportion of your payments that are being swallowed by interest starts to improve. I had an old style student loan where they set the repayment amount and just took it by direct debit so that took care of itself eventually although I did fucking resent paying £118 a month out of an income composed of a part-time job, child tax credits and housing benefit. I also didn't go on holidays, scrapped my car and didn't replace it and lived pretty frugally for a few years but the relief of the debt being nearly gone is now entirely worth all that.

Edit to add, I've also got an ISA now that I kick-started by selling a bike and have been putting £100 a month into and that has just under £2k in it now so I'm financially better set up than I have been in years. I mean it's still pitiful in the greater scheme of things but it's a much more stable kind of pitiful :D
 
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I did the balance transfer thing too. Interest free purchase cards are widely available too and importantly available very quickly (sometimes they'll give you the number before you even get the plastic) so big purchases get done on them and then moved to another card when the deal runs out. You need to remember when the bloody things are running out but it's a good way of getting everything in one place. I'm still about 3000 in debt but there's no interest being charged on it.
 
muvva said:
To be frank, I’m shit at managing my money, I always have been. I have a reasonable salary and should have enough each month but I’m constantly juggling and have more debt than I’m comfortable with. I’d like to manage better but I don’t know where to start. Which debts should I prioritise, should I start saving a bit each month?
I work full time so extra hours isn’t really do-able. How do I get a bit more savvy financially?
Click to expand...

There's little to be gained saving if you are in debt as you'll pay way more in interest on the debt then you'll get on savings. Assuming the debt is on credit card or overdraft you can use the unused portion of it as as shit hits the fan fund. Not ideal, but cheaper.

Maybe look at setting up another bank account with someone like Starling. You can put money in pots, for example all my money for bills goes out as soon as I'm paid so I never feel it's mine. Plus if you've another account with a big overdraft, then seeing a small positive balance which is yours to spend can be way better as you treat the big overdraft like another loan to be paid off. You can also get £170-£200 for switching current accounts, doesn't even have to be the one your salary goes into, provided a few direct debits come out of it.

As others have said take advantage of credit card offers with 0% interest to transfer debt to, but once you get one, do not spend on it!
 
muvva said:
To be frank, I’m shit at managing my money, I always have been. I have a reasonable salary and should have enough each month but I’m constantly juggling and have more debt than I’m comfortable with. I’d like to manage better but I don’t know where to start. Which debts should I prioritise, should I start saving a bit each month?
I work full time so extra hours isn’t really do-able. How do I get a bit more savvy financially?
Click to expand...
It is pretty simple.

Calculate your income, then add up all your costs. Take one away from the other and hopefully you will be left with a little over which you can use to reduce your debts.

Once you have the list of your costs you can ask questions, was this or that cost wholly necessary? Which of your costs are effectively fixed, like rent or car insurance. etc etc
 
I'm also terrible with money. I'm interested though in how bad other people are with this! Im a little worried about retirement as my pension provider's prediction is that I'll be on about 9k a year. 20 with state pension. Which will definitely not fund my planned life on a yacht in the south of France.

I have a total debt of about £15k. I'm 43. I have about 3k in savings. I honestly have no idea if that's terrible or not. I'm very envious of those above who know how to manage their shit. I get that I need to keep some readies just in case so I'm not gonna put that £3k into paying back credit card debts, just pay back just over the minimum. I'd really like some advice here. Can I seriously just switch credit cards every three months interest free - doesnt that get exhausting?
 
Petcha said:
I'm also terrible with money. I'm interested though in how bad other people are with this! Im a little worried about retirement as my pension provider's prediction is that I'll be on about 9k a year. 20 with state pension. Which will definitely not fund my planned life on a yacht in the south of France.

I have a total debt of about £15k. I'm 43. I have about 3k in savings. I honestly have no idea if that's terrible or not. I'm very envious of those above who know how to manage their shit. I get that I need to keep some readies just in case so I'm not gonna put that £3k into paying back credit card debts, just pay back just over the minimum. I'd really like some advice here. Can I seriously just switch credit cards every three months interest free - doesnt that get exhausting?
Click to expand...

Most offers are for 12 to 18 months, but you might find that you'll struggle to get a new card with a 15k limit, but then I don't know how much you earn. If at all possible though you want to be paying back more the minimum.
 
Petcha said:
I'm also terrible with money. I'm interested though in how bad other people are with this! Im a little worried about retirement as my pension provider's prediction is that I'll be on about 9k a year. 20 with state pension. Which will definitely not fund my planned life on a yacht in the south of France.

I have a total debt of about £15k. I'm 43. I have about 3k in savings. I honestly have no idea if that's terrible or not. I'm very envious of those above who know how to manage their shit. I get that I need to keep some readies just in case so I'm not gonna put that £3k into paying back credit card debts, just pay back just over the minimum. I'd really like some advice here. Can I seriously just switch credit cards every three months interest free - doesnt that get exhausting?
Click to expand...
you usually get 12 or 18 months, there is a one off 3%ish transfer fee, set direct debit for minimum payments, put as much as you can away in a high interest paying account, when the offer ends pay back as much as you can and get another debt shifting card deal, with 15K of debt you might need to get 2 cards depending on your credit score to shift the lot.
Get purchase interest free offer card to use, cut up all lthe other cards and don't replace them.
 
wemakeyousoundb said:
you usually get 12 or 18 months, there is a one off 3%ish transfer fee, set direct debit for minimum payments, put as much as you can away in a high interest paying account, when the offer ends pay back as much as you can and get another debt shifting card deal, with 15K of debt you might need to get 2 cards depending on your credit score to shift the lot.
Get purchase interest free offer card to use, cut up all lthe other cards and don't replace them.
Click to expand...

Shouldn't I keep the cards I've already paid off just in case (I've got about four of them).

Does having loads of cards fuck my credit rating - even if they're paid off?
 
Petcha said:
Shouldn't I keep the cards I've already paid off just in case (I've got about four of them).

Does having loads of cards fuck my credit rating - even if they're paid off?
Click to expand...
You can keep them, just don't use them.

Your credit rating is based on how much you owe in relation to how much your current credit limit is, but mostly it's about missed payments: they are what fuck you up. I think having loads of cards might also play against you.

I found myself in a similar situation to you a decade ago minus having savings but for only 5K so I shifted that and saved so that I paid the whole lot by the end of the interest free offer. I also disciplined myself on spending big time.
 
Petcha said:
I'm also terrible with money. I'm interested though in how bad other people are with this! Im a little worried about retirement as my pension provider's prediction is that I'll be on about 9k a year. 20 with state pension. Which will definitely not fund my planned life on a yacht in the south of France.

I have a total debt of about £15k. I'm 43. I have about 3k in savings. I honestly have no idea if that's terrible or not. I'm very envious of those above who know how to manage their shit. I get that I need to keep some readies just in case so I'm not gonna put that £3k into paying back credit card debts, just pay back just over the minimum. I'd really like some advice here. Can I seriously just switch credit cards every three months interest free - doesnt that get exhausting?
Click to expand...
I mean it's not my idea of fun (chasing round low interest credit card deals) but you're probably paying at least 15% interest on that 15 grand which means that you're paying £200 a month just to hold the debt. If your minimum payment is around 300 you'll be in debt for ages.

Well worth getting a 3 or 4% deal for a year or 18 months and even if you make the minimum payment you'll still have taken a chunk out of the balance by the time the 0% period is up
 
with many of the credit card transfer / interest free deals i've seen, you need to read the small print.

if you start spending on new card, then you pay interest on the new spending, and anything you pay off will go towards the zero interest transfer balance first.

which may or may not be more expensive than any spending on old credit card.
 
Yes it's much better not to use the card. But noticed my card will automatically pay off the highest APR balance first, which seemed uncharacteristically reasonable for a credit card company
 
It’s probably good for your credit record to keep hold of one card over a long period of time.
 
Elpenor said:
It’s probably good for your credit record to keep hold of one card over a long period of time.
Click to expand...
I was advised to cancel old ones that hadn't been used for a while (I had six or seven extant) so I did and my credit score went down a few points (from maximum, and not by much, but still).

If you're doing the deal thing get a nice long deal, at least a year, and set an alarm in your phone for six weeks before renewal date.
 
When I was really trying to reign in my spending, what worked for me was having three accounts:

bank account that I use as a main account for income and outgoings like standing orders for utilities bills and service charge for my flat
bank account that I use as a pocket money account and transfer money to weekly from the main account to pay for grocery shops, take out cash, spend on nights out, etc
ISA for savings

My problem with just having a current account and all spending going into/out of it is that if I check my bank balance and there's money in my account, my brain says: 'You have money, you can spend it', because I've never been very good at budgeting over the course of a month, going from flush just after pay day, to spending too quickly, and then spending at least a week before pay day being totally skint. The way round it is to sort of pay myself weekly by transferring funds to the pocket money account.


(I'm on the autistic spectrum with executive dysfunction traits and lack impulse control, also suspect I have ADHD too.)
 
I've started to transfer most of the balance of my current account into a savings account once the bills have went out - like you AnnO'Neemus if it's in the current account I'll just spend it, whereas I have to make a conscious effort to transfer money from the savings one to spend it. I've got ridiculous amounts of food in stock so I'll see how far I can go with running down those stocks and only buying perishable stuff for a while.
 
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