Earning enough, but spending/repaying a lot

B

BaBa25

Guest
Age: 27
Spouse’s/Partner's age: n/a

Annual gross income from employment or profession: 42k
Annual gross income of spouse:n/a

Type of employment: e.g. Private Sector

In general are you spending more than you earn or are you saving? Trying to Save

Rough estimate of value of home
Amount outstanding on your mortgage: n/a, renting at 550pm
What interest rate are you paying?

Other borrowings – car loans/personal loans:
Car Loan1: 148pm approx €1500.00 remaining
CarLoan 2: €200pm- traded up without the first loan being paid off.
Insurance: 40pm
Travel/Petrol: €260pm
Phone: €100pm
Other bills: approx €70pm

Do you pay off your full credit card balance each month? No, the min balance each month.
If not, what is the balance on your credit card? €4,500

Savings and investments: Savings of €1,100 - this was €6k but recently had to pay for a college course/exams etc, have €400dd going into the savings a/cc each month

Do you have a pension scheme? Yes, contrib'

Do you own any investment or other property? No

Ages of children: n/a

Life insurance: AVC


What specific question do you have or what issues are of concern to you?

The credit card is a concern at the moment. I have not used it for months but am struggling to bring the balance down. I have started a spending diary which i hope will help but I'm concerned with the lack of savings and high debt. I work outside of the county i live in, hence the travel amount.

I also know the car loan was not a great idea when the first loan wasn't paid off but i did need something more reliable.
I'm expecting a bonus of approx €4k in the next few months. Should I pay off the CC? I was thinking of a bank loan to conver the CC as it would be quicker than waiting for the bonus..


Any advice welcome.
 
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it doesn't make any sense to pay 400 a month into your savings when you've got such a large balance outstanding on your credit card, firstly try and move the card to a 0% payment for 6 months and use that time to clear it, use the 1,100 in your savings account to pay off a lump of it first then using the amount you're currently putting into the savings account you should have it paid off in the 6 months.
 
I'd second Derek, you aren't in a terrible position and some thoughtful re-arrangement of your outgoings would improve your position considerably. If you don't want to touch your savings (and I do appreciate that the sense of having some money in savings is comforting) If you decided to stop the direct debit for your savings for a year you would probably clear your credit card in that time and could then re-start your savings again. Using the lump sum would be quicker and at 25 with few responsibilities (no mortgage and no kids!) it would be a sensible risk to take.
 
I also agree. Saving while carrying presumably expensive unsecured debt makes little sense. Clear these debts first before resuming your regular savings/investments. And try to budget better to avoid the need for expensive unsecured debts unless you really need them. Using the bonus to clear the CC debt seems to make sense. In the meantime use the money that would otherwise go into savings.
 
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