#5 My Debt

 What debt do I have?

My main aim and the thing which led me to creating this blog, as I spent so long analysing and thinking about, is my debt and specifically how quickly can I get rid of it.

I currently owe:

£8.5k Student Loan

£10k House Loan

£7.3k Credit Card Loan (used to pay for recent wedding to Mrs Money Interest)

These are being paid back at the subsequent rates:

Student Loan - £346 per month = 25 months remaining

House Loan - £281.65 per month =  fixed term 5 year loan ending Sept 2018

Credit Card - £150 per month = 48 months remaining

I am topping up the credit card re-payments with whatever extra money is left each month. But for the basis of this planning will exclude any expected additional payments until I am happy budget is accurate.

It’s also possible that I will receive a 20% bonus in June/July 2016 which after tax would be roughly £6k. Assuming this is paid I will pay off the three within the below timeframes:

Credit Card

• £150 p/m until July (8 months = £1.2k)
• balance @ July 2016 would be £6.1k
• bonus pay of £6k in July
• so aim is to pay off by August 2016

Student Loan

• additional payment of £1k in July 2016 due to bonus = 8months @ 346 pm = £2.7k + £1k = balance @ August 2016 = £4.8k.
• Up until the end of the calendar year would be an additional 4 months (4 x 346 = £1.4k)
• Expected balance December 2016 = £3.4k

In summary, this may be very dangerous to both my planning and morale, but I am going to assume that I receive a 20% bonus next July (have received 2/2 so far @ my employee).

With this assumption by next December my Credit Card should be paid off – returning £150 per month to my savings / repayment pot, my student loan will be down to £3.4k and my House Loan will have less than 2 years remaining.

In July can make a decision about whether to start to pay off the Student Loan or the House Loan as priority.

My main take away from this is – the loans are being re-paid, there is light at the end of tunnel but it is a long tunnel and the priority and concentration has to be on sticking to and reducing budget now.