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I haven’t really been doing much this year, just plodding on sorting my life out.
I reached a big milestone (for me personally anyway), last month. I cleared off one of the debts on my credit card. Rather than let it run for another 3 or 4 months, I made a final payment of around £800 to clear it off completely.
This saves me (around £150 per month), which puts me in a better position for dealing with emergencies, or just having some spare money.
One of the decisions I made was that I wanted all debts to be gone by the time I was 40 years old (currently I’m 38). Discounting for a mortage as this is quite a big lifelong debt, I wanted to give myself a fresh start.
I now have two remaining debts as such in my name. A credit card, and a loan.
The loan is a fixed payment that runs for another 18 months. I contemplated overpaying this so that it comes off sooner, however the amount it saves me is negligible. Plus the loan company (AA Loans), messed up my loan agreement when I was clearing off my arrears previously (and still haven’t fixed it – so I keep receiving NOSIA documents every 6 months), so I’m not going to bother over paying this, because it will clear around the same time anyway, and isn’t worth the headache.
Now, I only have 1 other debt which is my Credit Card. I currently have a large balance on this, so making a fixed payment. As I’m now saving extra money after clearing one credit card off, I’m now using half of this money (£75) to over pay my credit card.
This now reduces the overall payment term from 50 months, to 31 months for me on this card due to me paying an extra £900 per year towards this, whilst also saving me £900 per year in my bank. I don’t lose miss the money because it would have gone on debts anyway, so I’d rather use it for a good reason.
