#DebtAdvice #FinancialAdvice #LISA #PersonalFinance
Hey everyone! 👋 Needing some guidance here – wondering if I should dip into my LISA to pay off my debt. Here’s the breakdown:
-£2399.09 Monzo Flex
-£1915.20 Monzo current account overdraft
-£798.08 Halifax credit card (ouch, that interest rate 😬)
£10,271.40 in MoneyBox Lifetime ISA
My monthly salary is £2729.39, and rent + bills take up £1,100 of that.
What do you think? 🤔 Should I withdraw from my LISA to clear the debt? Or are there other ways I should consider? Any advice would be amazing, thanks in advance!
My suggestion is to explore other options first, such as creating a solid budget and prioritizing high-interest debt repayment. Consider seeking advice from a financial advisor for personalized guidance.
It’s great that you have a LISA and it would be a shame to be hit with a 25% penalty. Are you saying that you have £1,600 spare each month? And if not, how much spare do you have?
It shouldn’t take too much effort to clear the credit card and then you can focus on the Monzo debt.
I would compare the LISA penalty cost with the cost of interest of paying it off with monthly additional payments, and then do whichever is cheaper.
Don’t forget that once you have paid off all your debts, you can build your savings back up much more quickly than you were.
What is the interest on the flex account? Do charges and interest apply on the current account?
>Monthly salary is £2729.39 with rent and bills easily taking about £1,100 of that
Where’s the other 1600 going?
If it’s a new job/spending habits then just pay off debts in 4 months. The 25% is most likely not worth it due to how quickly you can pay these debts off.
Can you not balance transfer to a 0%?
>-£798.08 on a Halifax credit card. Monthly auto payments are typically around £40. Interest rate of 34.55%
Log into the online portal. Do they have any balance transfer offers for you? Or money transfer offers?
What’s the credit limit?
Get a 0% credit card and slap all the balances there, then pay it off before the term ends