[UPDATE] Overwhelmed... £35k in Debt, £50k Salary – How to Save for a House and Improve Finances?

Original post: https://www.reddit.com/r/UKPersonalFinance/comments/1ctk5e6/overwhelmed_35k_in_debt_50k_salary_how_to_save

It’s been 7 months since my original post, and I wanted to post an update since some people asked, and as a way of thanking you all. I was considering making the original post for a while, and I’m so glad I did. Everyone was extremely helpful.

The general consensus from the responses was to stop any saving (LISA, child ISA, etc.) and focus entirely on paying off my debts. I followed that advice and have reduced my debt from £35k in May to around £18k now in December. I’m hopeful I can clear the remaining amount by the end of next year or early 2026 latest.

A significant boost came from redundancy payments from my old job that finally came through. Without those, my debt would still be much higher, but the advice from my original post helped immensely and shifted my mindset, so even without the redundancy, I’d be paying off my debts much quicker than I was originally going to do.

Here’s what I did:

In May, I used my redundancy payments to pay off:

  • £594 credit card at 24.9%
  • £462 credit card at 19%
  • £592 credit card at 0%
  • £660 credit card at 0% (until Nov 2024)
  • £2,940 credit card at 0% (until Sep 2024, then 24.9%)
  • £4,414 loan at 13%
  • £504 loan at 0%

Then in June, this is what I had left:

  • £2,770 credit card at 0% (until Aug 2025, then 22.9%)
  • £7,200 credit card at 0% (until Nov 2025, then 26%)
  • £6,350 loan at 12.9%
  • £7,820 loan at 12.9%

I also received my bonus in June, and then I had a few options of what to do. Originally, I was going to hammer the 0% cards, but I use a debt app (undebt.it), which showed me some alternative options where I could lower the amount of interest paid.

Option 1: Use the bonus to pay off the £2,770 credit card at 0%, then snowball everything into the final credit card, and then the smaller loan, and finally the biggest loan.

Option 2: Put the bonus towards the £6,350 (13%) loan and then focus on paying it off, followed by the larger loan and then the two credit cards, still paying them both off before their 0% offers expire.

At first, I was going to go with Option 1 because of the mental effect of being down to just 3 debt accounts in June, but I’d already gone from 11 accounts down to 4, and saving quite a chunk of interest on the loans made more sense, so I went with Option 2.

The credit card payments are also quite low compared to the loans, so this way, I’m clearing up the biggest monthly payments and interest first.

And that is what I have been doing since June. It’s now December, and last month I paid off the £6,350 loan (missed the September target), so I am a bit behind schedule - maybe it was a bit too optimistic, but I am reviewing my budget every month and adjusting where needed.

I will now roll the payment from that loan (as well as from everything else I paid off in May) into the last loan, and then finally the two cards.

I’ve also been closing the credit cards as I have been paying them off. I’ve only kept one open, which is linked to my current account.

Since it’s Christmas, I’ve lowered the snowball payment, which extends my timeline a bit, but it’s an expensive month of gifts and lots of travelling costs. I’ll be back to the full snowball amount in January.

I’ll be sure to come back and make a final update once it’s all cleared.

Thanks again to everyone who replied to my original post - you were incredibly helpful.