The Vault with Financielle - "I have $200k in my pension but only $1,300 in savings… Help"

Episode Date: August 13, 2026

While we work on the next chapter of The Vault, we're bringing back the episodes you loved most. 🤫 This one kicked off our biggest year yet!We open with a round of Jail or No Jail: "I keep all my money in cash because investing scares me"… guilty or not? 🚨Then we dive into two listener dilemmas:💸 "I Have $200k in My Pension but Only $1,300 in Savings… Help"💸 "I'm Trapped in My Overdraft After 20 Years"Plus a community win that still makes us smile: £15k overpaid on a mortgage in one year 👏Got a money win or (totally anonymous) dilemma? Share it via the Financielle app community or email [e-mail] 💌You're not alone in figuring this stuff out. More honest money chat at financielle.com 💖💸Connect with our Partner🫶 Protect yourself and loved ones with our friends at Lifesearch** The above is a tracked link, which tells our partner we sent you and may in future result in a payment or benefit to our site.

Hi guys, Laura here. We're taking a little summer break from new episodes, but we know the Thursday vault drop is part of your routine, so we're not going anywhere. Instead, we've raided the archive for the episodes you have loved the most, including a few that went slightly viral. We're working on the next chapter of the vault behind the scenes. We can't tell you much yet, but we're excited.

In the meantime, keep your dilemmas coming. Share them in the app community, or to be completely anonymous, email the vault at VanShell.com. This is the episode that kicked off our biggest year yet, with a dilemma so many of you related to. Enjoy. Welcome to the 100th episode of The Vault. This is a safe space where we talk all things life and money

and no topics are off limits. How do you 100? Do you famous songs? Well, did anyone ever follow Louisa Zisman and her journey of like, she calls them balloon wankers? It's like when someone's got like one million followers on Instagram and then they've got like those like golden silver balloon. She's like you have effing balloon wankers.

We're not. No, we're not. Don't worry. But yay, well done for any. If you listened to all 100. God help you. I can't believe we've sat here 100 times. I know.

I love sitting to be honest. You're like, I can. I would do another 100 with you guys. No problem. Keep the caffeine coming. Keep the banter. Keep the dialemers. I'm here.

for it. Right. Time for jail or no jail. Oh, are we ready? Keeps like enjoying this, haven't they? Paddles at the ready. We've got some juicy ones today. Okay. We've done our own today. I keep all of my money in cash because investing scares me. Walk yourself to jail.

This is why I've a test of like cognitively for me, which one do I hold up? Because no, that's bad. So what do I? Jail. Jail. Jail. It's nothing to be scared of. Like if you're all cash rich. it means you've got excess in your budget every month. So let's put it to something that grows. And it doesn't have to be... It's not that deep.

Mentally, I'm picturing cash under the bed as well. So let's put... If it is cash, is it in a cash savings account? I'm not in like... In an envelope or... Is it in a briefcase? I avoid friends I tend to overspend with. No jail.

No jail. Oh, go on. Lucy's jail. I think it's your problem. Oh. That's a strong... You need some more will spend. power. That's a strong position. You can't cut out your friends because someone is like,

oh, this looks nice on you. We're millennial and British, avoid the problem, run away. I can't, I'm ill. I went ostrich. Socially awkward ostrich. Whereas Lucy's like, I'd like to come, but can we go somewhere else because that's too expensive. I want to budget. Yeah, you suggest other things you can't lose friends because of that. Lucy's right. We're wrong. You're so loyal Lucy. Well done. I've never negotiated a bill or a contract? Can I do like a half and half? Because if it was a friend, I'd be like,

you need to negotiate that contract. I don't know. When it's me, I'm like, it's fine, I'll pay don't have no problem. Have you ever negotiated it? What do you mean? Like, what? I think, like, if you're on the phone to like a mobile phone company, Laura's husband is the best for this. Oh God, he'll do it for everyone.

Long story short, they got new windows a few months ago. And anything I do, Holly does. And everything Laura does, I do, like she just said. But Carl had done the due diligence and he'd got like, six quotes. Wow. So we got six people to come around and speak to them and measure up and whatnot. I came home and there was a man in my house and it was like there was an affair going on.

And I went, hi. What are you doing here? I was like, he's just leaving. He was actually the third person that had been that day. Yeah. So we know for a fact that Carl has done the due diligence not only on the like thorough checking of like quality and. Reviews.

Yeah, like the people that are going to do it and whatnot. But we know. know that he will have whittled that person down on price by God he. So Neil that they were paying those to the windows. Yeah. Neil didn't even think to be like, oh, should I negotiate? He was like, I don't need to negotiate on this price. Like I know full well that Carl has like beaten this man to death with like negotiations.

I'm not doing it. Yeah. I didn't want to do it. So yeah, Carl does it. Depends on the thing we should. I would like, it's like bartering. I would die when we went on holiday. On holidays when like a Spanish market.

But like when mum and dad used to be like, you have to barter, they want you to. They want you to. No, they don't. They won't full price. No, but there was a time, I think we went on holiday over Christmas and Carl was getting lububos and the woman was like 40 euros or something for like two. And he was like, no, I'll pay 20. And she was like, okay.

And he was like, oh my God, that's scary. She should have done five. Like Carl was a fuming. And she like came down so easily. He's like, oh, he wanted the bantam and like the back and forth stuff. but if you're like overtly like British and like he's a millennial, like it's so awkward to feel like you negotiate.

It's easier over the phone when you can't see the person. So I think if you were like negotiating a phone contract, you could like, look, my budget is this and I can't go, like you've got a bit more about you. But face to face, I would be bright red as a berry. I would be dying. If there's one tip that I've picked up from Carl, it's like at least saying, is that the best price you can do?

And that's fine. So can you do that on like water bills? Possibly not. I feel like that's, I'll give you 40 pounds a month. Good English pounds. Take it a little bit. And a chicken.

I've already used all the water. Take it. I'll leave it. They'll be like, okay, we're going now. Is this a prank call? I would love actually messaging to us. I think it's, is it even more of a male thing or female thing? I don't know.

So. And I want the best ones. Like, what have you managed to? Tell us what you've been able to handle. I think on things like secondhand cars, you could probably negotiate. appreciate down. And like, yeah, labor, business work. Imagine since your hair dresser, like.

What's the best you? Once it's done. Mandy, next time I come into you, I'm going to be like, I like your work, but I'm on a bit of a budget. After you've done my hair. Let's call it quits. Mandy, we would never. I would never.

Right. I think half and half is, it's down to personality. Don't sweat the small stuff. I compare my finances to my friends and feel. behind. Jail? Jail and no jail because some people say like don't compare comparison is a thief of joy but if you're friends smashing it with the money and you're not being

you're doing terribly and you're doing your head in the sand and they're investing and they're doing all these things I'm like no no you probably should be like oh I need to sort myself out not they're better than me the most successful than me like none of the personal stuff but if they're looking and feeling financially well in the way that they're talking

and take a bit of inspiration from that, not comparison, just a bit of, oh, I'd like to get to a place where I can pay for a holiday in cash and not a point on my credit card. Like those things I'm okay with. Healthy competition's not bad as long as it encourages you to improve yourself.

Like I think this is the same. Money, I think it's the same in health, fitness. You're in a race against you. Yeah. You're not a race against anyone else because it's impossible. There's no one's the same. No one's the same.

No one's got the same. The best you can do in that moment with what you've got, then great. So someone else's best might be different to yours and someone else's best may be different to yours. So yeah, I think I said, Jill, because I was like, get yourself to a point where comparison doesn't impact you negatively. It's okay to compare and go, oh, I might not want that. Well done then. Actually, I'm going to go look at my budget. Yeah, because when you talk about your investing journey on here, people your age might never have considered that as a thing for them.

so I hope that people would go, oh, not like, I need to mess more than her. I need to do it. They don't do that. Just more like inspired. Be more inspired by your friends, yeah, rather than compare yourself. I use my tax fund as my emergency fund. Oh, that's a definite jail.

Wow. I mean, kudos that you've got a tax fund because some people don't put aside money for tax. That is completely normal to do. People are always chasing the tails with, you know, like we've just been through tax. It's tax. season, December, January, everyone's like, the self-assessment happens, self-employed people

or people that have to do them. And so to have that money there is amazing, but it isn't an emergency fund. Now, it is yours practically. I always see it as the tax man's. So I'd rather just give it as soon as I can get it. I'm not bothered about getting interest on it. I like keeping things simple and getting rid of it as soon as possible because it's something that I owe. So it's owed, but it's not theirs. It is yours. And so if you need to use it for an emergency, say obviously like practically it is yours but then how do you pay for you tax so mentally pretend it's not have both dipping into it's not the one is it not outside out of mind for vat a tax sorry just put it to one side okay time for our first dilemma of the day if you're stuck in consumer debt

listen to this one financial user said budgeting the financial way helped her clear over two and a half thousand pounds worth of debt and finally feeling control of her money if you're ready to do the same, download the financial app and join our community today. I have 200k in my pension, but only 1,300 in savings. Hello, I recently started listening to your podcast and I'm really enjoying it. I've started my financial journey this year to learn more and grow or finances, and I'm looking for advice around savings. I'm 33 and I live in the US. Overall, I think I'm doing fairly well, but my biggest issue is not having enough in savings. I currently, put 16% of my income into my workplace 401K and I'm wondering whether I should temporarily cut back on that to help build my savings more quickly.

Right now I have around $1,300 in savings and over 200k across my 401k and another retirement account. I'm hesitant to reduce my pension contributions because I don't want to miss out on growing my retirement. But I also think having more in savings would take off some stress. I'd love your thoughts on whether it makes sense to reduce my contributions for a short period of time to build up my emergency fund or whether I should keep things as they are. It's a really good dilemma. Yeah, I love our American girlie. Messaging with her 401K. Wow, she's done amazing as well.

Really good. It's a really interesting dilemma, isn't it? Because it's one where there's been such great investing, great saving for retirement. She talks about the percentage that she's contributing 16%. which I don't say is too much like in auto-inrollment in the UK for example the government got to a point we're copied I think Australia a little bit

with their superannuation percentages and someone that's listening from ours may know better than me in terms of percentages but what auto-involment is in the UK is the government realised people didn't say for retirement how can we get more people to do it and a bit like blood donation

no an organ donation they did opt out rather than opt in so for certain criteria in the UK, if you're employed, you are auto-enrolled. And that massively, and so I think you put like 5% in, and the employer contribution, government contribution, and the net effect of that was that people suddenly started to save for retirement, so it definitely worked.

And so they picked that percentage, and that percentage is, I guess what's deemed reasonable when you've got a budget and you might have, you want to do fun things, pay few bills. You know, like if they made that mandatory at 20, a lot of people would sort of like, oh, like great for retirement, but I can't live now. So they picked that for a reason.

But obviously that happens to me and I might have 200,000 more in my retirement than Holly. But we put the same percentages in, whereas maths would say Holly needs to put more in because she needs to catch up, whereas I'm kind of okay. So I think what I mean by that is there's these set percentages,

but really it's all personal to you. And so I don't know why you're doing the 16 where that came from, whether it's something just that was through work, whether you chose it at that. But because what I don't like saying is, oh yeah, you can bring that down. that might be right for you.

I would rather go to the other side and go, okay, $1,300 in savings is definitely not enough. And you've absolutely identified that, especially when you've got such a strong, like, Ness egg on one end, you are able to save and put stuff away. Let's pick your total. And she doesn't mention debt. She may have debt. But if she's not got debt, then she needs to pick that emergency fund total. and she needs to find a way to hit that ASAP.

Now, one way to do it could be slowing down retirement, maybe, reducing the percentages until she hits that figure and then kicks it over. But part of me loves the idea that she challenges herself and goes, leave retirement B, just carry on as normal. The danger is you don't knock it back up again. How do we, like if you were faced today with you need to build an emergency fund, like what would you do? We always love, well, in the UK and I don't know if they offer it in the US, but like bank switches, I'm always like, that's 250 quid done. And I'm like, you can sell stuff.

I've not heard of it as much. I haven't heard any community members say that they've taken advantage of something like that. Like a no spend month. Like what can you do a lien? Hacking it. You want it. We want you to hack it. If you want like $10,000, how quickly can you save $10,000? Because it would be such a shame to slow down the investing journey because you're just doing so well with it. But one thing I would say is it's so, it's such a good amount, but I don't know it again, if it's a good amount. Yeah, 33. So it's a good amount.

He doesn't tell her his age, apart from she does. It's probably a good amount that I would be tempted to pull it back for a little bit, not all. That's right. If we followed Playbook strictly,

it is obviously, it's designed globally, but we link investing to the auto-enrollment contributions because what we don't want is someone, when they're on the playbook journey, opting out of pension contributions

and never going back in and someone could do that and then fall off the journey not do stuff in and suddenly they've ended up worse because we've told them to opt out

so what we always say is try and invest the default minimums which is around 5% for the individual I think two three percent to be like that for the employer

and the government contribution so you end up with 18 so we say do that so maybe there is an opportunity to reduce it for a period of time but go harm and because you're still then investing

you're not stopping That's a thing, isn't it? Yeah, time in the market. That's what we would say to do. We would say, you need a large emergency fund. And then when that's full, you go all in on your next goal. And if it's not buying a property or buying a home, it's investing in whatever, you know,

configuration you want to, whether it's retirement, whether it's in other investments accounts, that are like pre-retirement accounts. So it's a great question. Yeah, if you've got security for the future, but actually you've not got much security for today and it's highly likely that something, because it will, we've all had to dip into an emergency fund for something or another.

We don't want you to go into debt. And you haven't mentioned debt like Laura said, but it sounds like you've got your money shit together. So it would be nice to just maybe reduce it down temporarily and then go ham on the emergency and then you go back into investments again. Go ham on those. And a quick reminder of people listening,

do your net worth? If you've not done your net worth, the fact that she says, I've got 200 in retirement, how much have you got in retirement? Like, do you know this person has messaged in? She's absolutely switched on. she does need more emergency cash in her back pocket. But the fact that she has done that and knows how much she has,

don't be afraid of it. Log into the things, obviously in the app, we've got the net worth tracker. Holly and I were talking about her investment journey in the car this morning and about the on reflection, the quantum and like how much she's actually contributing to catch up is massive, massive across all the different like configurations.

Because sometimes I'm financial poor and I'm like, why, why? And we're not. But sometimes you're going back to the windows conversation. She's opening up for a door. Because composite door's like £2,000 minimum. And I was like, £2,000 for a door. It's going to take me like however long. And I was like, I could get it next month if I stopped,

if I've paused investing, but I don't want to. But I could pull back on investing for a time if we were desperately needed it, but we don't. It's not an emergency. So we'll just keep kicking it down the line until we can afford it without compromising on investments. And that's such a good place to get to. And we talk about grow all the time because I think we're all in Grow

Out way in the play. I think we're like, I think it was that. She skipped a step. Well, yeah, but you are technically you are in grow, aren't you? And that you're using your excess cash to put towards things at grow. You've got your emergency fund. That's not an effort. But you skip it.

Build is buy a property if you want it. Yeah. You don't want it. Cash is king. You're building up cash and savings for if you would, an investment if you so chose to. But you are in grow. And so it is a little bit of like pat yourselves on the back and the fact that these quantities of being grown like $200,000 in retirement at 33 is amazing.

And so I would talk about earlier with comparison, like be inspired by that. Go find out what yours is and go do the work to catch up. That was my point. You know, you go all around the houses. Holly reflected on even how much hers had grown personally in about two, three months. You know, the market's up and down all the time. She's got a very, very balanced portfolio. It had jumped.

I think it's like seven grand in like two or three months or something. And I've not done that. It's just sitting there and they're investing for me. Yeah. Can't help me the Wolfwell Street. Follow Holly for more trading tips. Okay, this is a really good community win. From someone also in a group.

By December last year, I had managed to pay off 15K from our mortgage, which still feels unbelievable. Thanks to financial, I took back control of our money. I took back control over. I took back control of our money. And set both personal and household goals. My original mortgage mortgage goal was to knock off 8K. So seeing it reach 15K left us completely over the moon. Yeah, I'm not surprised.

How amazing is that? That's an amazing win. And we've got so many people that are saving for a home or thinking about it, doing the right move, stalking, like building up to that moment. And then she's well past the other side. I followed this win. because isn't she now aiming for 19 this year?

Because it's 10% of her and like the allowance that you're allowed to pay off your mortgage. Really? So she paid, so she wanted to pay eight and she happened to do 15. Yeah. So now she's like, so I'm going to do 19 because if I can do, if I didn't, if I planned for eight, got 15,

what can I do this year? So that's 10% of her annual allowance. We did a little bit with, um, Sprive app and actually in the, um, we might have a referral code, but we don't get a commission on it, but if it's, still works. You can get five pounds towards your mortgage. So Lydia can put that in the show

notes for everyone. Yeah. For your first eligible shop. And the code is F-I-N-A-N-C. Finan-C. Finanke. Yes. And so if you join Sprive app, it's a cash back app just like the this that we've talked about before. But the difference with this one is you apply the cash rate to your mortgage. And what I love about it and about the concept of overpaying the mortgage is when she paid 15 grand off. She didn't save 15. She saved 15 grand plus the interest. She saved the interest on the 15. That's what she's effectively saved. She's paid off the capital. That gets knocked off the capital. Exactly. And so then the interest is also calculated on the remaining balance, which is now 15 grand lower. Less. And there's loads of really good in the Sprive app, but also

online, Google mortgage overpayment calculations. I think you hear it a lot. And I think we get asked about it sometimes like what do I do, do I do this to do that? We always say wait for grow because it's such a big amount of money that really to really make a dent in a mortgage you want to be paying quite a lot off it. And you don't want to mess around with that when you've got consumer debt here and there. But it's the compound impact of that that overpayment. It's not just the overpayment. It's the percentage interest rate that you're paying on your mortgage. So like I'm at a four and a half percent, I think. So I'm making that. Especially if you're coming up for renewal, like you say, and if your mortgage interest is

to increase. That's Neil and I, you know, we got a really good mortgage rate four years ago. It's now coming up for renewal in August. I know. So we started to overpaid. I saw someone do a postal LinkedIn the other day and I think they were a financial advisor and they were just saying this is a warning for anybody whose mortgage is about to come up for renewal and you've been sitting pretty on a five-year fix at one point something

and you've done nothing to plan for this increase. He was like, you should start looking at rates now because you can look six months in advance. Yeah, yeah. He should be overpaying what you pay at the moment if you're an interest is really low just to get you used to your family. You should be looking at your budget and saying what's it going to go to?

Absolutely. And I wrote on, and I don't usually write on people's LinkedIn but I was like, I absolutely disagree. Disagree. I was trolling him. Ignorling him. Yeah. Ignorances bliss.

Live your life. No, no. I was like, I 100% agree with this. And so many people in our community, people that we know have probably just oh I'll brace it when it comes to it no let's face up to it now there's going to be an increase no matter what if you fixed

five years ago what is that increase going to be does it fit into your budget can you do things ahead of time to start softening the blow and Neil and I did last year we were like let's start overpaying so our budget gets used to what this overpayment could possibly be so it's not going to be a big shock when

we know it's going to go up but it won't be like your mortgage 200 oh I've got it my net worth tracker and my phone's over there. 250, I think. What's mine? I'm 290. Oh, I was going to say she we have a race, but mine's higher.

The race is cancelled. The race is on. The race is on. Yeah, like the fact she's going to go for 19, that sounds like it might be, yeah, maybe 10% of a balance. Such a win. I want to do that.

That's my next thing. Okay. Yeah, but you can. No, I want to start doing the 10%. Yes, yeah, yeah. Your early repayment. So I'm going to set up as a goal. This is what I'm going to do.

I'm going to push you. I'm going to workshop up you. So if that's your goal, because you're already using your access to invest and you kind of had those set, you're going to do that same thing. So 20, 10% of yours would be 23 grand. Let's call it 20 even, if you were a bit wrong, anything. Say it was 20. Oh, I just like going on holiday too much.

That's my problem. You go, well, what would I have to give up? Holidays. Or invest in other places. And at the moment, because my interest is so low, it's better for me to invest. Yeah. So it's really hard. You can't have it.

This is where we go, you can't have everything. You can't have everyone. You're right. You know, people write in, I fully empathise with the dilemmas because they go, I want to save for a house and we want to get married and we want to go on holiday and we want to build an emergency fund. It's like you can have it all, but you can't have it all at once. So what's the priority? It's much more relaxing or like, I don't know, less stressful to have the debate when you're in grow, which is should I arrest or should I overpay the mortgage? rather than like, should I put tyres on the car or should I, um, pay my debt off?

You pay my debt off. Yeah. Or should we go? Yeah. But it's a listen. I've been there. So it's not coming from a place of like. Super privilege.

Yeah. You've earned the right to be where you are. Yeah. Let's know what you do. If you'd like to tell us, you'll win, head to the community in the app or email it to the vault at financial.com. And actually, if you're listening to this on the day it comes out, which is the 22nd of January, there's still a week left of our community giveaways.

Oh, yes. Lydia, do you have some examples of prizes people could win for posting in the community? Oh, we got the one and only Greg's voucher. Yes. I think that's just the winter warmer of dreams. I've got M&S. Yeah. Picky bits. Digital playbook. Oh, that's a big one. The course we did is worth £97. That's a good one. Someone won that didn't they in the first week and they were like, oh my God.

Because I was like, are people going to be sad that they can't go and get a donut from Greg's? They have to sit and watch this course and she was like, I am absolutely. thrilled and I was like it's actually a really good course. It's got quizzes and extra resources. Yeah. It's a good one. Yeah, so go and post in the community if you haven't already. And we want like mistakes and stuff. Like we've had a lot, a lot of wins.

Yeah. Now we want like... Show of vulnerability. You are. Where have you effed up? Like let everyone feel like they're not so alone. Okay, time for a second dilemma. Did you know that over a third of women in the UK have no protection in place

compared to just 16% of men? We've partnered with Life Search so you can chat to an advisor for free and get the cover that you deserve. Head to fanashel.com forward slash protection to get your free quote today. I'm trapped in my overdraft after 20 years. What? Okay, there's a lot of numbers in this, so. Oh, God. Once again, no pads out.

Do we need this? Listen, guys, that's a good idea. I'm going to write the numbers down. Are you doing math? Call me Carol. Carol, poor Rachel. Carol's just the edge, isn't she? The OG.

For those people that are too young, Carol Votterman used to be the numbers person on countdown. And for those people not watching, I have got my jail paddle and I'm using it as a whiteboard. Okay. You're going to need small text. Okay. Just to let you know. Hi, girls. I really need some advice.

I'm struggling to pay off my debt and my good intentions to budget every month always seem to fall apart. These are my current debts. Zopa credit card, 1,400. Virgin Money Credit Card, 3,800. How many, sorry? 3,800. Yeah. Next, 1,400.

Screw next. Very, 250. TSP credit card, 2,900. Okay. There's still some more figures. Oh, gee, scum. All of my credit cards are currently frozen on an interest period. Earlier this year, I spoke to each lender and asked for help,

and they all agreed to freeze interest for nine months. However, this is classed as an arrangement to pay on my credit file, and I'm not sure whether this is a negative thing. I also have a NatWest overdraft on an old student graduate account that I've had for 23 years. I still owe £700 on it. I've been paying £25 off a month for years, but then sometimes dip back into it and transfer the money into my current account. I don't actively use this account and it's still in my maiden name. On top of that, I have a £3,000 TSB overdraft. which is where my wages get paid. I once managed to get it down to 1,500, but I didn't reduce the overdraft limit, and it slowly crept back up. I'm really disappointed in myself about this. I'm being charged around £90 a month in overdraft fees, which is crippling me. The fees often come out on the same day as other bills, which then pushes me over my limit. Over the past few months, a couple of my direct debits have even bounced. I opened a Starling account in 2024 to try and help with my financial debt-free journey, and I think it has helped a bit, but I feel stuck in a

really bad cycle with money. My credit score is really poor, which meant we couldn't get a good deal on our mortgage renewal last year and are now paying more. I can't even get a small loan to buy a car and I don't have any savings. I do pay into my work pension and also invest in our company's save as you earn share scheme. I have a good job, but the last two years have almost broken me. What can I do to start making this situation better? In particular, I'd really, I'd really. I'd really really appreciate advice on what to do about the overdraft fees. Thank you so much. I to take notes as well because there was so much going on that I was like, Holly's doing the numbers and I'm doing the notes. Thank you so much for sharing that. I think that's one of the first things

I want to be able to do because I can't imagine what that feels like. We've got one, two, three, four, five, six, seven different either credit cards or in a couple of overdrafts, two overdrafts. that is, you know, around five different providers messaging you, telling you what your bills are, bank fees, charges, there's a lot going on. And I think no matter what happened to kind of get you there, I think people shouldn't underestimate what that can do to a person. Because like you sound like you're trying to get organised. You started with Starling.

Like, you know, you may have heard that from us. because it absolutely helps lots of buzz budget as Staling a Monzo kind of account. It's like you're trying to put some things in place, but you've not quite got to the point where you're doing the things that will fix it. I noted that she was worried about a credit score because she was like, oh, you know,

the kind of getting the interest frozen, great work speaking to creditors again. If anyone's not done that before, please make sure you do it. And it obviously, it may have impacted your credit score for mortgage renewal, but quite frankly, I think it'd be more on affordability. I was just right to say, you've got so many outgoings. I don't think they'll go, we've talked about credit scores so many times.

I think they just go, you're a person and a lot of debt. Yeah, and you're in overdraft. So overdraft is not just like, it's classed as, it's not, this isn't the formal word, but it's irresponsible with money when you have to go into your overdraft all the time. So people, I say it's all the time, if people like nudging by 50 quid, 100 quid because you're just not managing the money right because we're all, you know, busy and whatever, it looks really bad to a potential lender. It looks like you can't manage that money. You can't manage your money. You need it rather than you're a bit careless or you're just not caught,

which is where a lot of people remove them. Can't get to the end of the month with money left over. That's like a perfect example. You literally can't. Some people, it might be just that you didn't transfer money in time or it's like an admin thing. And that's why for most people, if you don't, if you don't need that overdraft, asking your bank to remove it is one of the best things you can do because going into it even accidentally can impact your credit score. And so I am sorry that obviously this impacted your rate that you're offered for the mortgage, but don't care about your credit score right now. Credit score is the last thing. Like, you do not need any more debt. And yes, you've not got a great rate on the mortgage. But what's done is

done, move on. You know, you've got bigger problems than what you rate is. So don't worry about that. And I promise you that by absolutely going intentional and starting a kind of, like, kind of of like a clean slate with your debt-free journey, I think. Like, let's draw a line under it and let's pick the route that you're going to go down. When you get to the end of this and you will, that will have an amazing impact on your, I'm not going to call it your credit score, I'm going to call it your relending or your next mortgage rate. Feasibility for lending. More preferable.

Yes, rather than, it'll make your score go up. Right, I've written that, then, written that down, written that down. So there's two things we need to talk about. We need to talk about budget and we need to talk about the order in which you overpaid debt. Holly has written Avalanche Snowball question mark. I was actually on the BBC yesterday talking about this. And two amazing diagrams and I got very excited about it. And they were like, do you need your cue cards?

I was like, I don't need to get it. This is my favorite thing in the world to talk about. But for those that don't know if you need a quick reminder, when we're paying off debt, there's two ways we can do it. We can either do a snowball or an avalanche. What you need to do is make a list of debts. She's done that. She knows them.

And a snowball is paying the smallest off to the largest. and then the avalanche is paying the highest interest rate to the lowest interest rate. Now, interest is frozen on all cards. And then she's got her two overdrafts, one's 700 and one's 3,000. And so she's paying £90 a month in overdraft fees. And so 25 on the NatWest one. But that's voluntary payments from her. So the £3,000 TSP overdraft, you get £90 per month overdraft fees.

but she's, there's no overdraft fees with the Nat West one. She's active paying £25 per month herself. Oh, okay, so that's not a fee one. Yeah, no. So this is, I'm going to go a bit rogue on this one because I think this is where there's a little bit more jiggeripocry to maybe do to try and get rid of some of these. I don't think she mentions when the interest fee payments,

she's going up to an end. Yes. So I don't, she didn't give an end date. She just said I've spoken to them, he'll give him nine months. But it's coming, isn't it? I mean, what I would think is, I feel like I would want to sort the TSP one out because 90 pound a month fees is not great.

What I would also say, the others are about to kick on to interest and I don't know what the various interests is. Tip number one for this is, optimise fees and interest rates. You've done it on the credit agreements, but is there anything that TSP can do? If you can get on the phone with them

and you may have done this, but this is for other people as well. Get on the phone. Show them your budget, demonstrate that you're trying to actively get out of it. Would they be prepared to move it to credit? Like, I hate debt consolidation and credit consolidation, but when you optimize it for an interest rate and then go really intentional on a journey, not where you consolidate it and bring them all together,

but like you've already got a card with TSP and an overdraft TSP, if they could move that. Oh, could they do that? Well, because what they do, you extend the credit limit on their TSP and you do a transfer, only they let you. Some of them don't do money transfers, some of them do. but see if there's anything that can be done with those fees if you show them and demonstrate to them

that you're working hard to pay off they might not be able to and if not and the others are going to kick off to interest soon and some of them are going to be quite high yeah because your balance is a high like the virgin money is 3,800 and I know very is really high on interest rates very and next will be because it's store related

but the very is 250 so if you go in snowball the lowest one is 250 pounds one vary for a little bit of like mentally for me as well I would be going to get rid of the Nat West overdraft because you've had it for 23 years and I think mentally that's a big win for you to go. I've finally done it, I've finally got rid of it

and literally closing it down. And then it's done and it's a huge win for you to go and making change this time. So much so that's something there's been the monkey on my shoulder for 23 years has gone. So when we talk about avalanche and snowball, snowball's more giving you that motivation. It's not mathematically the one.

It's proven to be more effective. What do you think? I think that overdraft and I know obviously the yeah the big overdraft where her wages get paid in like that's her active account yes i i don't think she's using any more on these credit cards like yeah um and i think that's a habit thing that you need to like nip in the book because if she's it's crept back up slowly she's like proven to herself that she can halve it yeah but she didn't like it's very messy isn't it to get paid into an account the only thing we've got here by the way is um she doesn't mention emergency fund

Yeah. Oh, my God. So this is the part. I was sorry to interrupt Lizzie. What was going through my head then was not only is her account sloshing, her money sloshing around in that account. She's no emergency fund either. And so the overdraft is a fallback. I would be tempted, right, to move to Starling to have my wage paid into, literally.

Clean. Clean. Treat the TSB. as a credit, a credit card, a debt. If all your bills and everything go in and out of that and you want to keep them all that, you can transfer them over quite easily.

But if you didn't want to, then what you do is you work out in your financial budget how much your monthly bills are that come out of TSP and you transferred that amount only. Everything else is budgeted for and in your Stalin. You know what you're dealing with then?

What happens mentally when money gets paid into an overdrawn account? You just don't know where you're at because it's all debt. So you're like, I'm still, oh, if she gets paid $2,000 into a 3,000 account, it goes to $1,000. But then all the bills go out. So I like clean.

So I'd be tempted to go in on your stalling account, get paid into that one, or get paid into your TSPM, just move your way straight in. Try and play clean. And then make a list of how you want to pay this off. Try and optimize that overdraft. You may or may not be able to. If it's snowball, you do the snowball. You do the Natch West overdraft.

You're then going to come. on to next. It's then Zopa. I'm all about optimizing your interest rates if you can while it's doing snowball. But yeah, I think I can't, I think the 90 pound overdraft fees are stressing me out. Because that 90 pound could pay off you very, very quickly. No, I know, but what we're not, we're not talking about doing that first. No, no, but if you did, it's just like 90 pounds doesn't seem like quite a lot to save on your overdraft fees, but 90 pound towards your debt can move things quite quickly. And if you were going to do the snowball, if you're starting low and slow.

You got rid of that overdraft to a credit agreement. Yeah, and she might not be able to. But if she can at any point, that would help. I do always love the snowball. Happy to be challenged on it. But it just does seem to work. And then coming back to the final point, it's a super strict budget. And the save as you earn scheme, you need to stop.

Do your default investing. What is that? So if you work for a particular big company, And you tend to be able to, it depends on what the scheme is, but sometimes you can buy shares in it. So let's say you work for Tesco, you might be able to get staff rates on shares. Okay. And so you save them and then you can sell them later and stuff. And is that?

It's a luxury. Can it be quite volatile or can she like take that out right now and that's her emergency fund? Usually, sorry, it depends on, caveat depends. But usually you can take out if you've got money savings, depending on what type of company is. But at least stop putting money into it. You can't afford it. It's a luxury. People kind of, I'm going to be a bit harsh here, but people like see it as like, see it as like,

a wealth creation opportunity. Yeah. But you can't be over here, like, messing out with debt. And then wanting to make money in the background is quite volatile. It's whatever the company goes bust as well. Like you're savings during one company. That's why we have diverse retirement funds. So the kind of a bonus, you can go back into it.

But let's sort your debt out first. And you, it's hard with someone says, like, I've done it. I've done it. It's been a journey. I fall off the wagon. But there's clearly some like habit, habit changes that are needed. Some direct debits are bouncing. What are those and what can be cut?

I really recommend the money MOT that's in the app in the free e-books. Have a look at that for anyone that wants to kind of start afresh. Like I'm the end of January now and I thought I was doing it. You're probably not doing it. We could probably do the MOT now and go, oh, I've not switched that for ages. Yeah. I don't need that subscription. I'm not optimising that.

It's a really, really good thing to go through in the out of the money MOT to go intense and go as lean as possible because I promise you'll get out the other side. but you need something drastic to really change these numbers so stop putting into the save scheme again that if she's putting 250 a month into the save as you earn scheme or whatever was kind of

that very's gone done and that then goes to your next one and goes to the next one but I've forgotten she needs an emergency fund yeah the emergency fund depends on if she can take a

save as you CS can't say it I can't remember what she called it but she could if she can take money out of that could totally be the... I would at minimum recommend 500 quid something emergency fund because you'll just

use credit. And it's not to dip in by the way because don't use it as an overdraft is what I would say because you've got a habit of dipping into stuff. That emergency fund is ring fenced for an emergency. This is why and to finish I think having the stalling as the

account that she uses for the next budget makes it clean. Because when it's overdraft, it's messy. Whereas if it's clean and there's no overdraft in Starling and it's at zero, it's at zero and all your food's in one pot and your fuels in one pot and everything, you know what you can spend and that gives you like reassurance because you're not straight. Like mentally it's a lot. It's like a fresh start every month. And treat those of the debt. I am so invested. What I would say, and maybe we'll follow up private after this is happy to get

on a call, happy to crunch some numbers because there's a lot of assumptions that we've just made here. So if she, can we do that? Can we follow up with her? And then we might do a follow in a different vault episode a few weeks time. Okay, that is all for a hundred episode of the vault. The vault is now closed. Just a quick disclaimer of the vault is just a chat around life of money topics. We're not giving financial advice.