DMP - Is it worth trying to pay off faster?

I have approx 13k of debt and a DMP (debt management plan) as I defaulted on minimum payments 2-2.5years ago.  I haven't gone into more debt since - I don't have any access to credit either.

I have a variable income. I spent a while living in my car last year, and my housing situation is tenuous. My physical and mental health and thus capacity fluctuates.

I pay the minimum amount allowed for the DMP - meaning that my debt will be paid off in 9.5years. There is no interest/charges.

I am working towards having a small emergency fund, and the age of my money is around 60days - although I don't have enough forecasted income for the forseeable so in reality in 3 months or so I will be back to 0 days.

Whilst trying to work out a plan and set some goals and think about the debt - if I paid an extra £10-20 a month here and there when I could, or even £50 sometimes, it would change nothing other than bringing the deadline of paying off the DMP forward by a year or two perhaps.  Is there any point? 

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  • I would hold onto that money and build my emergency funds. It's okay to carry debt. Especially with no interest/charges! That allows you to prioritize other things. What's nice about YNAB is it helps you keep track of what exactly you are prioritizing. I would choose something like emergency fund, an extra housing security fund, a fund for physical health and mental health support, keeping your car in good condition, and things like that over paying down the debt. 

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  • I don't see any point when income is insufficient for your expenses. I'd worry about reducing those or increasing income before paying more than agreed.

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  • Good to see you moving ahead in a hard situation. It takes a lot of discipline. I agree- build the emergency fund. Sounds like you have the discipline to build it and not touch it until it is really needed. 

    We paid down a large chunk of debt, and then got to the place where we knew we had to save some more emergency funds before paying off more debt. Listen to your gut- it will guide you. There is no wrong or right way- just what it takes to work for your peace of mind. Sounds like that where you are right now is that a cushion may be what you need. 

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