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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Unexpected money gift. Debt or savings.

28 replies

Alpacamabags · 25/12/2019 19:42

We unexpectedly received 2k. Very unusual and not in any way expected.
We have 8k debt interest free. We have no savings and usually this is the reason for being in more debt.
AIBU to save it to avoid this or should I pay some of the debt off?
Should I do a bit of both?

OP posts:
KareyHunt · 25/12/2019 20:58

my debt is interest free and I'm paying it off fine, whereas I'd never be able to save that money

I'm a bit baffled by why one is easier than the other.

anastaisia · 25/12/2019 21:03

Save it in the best interest rate easy access account you can until the end of the interest free period on the debt. Then pay off just in time to shift the remainder with slightly lower fees etc. Even if you only make a couple of pounds interest it’s better than nothing.

Obsidian77 · 25/12/2019 22:25

NoSquirrels is technically right and that's probably in line with most advice you'll get.
My recommendation would still be to clear 2k debt because ;

  1. you'll get fuck all interest on that amount in a savings account
  2. if money is usually tight, that's going to go, perhaps with little to show for it. I don't know anything about you so I can't tell whether on of you is rubbish with money, has addiction issues, routinely underestimates how much things cost, or whether it's just impossible for you to make ends meet
  3. carrying debt you can't easily clear means you're extremely vulnerable to changes in circumstances, whether one of you loses your income, you incur additional expenses, split up or if you start paying interest. Presumably you have the debt on 0% credit cards and are transferring the balance when this period runs out?
  4. based on my own experience, clearing quarter of your debt makes you feel less stressed. But that's based on my own situation. It's great that you've had this windfall, hope it brings you some peace of mind whatever you decide.
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