Clear debt before baby and have no savings, or keep spacing payments? Please help!

[LucyLouLou]

I have received excellent advice from some MNers over on the Lone Parent board which I am grateful for, but this issue is a bit less about the baby so I think this is a more appropriate place for now .

Basically, I don't have many debts, but I pay off things like catalogues and a credit card monthly. In total, I would say I owe around the £2000 mark, possibly less, I haven't added it up accurately yet. I meet my payments okay, but I'm wondering if I should bust my ass and pay it all off before my baby arrives later in the year so that I have a clean slate financially when she joins the world. I pay by direct debit, so I'm not that worried about forgetting payments when I have a newborn to care for, but it's more that I would rather be debt free when I have an expensive small human to raise.

So I'm wondering if anyone has an opinion on this? Should I try my hardest to get the debts cleared by the time of the birth, or should I continue paying monthly amounts, which will go on well after the birth? I am not having to buy all the baby equipment myself (not in a relationship with the father, but he is very involved) so I'm not breaking the bank doing that. I just feel that I would have a weight off my mind if I was free of payments by the time of the birth, but I don't know if it's worth making myself short of money until then.

Any advice? TIA

Depends how much interest you're paying. If it's significant, I think you should pay your debts off as quickly as humanly possible. You won't get any interest on any savings.

I think the credit card is the only thing with significant interest. I'm thinking at the very least, if I pay off the credit card, that would put me in a good position. The catalogues are interest free.

I'd clear the debts before baby arrives, unless you can still meet all your outgoings when on maternity pay/unpaid leave.

If paying off your debts will leave you with no savings at all then maybe pay of the credit card and leave the interest free debt on repayments so that you have some over as nurseries/childminders usually require a deposit upfront for when you return to work.

I would really love to pay it all off, but I'm just concerned about leaving myself with nothing or very little. I think I will do the CC and then try to pay some extra with the rest so that I'm reducing it quicker.

We are lucky, we won't have to use nurseries or childminders as we have two sets of grandparents who will provide free care () for the days I am at work (I will go back part time to my NHS job, my baby's father is a teacher, he works full time).

To be honest I wouldn't worry about it too much or just try to pay a bit more each month so it is paid off quicker, babies are not too expensive if you are not paying for childcare.

If your 'monthly payments' are the minimum then do as much as you can to pay the cards off earlier. There's a stark example on the Martyn Lewis site 'moneysavingexpert.com' website on how long it takes to pay back just a few thousand if you only pay the minimum. Years and years, basically.

Even if you can only pay an extra £50 or £100 it's worth it. And that would be true whether or not you had a baby.

I already do pay above the minimum, it's just that I don't think I really want to put myself up shit creek by trying to pay everything before the baby arrives. I really want to be debt free, but not if it's going to cripple me financially. It would probably involve using all my savings (don't have much put by as wasn't planning to have a baby yet, she is a lovely surprise!). I would really rather have a little bit kept to one side just in case any big expense comes up. My DD's father is splitting baby costs with me (posted more about this on the Lone Parent board) but I'd like to have a small amount set aside myself. Anyone who has read my post on the LP board will know I don't really like taking money from other people so I don't want DD's dad to have to pay more than 50% just because I wanted to be debt free. Does that make sense?

Defintely try and pay off the interest bearing credit card and leave the interest free catalogue payments to pay off over time so that you leave yourself with some spare in case of emergencies and don't have to resort to using credit card for those.

Don't forget to apply for your child benefit as soon as the baby is born - if you delay for too long they can't back date it (if i recall correctly!).