Debt with savings.

[Mum2twoUnder4]

I'd like to ask, does anyone think it's sensible that even though I have debt, to have a little savings?

I have around 5k debt, am paying off £200pm. But I have £200 in 'savings' basically an emergency account. Is this sensible?

It's just in case the car fails or something goes wrong that I need to fix.

Or should I put that money into paying off my debt?

Yep sensible. The £200 cushion won't clear your debt in one go. It's much more use to you as an emergency cushion. You're still paying towards your debt as well.

Interesting. We're doing the same. In reality though, I guess it would be cheaper to put any car fails etc on the 0% credit card, but psychologically we don't want to do that. It's setting up good patterns for us to have a bit in savings, and also be paying the debt down. I guess it depends on interest rates on the debt.

Well I am snowballing by debt so it'll take me a little while but I'll get through it all asap.

And I'm putting money into savings each month so I have a little extra for any emergency that may arise. I want to get a £500 buffer and I'll be happy with that.

Think that's too much or enough?

No I think £500 is a good buffer. I would aim for that then plough everything else into debt repayment.

Thank you :)

Though I think my £200 will be dramatically reduced once my car has had its MOT next week