If you had £800 and my debts, would you..

[Auntnelly]

Pay off Littlewoods -£397 (£95 pm until June 2018)
Furniture - £560 (£16 pm dd until 2022)
Mum - £525 (£75 pm standing order until Sept 2018)

One thing to check before you pay the debts back in full at an early date, is whether there is a clause in the agreement which will charge you an early settlement fee, for instance hire purchase agreements often have this.
If so, do your sums and work out when it is the best time for you to settle the debt, saving you the most money.

Pay the furniture and littlewoods then increase what you pay mum each month.

I'd pay off all of furniture and part of little woods. Will that mean little woods will be cleared as well by May? Then you can save the difference /pay down other debts.

Month 1:
Pay off Littlewoods -£397 (£95 pm until June 2018)
Pay £403 off Mum.

Month 2:
Mum - £102 (£75 pm standing order until Sept 2018) + £95 you were paying Littlewoods... so then Mum is paid back.
Remainder off Furniture

Month 3 onwards
Pay as much off Furniture as possible. At this point you will be putting £168 a month towards this debt (£95 which you were paying Littlewoods, £75 which you were paying Mum, plus the £16 previously agreed with Furniture).

So by Month 6 it will probably be your last payment to Furniture, depending on what they accept as settlement.

This is known as Debt Snowball... as you pay off the smaller loans you free up more money to go to the larger loan.

Then sign a contract with yourself to never take out any debt ever again. Build up an emergency fund of 3 to 6 months of expenses, so if something happens, you have money to pay for it... not going back into debt.

Nannynick has a great suggestion. Imagine being totally debt free within 6mths rather than carrying debt over to 2019, never mind 2022.

You’ve done incredibly well so far and it’s neaely at an end.

I’d pay Littlewoods and £400 to Mum. Then save up the £170 you save each month and pay off the furniture when you have enough.

I know that’s not the financially “correct” way, but if it was an inheritance I’d feel extremely bad still owing my Mum money, and the feeling of paying off that debt would be worth a little extra interest to me.

Pay off debts with highest interest rate first. But maybe double check with mom first. She might be a little put off if she knows you received some money and didn't pay her. Just be transparent about it.

If your Mum needs the money back, then I'd pay her first and use the rest of the inheritance to pay down the furniture. That way you'll only have a bit left in that account and not attracting that much interest.

So Littlewoods are not charging you interest? In that case Mum first, then furniture, then littlewoods, using the debt snowball method nannynick explained.
Whichever way you look at it- debt free is in sight! Amazing!!! Then you can put the whole 168 into your emergency fund for a while, and you're golden.

So the only one charging you interest is furniture? Then definitely definitely clear that one (please please do it this way - I used to work in credit - I have never taken credit excluding mortgage since!)

Then the rest to your mum.

Are you sure Littlewoods isn’t charging you interest though? They used to!

Furniture first, littlewoods then mum (providing she's happy to wait and not needing the money herself)

We were told to disregard interest rates, and to make the biggest payments (or pay off) the smaller debts first then add the smaller debt's payment amount to the larger debt's payment amount so they would be paid off sooner.

Pay off Littlewoods -£397 (£95 pm until June 2018)
Furniture - £560 (£16 pm dd until 2022)
Mum - £525 (£75 pm standing order until Sept 2018)

Pay off Littlewoods. Pay £403 (balance of £800 after paying Littlewoods) to reduce amount to Mum leaving a balance to Mum of £122, which you should be able to pay off the following month based on the total of the Littlewoods payment 95 + her regular payment 75. Then add all three payment amounts together (95 + 75 + 16=£186) and start paying that to Furniture. At £186 per month you'll have the furniture paid off in about three months.

NOTE: I got distracted and am posting this about 20 mins after I typed it so apologies if this suggestion has been made previously

Your Mum, definitely. I think it’s important to show loved ones we cherish and appreciate them every way we can.

Across the pond, disregarding interest rates is bad advice.

I love snowballing!! It feels so good to get ride of the little ones and move on to the next target.

MyDC OP can be 'debt free' in about three months. The interest in this case would be negligible.

Yes, snowballing! Forgot what it was called Ivebeen. DH and I have been debt free (besides the mortgage) for so long I forgot what it was called. But we did it years ago when DH's redundancy and my being put on bed rest got us in to debt.

OP was happy to pay the interest until 2022. They say that paying to that point would cost £110 more. So interest may be less than £30 a year.

The order does not matter that much, what matters is actually doing it - changing mindset, not using debt in the future. Getting out of the cycle of using pay-weekly/pay-monthly things like Littlewoods Catalogue.

Littlewoods - pay them first and you will be better off & improve your credit score.

Pay £100 to mum & over pay her from some of the Littlewoods monthly saving.

Put £200 away for unexpected bill/rainy day.

Let furniture run as £100 interest over 4 years is negligible - but you can save up to pay off early.

Buy something nice with rest of money to remind you of the giver.

There’s done really bad advice on this thread.

Fgs OP please pay off the one with interest first ie the furniture.

newmum there really isn't much "bad" advice on this thread.

The OP's debts will be paid off one way or another within 6 months if she uses her £800 inheritance towards them. The interest she'll pay on the furniture is negligible over that time period. If money has been tight for a while, it might actually be much more sensible to pay off the highest monthly payments first (Littlewoods @£95 per month, then her mum @£75 per month) as then OP will have more flexibility in their montly budget to cope with the unexpected and not have to borrow off family again.

There are more ways than one to skin a cat and situations vary. Highest interest debts first is the most financially advantageous way to do it, but sometimes not the "best" way to do it.

Fgs OP please pay off the one with interest first ie the furniture.

I'm struggling with this too.

Financially there is only one solution, furniture first.

With your £800 inheritance, pay off the furniture first, and then 240 to your Mum.

You are already paying £95 pm to Littlewoods and will be finished by June.
If you pay off £240 of the capital to owe your Mum, then £91 pcm (ie your existing payment plus the £16 pcm from the furniture) then that will be all but paid in June also.

Thus debt free in 3 months. Very short term pain for so much gain from July!
£95+16+75= £186 better off each month from July. Save £100, improve your standard of living by £86.

You should definitely pay the furniture off first. The interest is the greatest there. Check whether it’s allowed without penalties phone them up.

Then you will have £240 left. Use £225 of this to make the payments relating to July August and September now to your mum. That will mean you can keep on with the standing order you have to her and instead of finishing in September, it’ll finish in June 2018. Which, rather neatly is the same time as the Littlewoods debt finishes.

Debt free by June this year. Also it leaves you £15 out of the £800 which you can hang onto in case you are short to make the Littlewoods payment in any of the coming months. At £95 it’s the biggest monthly outgoing, but not the worst deal-that is the furniture.

OP will be debt-free in 3-4 months whatever order they pay it in. That's the point - it's so negligible that OP should do whatever makes the most sense to them.

Hm, you furniture-first crew are only looking at financial costs, there may be a relationship cost to OP putting her mum at the back of the queue, albeit for a couple of months. Only you know whether that is the case though, OP!