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  • FIRST POST
    • Penguin8410
    • By Penguin8410 19th Apr 17, 11:55 AM
    • 80Posts
    • 153Thanks
    Penguin8410
    Come into some money....what to do now?
    • #1
    • 19th Apr 17, 11:55 AM
    Come into some money....what to do now? 19th Apr 17 at 11:55 AM
    We have been put in a very fortunate position where my grandma has given us a large sum of money from her house move.


    She has given us £10k for my girls to share (age 2 and 4) and £30k for us.


    We currently have £33k worth of debts and a £949 service charge bill to pay. We also have no emergency fund, nothing at all in savings.


    Do we pay the whole £30k off on debts? do we use some of it to put an emergency fund aside and pay off less debts?


    You would think that this once in a life time opportunity would have given me a lot of relief but i'm even more stressed and anxious than i was before because i don't want to get it wrong.


    thanks in advance for any advice.


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    Last edited by Former MSE Jessica; 25-04-2017 at 3:47 PM.
    £45438 £0

    Debt free date 19/07/2017

Page 1
    • ringo_24601
    • By ringo_24601 19th Apr 17, 12:06 PM
    • 16,966 Posts
    • 27,570 Thanks
    ringo_24601
    • #2
    • 19th Apr 17, 12:06 PM
    • #2
    • 19th Apr 17, 12:06 PM
    Wow, your finances are a rollercoaster, after browsing your MSE history.. Weren't you only 3k in a debt a few years ago?

    I think you need to use this money in a manner that will keep you afloat better. Pay off that service charge bill, pop £5k in a savings/rainy-day account and pay off a BIG chunk of that debt. Do it in a sensible manner of paying off the highest APRs first. You can then start to clear that debt right down much quicker and begin to live within your means.

    Remember - if you use this money for 'fun' (e.g. a holiday) then you are just borrowing from 'future you' and your children's future. Until you are out of debt, any big purchases are prolonging your borrowing.

    Then start planning better so that you don't get surprised by service charge bills.
    • List Maker
    • By List Maker 19th Apr 17, 12:10 PM
    • 35 Posts
    • 11 Thanks
    List Maker
    • #3
    • 19th Apr 17, 12:10 PM
    • #3
    • 19th Apr 17, 12:10 PM
    That's such a lovely and fortunate position to be in.

    I guess your heart would be saying that it won't come round again, so best to save it. But with measily interest rates at the moment you will be paying more in the long run on your debts.

    Personally I would take £2000 out as the emergency fund, and pay off debts with the rest. With the remaining £5k of debt make a plan and stick to it.

    Set yourself some goals for after you DFD so that you don't get back into old habits.

    Good luck with whatever you choose to do.
    • LindaMary
    • By LindaMary 19th Apr 17, 12:28 PM
    • 177 Posts
    • 76 Thanks
    LindaMary
    • #4
    • 19th Apr 17, 12:28 PM
    • #4
    • 19th Apr 17, 12:28 PM
    Be aware that if gran needs nursing care then the council could claw it back from you. Hopefully she is in good health.
    • enjoyyourshoes
    • By enjoyyourshoes 19th Apr 17, 12:47 PM
    • 721 Posts
    • 905 Thanks
    enjoyyourshoes
    • #5
    • 19th Apr 17, 12:47 PM
    • #5
    • 19th Apr 17, 12:47 PM
    Look in to a raft of regular savings accounts that mature after 1 year and drip feed into them every month, could start all together or stagger?

    S&S ISA if you want to dip your toe into investing, or look at a SIPP if you are short on Pension (tax efficient way of saving for retirement)

    If your debts have increased from £3 to £30 K you have to ask yourself why and get together with other half and resolve the real issue before you plan to do anything with the windfall.

    S&S ISA for the two little one's?
    Debt is a symptom, solve the problem.
    • OneLife_OneShot
    • By OneLife_OneShot 19th Apr 17, 12:48 PM
    • 741 Posts
    • 532 Thanks
    OneLife_OneShot
    • #6
    • 19th Apr 17, 12:48 PM
    • #6
    • 19th Apr 17, 12:48 PM
    I'd pay off the service charge and as much as of the debts as possible while leaving a few grand for a rainy day. But that's me
    CC Debt - Paid £3041 / £3700 - Finishs in Sept 2017
    OD Debt - Paid £1400/£1400 - Finished

    "All truths are easy to understand once they are discovered, the point is to discover them."
    • Penguin8410
    • By Penguin8410 19th Apr 17, 1:04 PM
    • 80 Posts
    • 153 Thanks
    Penguin8410
    • #7
    • 19th Apr 17, 1:04 PM
    • #7
    • 19th Apr 17, 1:04 PM
    Hi Ringo, yes they have been a rollecoaster! we've had redundancies, 2 children and i was signed off work for 6 months with severe anxiety and depression since so have been a bit all over the place and most definitly not prepared! with the service charge we normally pay by direct debit but we have a new management company who have changed things and i would rather get this payment out of the way and then start again with the monthly payments from august which we always did.
    thank you for taking the time to reply.

    Absolutly 100% agree with you about 'fun' things. we have nothing planned on this front as we know that we need to focus on getting the remainder paid off.
    £45438 £0

    Debt free date 19/07/2017

    • Penguin8410
    • By Penguin8410 19th Apr 17, 1:07 PM
    • 80 Posts
    • 153 Thanks
    Penguin8410
    • #8
    • 19th Apr 17, 1:07 PM
    • #8
    • 19th Apr 17, 1:07 PM
    Listmaker, yes we are extremely lucky to be in this position and know it is highly unlikely that this opportunity will arise again!


    i was thinking along the lines of 2k in savings and then paying the rest off. we just want to get as much cleared as possible. goals will definitly be set to make sure we don't get back into this situation again. If you see my reply to ringo you'll see we've had a lot to deal with so want to be prepared more for the future.


    thank you for taking the time to reply
    £45438 £0

    Debt free date 19/07/2017

    • Penguin8410
    • By Penguin8410 19th Apr 17, 1:08 PM
    • 80 Posts
    • 153 Thanks
    Penguin8410
    • #9
    • 19th Apr 17, 1:08 PM
    • #9
    • 19th Apr 17, 1:08 PM
    Lindamary, thank you for the advice. Luckily she is in good health at the moment and has moved into a warden assisted flat. she is also in the fortunate position where she has enough money stashed away to pay if she needs to go into a home, so hopefully we won't be in that sitaution, but i wasn't aware of this so thank you for bringing it to my attention :-)
    £45438 £0

    Debt free date 19/07/2017

    • Penguin8410
    • By Penguin8410 19th Apr 17, 1:12 PM
    • 80 Posts
    • 153 Thanks
    Penguin8410
    enjoyyourshoes thank you for the savings advice. i was a bit stuck with what to do with the girls money as we have never had anything to put away for them. i will look into the s&s isa.


    If you see my reply to ringo you'll see what we've had to deal with which has got us into so much debt so quickly. we have had very frank discussions about what we have done wrong in the past and are making a plan currently to make sure it doesn't happen again. we've been in a flat for 9 years now and with 2 children now also that is a lot of incentive to sort things out and do our best to get somewhere with a garden for our girls. thank you for taking the time to reply.
    £45438 £0

    Debt free date 19/07/2017

    • Penguin8410
    • By Penguin8410 19th Apr 17, 1:12 PM
    • 80 Posts
    • 153 Thanks
    Penguin8410
    thanks one life, that was what i was thinking of doing :-)
    £45438 £0

    Debt free date 19/07/2017

    • nkkingston
    • By nkkingston 19th Apr 17, 2:59 PM
    • 432 Posts
    • 484 Thanks
    nkkingston
    There's some Junior ISAs that has a genuinely good interest rate available at the moment, which could be better (and less likely to wobble up and down) and stocks and shares for them. S&S works best if you drip feed it to take into account any wobbles in the market, which is especially wobbly right now with Brexit and the election, so it's not ideal if you're investing a lump sum. If you only hold back a few grand as an emergency fund (so with an expectation you might need to dip into it at short notice) an interest paying current account and a linked regular saver would make it work hardest for you.
    Mortgage
    June 2016: £93,295
    October 2017: £80,520.19
    • JustAboutThere
    • By JustAboutThere 19th Apr 17, 3:13 PM
    • 507 Posts
    • 2,150 Thanks
    JustAboutThere
    Lindamary, thank you for the advice. Luckily she is in good health at the moment and has moved into a warden assisted flat. she is also in the fortunate position where she has enough money stashed away to pay if she needs to go into a home, so hopefully we won't be in that sitaution, but i wasn't aware of this so thank you for bringing it to my attention :-)
    Originally posted by Penguin8410
    You'll need to check the specifics, but I believe a gift is free and clear if the giver survives another seven years, which hopefully your grandmother will.

    If not, will the money be considered 'disposing of assets' - or whatever the terminology is used these days.

    Good luck with planning your future.
    • spendaholic
    • By spendaholic 19th Apr 17, 3:31 PM
    • 1,430 Posts
    • 7,508 Thanks
    spendaholic
    That's very nice of your grandma.

    I think I'd buy a little something, a keepsake, so I could say "Grandma got us that." I'd put the equivalent of a month's (combined) salary away, and I'd use the rest to chip away at the debts, starting with the service charge bill.

    If you are in a DMP, then you should have zero interest on most if not all of your debts. If you're not in a DMP, I'd consider starting one - you can do it on your own if you don't qualify for assistance, using the tools on this site.

    If you have zero interest on all of your debts, then I'd chip away at the smallest ones. If you have interest on any of your debts, then start with the highest.

    That's what I'd do, and today I cleared 4 debts in one go. (Yes, it felt wonderful!) I have 2 more under £500 that will be next, and then I'll start working on my husband's credit cards as he's paying interest and I'm not.

    Hope that helps.
    Highest debt: £35k (2005); Current debt: £7k (2017)
    July GC: £300 (£75)
    June GC: £375 (£71/£59/£70/£101/£64 = £365)

    MY WINS

    2 tickets to see the Harlem Globetrotters; designer cat food caddy; £2,500 cash; £36 cash; Jesus Christ Superstar tickets + 2 t-shirts; Creative Craft Show tickets; Birmingham City v Barnsley FC tickets; Marillion tickets; Beyond the Pole DVD; £1,000 cash; Legend of the Guardians goody bag; Dancing on Ice tickets; Barnsley FC v Millwall tickets
    • Penguin8410
    • By Penguin8410 19th Apr 17, 4:31 PM
    • 80 Posts
    • 153 Thanks
    Penguin8410
    nkkingston, thanks for the advice. stocks and shares have always worried me a bit probably because i don't really understand them! i'll have a look at the junior isas as we want to be able to add in birthday and christmas money that they get too.


    Justaboutthere, thank you for your advice. yes my mum had said about this. to be honest it's probably unlikely that she will be around in 7 years (she's 87 now) but my mum has said that she has already sorted it out so that she can cover any tax we would incur.


    Spendaholic, yes its so lovely of her. i think she wants to be able to see us all enjoy it while she is around. myself and both my daughters have charm bracelets so i think i will get us each a charm to go on those which can be from her. we don't have a DMP at the minute but having looked at each of our cards today, my boyfriend has one on a 0% deal at the moment, we need to check how much longer is left on it, but it will be the one that we will leave to pay off seperatly.wow well done on paying off 4 debts today!! thats amazing!! good luck with the rest of your journey x
    £45438 £0

    Debt free date 19/07/2017

    • OneLife_OneShot
    • By OneLife_OneShot 19th Apr 17, 4:43 PM
    • 741 Posts
    • 532 Thanks
    OneLife_OneShot
    As someone said I would definitely keep a combined salary for a month or two spare. That is my plan when I am DF in 8 weeks to have money in case something happened in the job market. Still a great position to be in, I hope you make the most of it
    CC Debt - Paid £3041 / £3700 - Finishs in Sept 2017
    OD Debt - Paid £1400/£1400 - Finished

    "All truths are easy to understand once they are discovered, the point is to discover them."
    • maisie cat
    • By maisie cat 19th Apr 17, 5:19 PM
    • 244 Posts
    • 284 Thanks
    maisie cat
    Personally I would pay off the debt, the relief of having no debt will far outweigh the short term euphoria of a holiday or "fun" This is especially important if you've been suffering with anxiety, your health is important!
    The monthly extra cash, which will be a lot with £33k debt, can be used to quickly build a buffer pot up. Worry less about Grandma and care homes, relatively few people need the care and holding onto it "just in case" while having huge debt is not what I would do
    • Number75
    • By Number75 19th Apr 17, 6:45 PM
    • 176 Posts
    • 191 Thanks
    Number75
    I may get shot down here...

    You just mentioned your boyfriend. Not your husband.

    You don't have to answer this here, it's just for you to think about. How good is your relationship? Worst case scenario, you pay off debt that is more his than yours, and find out a week later that he's been seeing your sister all along. Sorry to go a bit soap opera, but it happens!

    It does sound like your debts were jointly accrued, but I'd just say be careful you don't end up paying off ones in his name whilst leaving ones in yours.

    Another thing - whatever you're paying out in debt repayments now? You've learned to live without it... so get that set up as a standing order into a savings account immediately and save save save whilst you're not used to it, until you have a really healthy emergency fund!
    • enthusiasticsaver
    • By enthusiasticsaver 19th Apr 17, 7:21 PM
    • 4,410 Posts
    • 8,179 Thanks
    enthusiasticsaver
    This is very good of your grandma and I can understand you do not want to squander this opportunity.

    First and foremost pay off your service charge and then make a note of all your debts and the interest rates you are paying on them. I would keep an emergency fund of 3 months expenses especially if you are in insecure employment. After the emergency fund is set up then allocate the remainder to the debts in order of the highest interest charging debt first. Once the debt is completely gone then continue to use the money which was going to debt repayment to be saved for a new house or whatever. I would start to keep a spending diary as £33k debt is not an insignificant amount and you don't want to end up in the same position in a few years time so you need to get your overspending in control.
    Countdown to early retirement on 21.12.17 3 months to go.
    • wba31
    • By wba31 20th Apr 17, 9:56 AM
    • 2,149 Posts
    • 1,141 Thanks
    wba31
    contact your creditors for settlement offers? may be that totals less than the £33k you owe to clear in full, and can pay the lot off with some £££ to spare.
    If you were to write to them making settlement offers you ought to declare how much you have to split between them. Then whatever you were paying as monthly payments start to save each month to avoid unnecessary borrowing in future!
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