I have been given £1,000 and don't know what to do with it.

welsh_cake

Can someone please help me.
My grandma passed away last year and she left me £1,000 in her will. I don't want to put it straight into my bank as my overdraft would swallow it up. The money means a lot to me and i don't want to risk loosing any of it, so was wondering if an ISA was the best way to go and which one should i choose.

thanks for your help.

Broke_Student

Hi.

Is your overdraft charging interest? If so then I would recommend that you pay it off as in a roundabout way it will eat up your £1000 anyway as you will end up in more debt!

mahar

i can undersand that the money must mean a lot to you, but if you have an overdraft there is no point starting a new savings account because you will be losing money!

say if your overdraft is 12% APR, and you can open a savings account at max 6% in an ISA, say, then for every £1 you will earn in interest in your new savings account you will pay £2 in overdraft interest - so you will be losing money.

If you put the £1000 in your current account to help pay off your overdraft, you won't be losing money on that £1000.

Its the best thing you can do

(i am assuming u are not a student or recent graduate with an interest-free overdraft here...)

welsh_cake

I get charged £5.00 a month for my overdraft. What you are saying makes so much sense and if it were money from anyone else i would put it straight on my debts, but my grandma was my world and i wanted to go to Africa with the money on safari (maybe next year) and be able to say "thank you Grandma" - this probably sounds so stupid, i wanted something to show for it, but then i suppose if i put it on my overdraft i would have something to show for it too - my head is swimming now. I know my grandma would hate to see me in debt and would rather me pay it, but i feel that once i have put it on the overdraft it is all gone.

freddysmith

The money will be doing more good in paying off your overdraft and you will be benefitting even more from the money in the long term.
If its helping to get you debt free with peace of mind then that is good use of a legacy.

izzwizz_2

I was in exactly the same situation as you a few years ago. Put it towards my overdraft and it gave me enough incentive to work hard to get the rest paid off. Never looked back after that.
Unfortunately, when you're in debt, it's not money you can spend - it's money that's already been spent. The time for safari trips is when you've saved up enough money after you have your debts paid off.
When I look back, I know it was a big turning point in my life; I hope things work out the same for you.
x

izzwizz_2

P.S. Just noticed the link in my sig has disappeared - it was an email address for The Samaritans!!! Can't believe someone took offence at that

welsh_cake

I have had a think over lunch and have decided I am putting the money towards my debts. I will probably cry when i do it, but I think that because the money means so much to me it will make me carry on working on my debts and getting them totally cleared. Thanks for all your advice. its much appreciated.

davetrousers

welsh_cake wrote: »

I have had a think over lunch and have decided I am putting the money towards my debts.

Maybe you could see it as the first step of several to going on Safari.

sparklymessygirl

I'm sure you are doing the right thing fellow Welsh person! I bet your grandmother would love to have known how significant a difference this will make to you in terms of renewing your will to crack the debts. You can still plan for Africa and make it happen.

Good luck
Sparkly

welsh_cake

Yes, once my debts are cleared i will definately be going on safari and it will mean even more to me then and i can still thank my grandma as it will have been her that helped me clear my debts. Thanks everyone you are all great!