Saving vs Paying Debt

**Amy**

Hi All

I have been having a think about when i am interest-paying debt free, what to do.

The "interest free" debt is owed to my mum. She is in no real rush for the money, I have owed it to her for a year roughly and made a couple of payments (debt is now £4750 was originally £7K).

I will be interest paying debt free (credit card and loan) by the end of October 2008/beginning of November 2008. I was then going to start paying my mum back, and once that is done start saving money.

However, do you think it would be better to split the payments to my mum (in half) and pay half to a savings account? I wont want the savings until around 2010 when i am going to look at buying a house.

Or should I just pay my mum the money back and then start saving?

x

oxondaemonfeurer

I would personally want to repay my mum as soon as possible to ensure no ill feeling arises and that my 'slate' is clear with her. You never know, she may actually be in need of the money but not wanting to chase you up... Only when you have paid her back will your relationship truely be on an even keel...
If you are desperate to start saving some money too perhaps earn soem extra cash and save that...

My_World

I would definately pay as much as possible in a savings account as this way it would be repaid to your mum quicker if you have a good interest rate. I guess it really depends how you and your mum feel about it. If she's quite happy to wait and your happy to pay it into a savings acc rather than pay it straight to her I would go for it!

well done on how much you've repaid so far!!

xLx

**Amy**

Hmmmm im really unsure as to what to do. I think i need to have a chat with my mum and see where she really stands with the money.

Im thinking I will probably pay her back first, and that way i can declare myself Debt Free eventually.

xx

Bargainfinder_3

I would also say it depends how your mum feels about the money, you could suggest your plan to her and see what she says? Would you have another loan off her as a house deposit in a years time?! If so, maybe best to save and pay, to stop the need for another loan?

**Amy**

Bargainfinder wrote: »

I would also say it depends how your mum feels about the money, you could suggest your plan to her and see what she says? Would you have another loan off her as a house deposit in a years time?! If so, maybe best to save and pay, to stop the need for another loan?

Hi

Nope, i wont borrow from her again (in fact my aim is to not borrow from anyone unless for a mortgage). I will have a decent amount saved up by 2010 (when my CCJ comes off of my credit report) which is when i will be looking to buy.

I think i will just carry on and pay her back. Then if i make any extra money from Quidco/ebay etc. to put that into savings.

rubydoiwannabee

Maybe.... you could come to an agreement with your Mum that you set up a 'new' savings account and pay her money into it, either in her name or with her having the card etc. and agree that the interest is split or is all yours??