Leaving my Job - advice on finances please....

[Deleted User]

Hi all. I have only been reading these threads for a short time and really would welcome some help - my head's buzzing with all the different scenarios!

I have taken voluntary redundancy from work and I finish at the end of March. I will get a salary at the end of April (£2250) and a bonus at the end of May (not got the final figures yet).

My situation is as follows:

Monthly outgoings are £1,149 (excl credit cards - mortgage is £708 of that)
Redundancy package is £50,000
Savings are £6,441
Shares are currently worth £7,612 (thinking about cashing them in)

Debts
Amex £9,732 @ 4.9% for life of balance (£300 / mth)
First Direct Visa £2,350 (was 14.9% but persuaded them yesterday to give me the same rate as new borrowers = 4.9% for 6 months. (was £75 / mth, should ahve come down now)

I'm not sure what to do with the money, what to pay off. where to invest it etc etc

I need to hand my company car back so need to buy a car (although it wont be the same as I have now!!). Thought about getting it on a 0% credit card (Skycard) till Jan then paying off in cash after making interest on the money for approx 9 months. What do you thikn?

I am going to get another (temporary) job as want to go back to university in Sept but wondered if anyone had any good ideas about how to make the best of this money. I dont want to use it for day to day living, so am happy to put it away for longer term. I'll just make myself manage on the money I make from my 'new' job.....all advice is welcome

I also wondered if anyone could advise me on what i need to do re stopping paying interest on my bank account / savings accounts? I have no idea how to go about this?

Sorry - I sound really dumb dont I? I did think long and hard about leaving (the hours, stress and workload just werent worth the money!!!) but I'd really appreciate any pointers you can give me?

Thanks in advance everyone!

PS. I live on my own, so no partner's income to take into consideration.

skintchick

Right - first things first, cut your budget right down and live as if you are unemployed. So no takeaways, no spending loads, etc.

You have a massive payoff (lucky you!) so do something sensible with it.

1 - pay off your debts. 50-12=38

2 - OK, stoozing the car sounds OK, but what's your budget for the car? I'm going to assume 5k max for a second-hand car (mine's two years old and worth that now) 38-5=33

3 - Chuck the rest at your mortgage. Check if you can overpay, and then do so. Use https://www.whatsthecost.co.uk/snowball.aspx to see what a difference it will make cos that mortageg is BIG

OR - Stick it in an ISA or some such high saviongs thing. Don;t know much about them, but make sure you earn more interest than you pay on your mortgage, and then pay off the mortgage later on.

It all depends what wage you'll be earning in the future - personally, I'd rather have no mortgage or as little mortgage as possible, so as to keep outgoings as low as possible, whcih then means you don;t have to earn as much.

But I dont; know about savings/shares/investments etc so please don;t just take my advice!!

Finally - good luck with your future.

[Deleted User]

Thanks Skintchick. It's a mare to know where to start. I've comparing interest rates etc etc, hence why my head's going to explode.

My mortgage isnt too big - £81023, but I reduced the term when I remortgaged, so have less that 12 years on it.

great advice - thanks again....wish MY debt was less than 2k I can tell you!!!

skintchick

And I wish I'd had a 50k payoff when I was made redundant a few weeks ago!

I think you'll get some better advice tomorrow, but definitely pay off the debts, at least then you've only got the mortgage.

Interestingly, if you did pay off the mortage, you'd have one the same size as mine is now, except mine has 22 years to run, and if I could throw £700 a month at it it would be gone soooo quickly!!

I do think it's worth considering, as you have good savings and the shares, and imagine how great it would be to be mortgage free.

southernscouser

Hi wrigleydl!

Definately pay off the credit cards. That goes without saying.

The mortgage is a more tricky one. How you do intend to make the payments when you are redundant?

Perhaps just paying off say £20,000 might be an idea!

brranger

Hi
If you must mess with your mortgage hows about looking at extending the term to reduce the monthly payments in a offset account, putting any remaining redundancy in the saving account to offset, bringing your term back down in real terms but helping with the month to month budget, and also you still have your lump sum insted of saying good bye to it in an overpayment.

Just a thought.
Ranger

CLAPTON

I wonder why you have debts when you have saving/shares approximately equal to your debts....
as every one says pay off the debts anyway
how will your university period be financed?
I think that, after paying of the non mortgage debts, you should draw up a budget in terms of income and outgoings for your period at university before making any decision about using for redundancy/savings
maybe you would wish to post that here for comment.

hope you profit from and enjoy uni whatever else happens

miseter

hi there i was wondering do u work in a place called wilsanco as they r hasnding out rendundensies

[Deleted User]

Hi Miseter

No, didnt work there, was in Comms, but crikey it's become a boring industry

Thanks for the interest - gratefully received.

D

[Deleted User]

Thanks to all who have responded. it's great to have different points of view. I'll try and answer a few questions in the one post.

I have looked into extended the term of my mortgage but was a bit loathe to do so as I worked hard to reduce the term, and there's not a long time left on it really, but still looking at that, so needs must.

On that note I can't pay off a lump sum, but can pay upto £500 / month withour incurring any penalties. I'm tied in to the mortgage (with Nationwide) till Feb 07.

I will still be working and saving hard until I go to Uni, then probably still working some hours a week. Clapton - I certainly will drawn up a budget and post it. I have already shaved about £300 off my outgoings and I know there are more to go.

Thanks very much everyone - it's great to get some impartial advice! :j

Verbatim

Hi wrigleydl,

Quick point. If you pay off your mortgage you'll save oodles of interest. No doubt you're fully aware of that as you said you've already shortened the term (well done!). As you can't pay off a lump sum are you going to stash the cash in a high interest account like ING and pay off the £500 a month extra you're allowed? I'm glad you're getting a healthy pay-off.