What to do with Dads money?

bugbabe1970

Hi everyone,

My dear dad sadly passed away in Dec, something i am still coming to terms with. Due to his passing I have inherited 10 thousand pounds from him. Its the first time I have ever had that kind of money to myself and really want to do the right thing with it. Initially i was just going to put it into savings and not touch it, but i have recently been thinking of paying of some of my debts with it. I know this topic has been covered before, but i would just like to know what some of you think;

The debts i would pay are

Credit Cards: MBNA £1950
RBS £450
Capital One £420
Store Card Next £900
Catalogue Marshall ward £300

Not sure of the interest rates i'd have to look into that but;

These debts cost me a minimum payment of around £250 a month, but I try and pay £10 or £20 0n each over the minimum so that figure is about £300 a month really.

Just want to use the money wisely really. My dad always hated debt, he never had any. But it is nice to have 10k in savings as i was going to keep it for my children to help them through uni/college etc and for any emergencies.

Would apreciate your thoughts

cabbage

Hi

Have a look at what £10k will earn in interest against what the interest rates are on those debts. You will probably come the conclusion that paying off your debts may be the best option. Go onto https://www.nationaldebtline.co.uk and think about making full and final settlements if they let you otherwise pay them off and cut them up and try to do a budget sheet so that you can live within your means.

Then you can put the rest of it away for the kids university fees or something else. A cash isa would be a good place to start, the interest is paid gross and they are usually instant access but there are limits to how much you can put away per year or try one of the children's bond - Clydesdale Bank had a 5 year one paying 5% which you could open in the kids names.

moneysavermum_2

I would definately pay off all of my debts, use this time then to budget my money, so i dont get into debt again. I would then put £5000 or the max limit into my isa from april. Then any left over into another immediate saving account and start saving for the things you want or will need to buy. Get into the habit of saving...putting money away to buy things and not putting it on the credit card. Good Luck with it all...this could be your chance to turn your life around.

IWantToBeFree_2

I would pay your debts, and the use the £250 a month to help build back up to the £10k again.

Tixy

Hi

Sorry to hear about your bereavement. I think in monetary terms it would be good to pay off your debts. The interest you are paying will far exceed what you would earn. Your debts are only just over £4k which will still leave £6k. And of course you can start saving the money you were using to pay off the debts. It should only take a year and a half to grow that pot back up to the £10k.

If you Dad hated debt maybe he would be pleased to have been able to help you get out of your debt. Maybe this in itself will be a helpful incentive to not get into debt again.

And if you have any issues/emergencies in the future you'll have that pot sat there to be used. Much better to use that than credit and you can always repay yourself again to put the pot back up to £10k.

Good luck

heppy23

bugbabe1970 wrote: »

Hi everyone,

My dear dad sadly passed away in Dec, something i am still coming to terms with. Due to his passing I have inherited 10 thousand pounds from him. Its the first time I have ever had that kind of money to myself and really want to do the right thing with it. Initially i was just going to put it into savings and not touch it, but i have recently been thinking of paying of some of my debts with it. I know this topic has been covered before, but i would just like to know what some of you think;

The debts i would pay are

Credit Cards: MBNA £1950
RBS £450
Capital One £420
Store Card Next £900
Catalogue Marshall ward £300

Not sure of the interest rates i'd have to look into that but;

These debts cost me a minimum payment of around £250 a month, but I try and pay £10 or £20 0n each over the minimum so that figure is about £300 a month really.

Just want to use the money wisely really. My dad always hated debt, he never had any. But it is nice to have 10k in savings as i was going to keep it for my children to help them through uni/college etc and for any emergencies.

Would apreciate your thoughts

Are those your only debts? If I were you I would pay them all off and put the rest of the money in savings. You'll be better off each month as you won't have the repayments.

Then learn your lesson and put it behind you. Make a new start with no debts.

I am just starting a DMP and can't wait until it's all sorted and every penny I earn belongs to me.

I am sure your Dad would rather see you happy than sat with the inheritance in the bank while you stress about paying the money each month.

bugbabe1970

Thankyou for your speedy replies.

I think I know deep down what I need to do, its just nice to get other peoples input on my situation.

I decided before my dad died that I needed to sort out my debts and had already cut up my cards so am already committed to not getting into any more debt, and as you say Tixy, it wouldnt take me that long to save the money to get it back up to 10k.

My DH and I have really struggled for money in the past for various reason but we are lucky now that we are both in secure jobs and are able to budget better.

My husband is really useless with money though, he doesnt have any interestat all, he couldnt even tell you how much he earns, he just hands me his pay slip every month!! He said its up to me what I want to do with the money. As much as I apreciate this in some ways, I sometimes wish he would take more of an interest!

bugbabe1970

heppy23 wrote: »

Are those your only debts?

We also have a bank loan for 8k which costs me about £170 a month.

I think ikk hold on to that one though as I really want to keep some of the money for savings. This loan will be paid off in 3 years.

immoral_angeluk

IWantToBeFree wrote: »

I would pay your debts, and the use the £250 a month to help build back up to the £10k again.

Completely agree. I think this would be the sensible option.

savingmummy

Sorry to hear of your loss hunni.
Clearing your debts would be a good thing for you and i`m sure your dad will be very happy with this choice.
Ensure the store cards/cc`s have been cut up and don`t go back to using anymore.

My DH has been very laid back, he don`t understand interest etc and i have had a big talk and sit down and he is now much better. He has even opened up his first ever savings account!!
Maybe worth getting your DH to be a bit more interested, show him a SOA so he knows costs and amounts in black and white.


I agree with pp`s - use the money you would normally put on debt into a savings account to rebuild your inheritance back.
Take care x

mummum2

No brainer really, pay off debts, the money you would have been using for monthly repayment put into savings, before you know it you'll make up 10K and beyond. Good luck with it and truly sorry about your loss.

MM2