Do I pay this fine or not...

MoneyWaster2007

Hi, I have a fine to pay to the tune of £525.00 remaining. I'm paying this at £25 per week and have 21 weeks remaining. There is no interest charged on this.
I also have £1,056.55 in an ISA, which is paying me 2.23% AER paid monthly, however I only get the monthly interest on this if I do not withdraw any cash in that month.
So my question is, do I dip into my savings and pay the fine off out of this, or do I keep hold of my savings and continue to pay £25 per week until the fine is fully repaid?

talana

Continue as you are. No interest to pay or other implications with this fine that you've mentioned, so it's not costing you any more to pay at £25pw
Take money out of the ISA though and you lose that part of your ISA allowance for good.......and you're earning interest on it!

Not a difficult choice I would say.

MoneyWaster2007

I agree with what you say talana, but recently I have dipped into my savings a couple of times and therefore missed out on the monthly interest. So I was thinking that if I paid the fine off in full and thusly free up an extra £25 a week, I would be more comfortable and not need to draw on my savings.
But having said that, I still think you are right, thanks

snowqueen555

IMO the interest earned is very little on the ISA, personally I'd just clear the debt and get it over with, even if I lose a small sum of money it is worth it to have no debt hanging over me

MoneyWaster2007

hi snowqueen555, I can see what you are saying and it would be a weight off my shoulders to know the fine is settled, but I don't really want my savings to dip below £1,000. Also, I can get by week to week whilst paying the £25, it just makes things a little tighter. But as talana says, there is no interest charged on the £25, whereas I am earning interest on the savings(albeit a small amount).
Also, if I were to lose my job unexpectedly, I would much rather have a 1k cushion behind me as opposed to a 500 pounds cushion...however, I am still not entirely sure what is the right choice....

Marisco

I'd carry on as I was, if you can afford to pay it every week. My partner has debts (ex wife's ones:mad:) that we have been paying off for years, as we only pay the minimum, but we have a very healthy ISA balance;) As you say, its nice to have a bit of a cushion if anything happens. We just let the debts payments chunter along, but we are not fussed about it. If you want to be debt free quickly, then the obvious thing is to pay it off, and if you are comfortable with paying £25 pw, pay it into the ISA, it'll soon mount up;)

MoneyWaster2007

I can afford to pay the £25 pw, but it makes things tighter, as I am on a low wage and live on my own. But I can do it, that's the point. I have 21 weeks remaining until it is fully repaid. I'd love to have that extra £25 pw in my pocket by paying the fine off in full, however if I did that, I would lose out on £525 worth of interest I would earn by keeping the cash in the ISA. Also, if my circumstances were to change ie. I lost my job for whatever reason, I would have a much better cushion to fall back on if I keep things as they are and keep hold of my savings.

So....(deep breath)....I think it is the right choice to pay off the fine in bits as I am doing and live frugally for the next 21 weeks....

....is everyone in agreement with that???

Marisco

Good choice MW - and the way time flies it'll be paid off in no time;)

McKneff

MoneyWaster2007 wrote: »

I can afford to pay the £25 pw, but it makes things tighter, as I am on a low wage and live on my own. But I can do it, that's the point. I have 21 weeks remaining until it is fully repaid. I'd love to have that extra £25 pw in my pocket by paying the fine off in full, however if I did that, I would lose out on £525 worth of interest I would earn by keeping the cash in the ISA. Also, if my circumstances were to change ie. I lost my job for whatever reason, I would have a much better cushion to fall back on if I keep things as they are and keep hold of my savings.

So....(deep breath)....I think it is the right choice to pay off the fine in bits as I am doing and live frugally for the next 21 weeks....

....is everyone in agreement with that???

I can see both points of view but i can understand that you want to feel that 'shoulder dropping' moment of relief when its paid off in full, so yes, i would pay it, whoop with joy, and get on with enjoying your fine free time. Good luck

annie

MoneyWaster2007

pay it off in full? but then my savings would look much less healthy...but then I would be able to save again - albeit a small amount...so you think that is the right choice? I'm getting mixed responses here from different posters....hmmmm:undecided

downnotout

If you lost your job, you souls still have the fine to pay. So a better cushion but a 25 bill? Personally i would pay the debt off and then add to your ISA 25 quid a time instead of just dipping into it now and then