Debt & savings; pay it off?

jago25_98

Last year I had 90% of my savings with an investment company I had them with. The remaining 10% I had in Gold. In addition to this I borrowed another 12% from Zopa to add to the investment. (mistake!) Unfortunately the 90% savings got frozen by the FSA in an investigation into the company. So while on paper to the tax man I appear to be in the black by +98%... ...in a practical sense I'm actually in the red by 2%, because the gold savings I have access to don't cover quite the debt. Now, the thing is, if I clear the debt with my savings with an early repayment to save interest charges (no other charges to think about, it's straightforward)... I still have a remaining 2% debt, so I would be reliant on my job to pay that off with no breathing space. So, should I pay it off to save paying interest and keep things simple? -but have no savings at all. Or should I keep my savings, because it could act as a cushion that can pay off the payments should I run into trouble, bearing in mind that, while I personally don't expect gold to increase at 11% apr, I do feel safe enough with it to take some risk. In addition, I have, in a sense, funds free should I see an opportunity of some sort. On the one hand having no cash spare is a good discipline, but it wouldn't allow me much room to maneuver should I need some cash.

WRINKLES

jago25_98 wrote: »

Last year I had 90% of my savings with an investment company I had them with. The remaining 10% I had in Gold. In addition to this I borrowed another 12% from Zopa to add to the investment. (mistake!) Unfortunately the 90% savings got frozen by the FSA in an investigation into the company. So while on paper to the tax man I appear to be in the black by +98%... ...in a practical sense I'm actually in the red by 2%, because the gold savings I have access to don't cover quite the debt. Now, the thing is, if I clear the debt with my savings with an early repayment to save interest charges (no other charges to think about, it's straightforward)... I still have a remaining 2% debt, so I would be reliant on my job to pay that off with no breathing space. So, should I pay it off to save paying interest and keep things simple? -but have no savings at all. Or should I keep my savings, because it could act as a cushion that can pay off the payments should I run into trouble, bearing in mind that, while I personally don't expect gold to increase at 11% apr, I do feel safe enough with it to take some risk. In addition, I have, in a sense, funds free should I see an opportunity of some sort. On the one hand having no cash spare is a good discipline, but it wouldn't allow me much room to maneuver should I need some cash.

Keep some cash you may need to buy a washing machine.