Need some advice.

Skint_Catt

I think I know what most of you will say, but this is my situation at the moment.

I have been unemployed since 4 Jan (hopefully shortish term!) so no current income.

Current A/C
Am £400 overdrawn after xmas and this months bills have gone out.

Savings
Have £270 in cahoot saving - 4.9%?? (Prob lower rate than that!)
Have £5680 in ISA - 5.63%

Debts
Have £322.00 on Cahoot loan at 14.9%
Have £590.00 on M&S CC at 16.9%
Have £2400 on Halifax CC at 0% until Oct (no more space to transfer onto)

Trying to eBay stuff at the moment, but with the rates rising, I wondered if it was worth paying of all my debts with my savings (but I hate the idea of losing such a chunk of my savings) or at least taking out the £912 from my ISA to pay off my Cahoot loan and M&S card?

What do people think????

pollyanna24

Me personally would use all your savings to service your debts. It is hard letting go of savings, but that's what I would do. I had a nice little nest egg growing, but then I also had a loan. I realised I was being silly and paid off the loan. Start again from scratch once you have no debts and save like mad. Just think, you won't be wasting any money each month on debt repayment and you can just watch your savings grow!

CLAPTON

i would use the cahoot saving first and then withdraw the balance to pay off the cahoot loan and the M&S and assuming the overedraft is not 0% pay that off as well...no point paying 16.9% and earning 5%.

presumably you are claiming JSA whilst your unemployed?

OberonSH

After paying everything off you'll still be left with £2,200ish. That's not bad at all! Plus any money you make from Ebay. Depandant on what your SOA looks like, that should keep you going for a few months until you find a job.

Skint_Catt

No, I'm not entitled to JSA as I made myself unemployed. One of my more impulsive, lesser thought through moves, but my job was nearly at the end of it's contract and I the boss didn't like the suggestions I put forward for improvement so I told him I couldn't work for him anymore.

My overdraft isn't really a problem. I believe the first £500 or £1000 is 0%, but it's my M&S card and Cahoot loan that are bothering me really what with all the interest rises etc.

The cahoot savings is towards my MOT which is due in 4 weeks time, and towards my Road Tax in June (£175).

bank_of_slate

Hi Catt,
could you use some of your savings to clear 2 of the debts until you can get another job sorted out?
This clears some and leaves you (hopefully) with a little extra to pay the 3rd debt and some savings left.
I wouldn't wipe out the savings in case you don't get work as quickly.
Welcome to the board babe, let us know how it all goes
...Linda xx

Skint_Catt

Thanks Linda.

Yes my first instinct wasjust to pay the £912 off my two highest debts. When I get a job the 0% shouldn't be a problem to get rid of by the end of the year - esp if I get a job at the salary I'm looking for!

Just wanted advice as to whether this was the right thing to do!

S_C

Emmzi

Persoanlly I would keep the savings until I got a new job, paying the minimum, then once I was employed again, pay them off. You may be 3, 6 months unemployed (hopefully not!) but hope for the best and plan for the worst.

Then you need to work on building a new emergency fund pdq..

Skint_Catt

That was why I'm asking the question Emmzi. I was unemployed for 4m last summer - pretty much down to my own lack of a**e kicking and lethargy. However, this time, I'm more on top with two interviews in the next 4days.

I'm torn between paying the min until I get a job and can pay my savings back quicker, or just getting rid of the two debts now, so I don't have to pay anything out on them next month while I'm catching up!

S_C

Sammz

I'd get rid of those with interest straight away. They aren't high amounts and will still leave you a decent amount of savings to live on. I'd also be tempted to keep at least one of the cards "just in case" if you know you can be good with it.

Skint_Catt

I already have some empty cards that I know I can be good with cause it's taken me long enough to pay them off!

I'll just decide on the one with the best cashback/benefits and close the others then!

Many thanks to all that have posted! just needed some feedback to get it straight in my head!

S_C