Advice please!

I've been OPing for a good while now and doing really well.

However this weekend we've bought a car and at the end of the month we have another big bill to pay.

We have one pot of savings that we've dipped into for the car, so it's taken quite a big hit (17k). but we still have enough that we'd be OK if we needed to pay DH's van finance and settle all business accounts tomorrow (DH is self employed) Plus we know we've got money owed to us that should be coming in very soon, cashflow and all that, which means that the savings pot will soon be on it's way back up.

Now i have another savings account that I like to keep a £2k balance on. Our OP monthly savings go into this. but to pay the other bill we've decided to use £1.5k of it, so just £500 left.

Part of me wants to get it back to the £2k mark before we overpay again, I like that we have that money there, it's instant access. Would take 4mths ish to build it back up to that.

but DH says what's the point? We know we have enough elsewhere that we'd be OK. plus interest rates being what they are it may as well go on the mortgage.

Am I being silly? Should I carry on OPing or save till I'm at my 'happy balance' again?
MFW since March 2008:
March 2008: £126k-ish
Oct 2017: £25k
Slowly chipping away at it!

Replies

  • Danni-RDanni-R Forumite
    641 Posts
    Part of the Furniture 500 Posts Name Dropper Combo Breaker
    Forumite
    Due to your OH being self employed I'd favour getting the £2k back.

    NEVER rely on some money coming in if you can avoid it. You dont know what might happen.

    Its down to personal choice really though.

    Chances are the £2k wont be earning more interest than the mortgage has on it but the feeling that you get by having some savings incase someone doesnt pay on time etc would be good.

    Why dont you take 6 months to build it back up again? that way neither account (op or savings pot) is being ignored?
    [STRIKE]£2200[/STRIKE] [STRIKE]£1950[/STRIKE][STRIKE]£1850[/STRIKE] £1600 on my credit card
    £1200 of £6000 Savings
  • GillybeanGillybean Forumite
    290 Posts
    Part of the Furniture Combo Breaker
    Forumite
    Thanks Danni,

    the cashflow i was talking about is money we know we've got coming to the business. There's a couple of big jobs DH has done and we know they'll pay on time, we've done work for them in the past. So that'll help build the savings up.

    And I think I've made my mind up, I'm going to get the OP pot back up to £2k. Even though it's never used I like the fact that it's there!
    MFW since March 2008:
    March 2008: £126k-ish
    Oct 2017: £25k
    Slowly chipping away at it!
  • Sepa74Sepa74 Forumite
    962 Posts
    Forumite
    Hi Gilly,

    As small business people, you might find that an offset is a good idea when you remortgage. I have one, and I find it really comforting to know that my spare cash is liquid, sitting in savings accounts, but still reducing the interest in the same way the cash would if I locked it away in the mortgage.

    The interest rates tend to be slightly higher, but for people who want / need to have a large proportion of assets in cash, it would probably pay for itself in interest saved and peace of mind.
    Borrowed £150,000 in an offset tracker mortgage in May 2007 - MFD May 2041 (67)

    Jan 2012 - £125,620.02 / 2,913.87 / Nov 2032 (58) :beer:
    Apr 2012 - £122,901.88 / 3,170.91 / Jul 2032 (58)
    Jul 2012 - £122, 589.02 / 3,507.99 / Sept 2032 (58)
    Oct 2012 - £120,476.31 / 3,889.42 / July 2032 (58)
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