Can't Let Go Of Savings

matt4504

Hey everyone,

So I have some debt on two credit cards, Around £3k and nearly £1k in savings. £2k of the debt is 0% and the rest is costing me about £17 a month.

I know that it's stupid to have debt and savings at the same time but I have a psychological attachments to the savings. The £1k debt has only been around for a month (I had to paid loaaaads for the dentist so no crazy spending).

Anyone else been in a similar situation?

Matthew

Bravehearted_2

How much is the debt that isn't 0%?

Perhaps use some of the saving on this?

Tixy

Financially you'll be better off if you use your savings to repay the debt - so the quandry sounds like an emotional one.

How long would it take you to repay the debt that isn't interest free if you don't use your savings?

What will the total interest cost of doing that be? Do you feel it is worth that £x amount of money for you to keep the security net of having your savings?

Are you able to repay your 0% debts before the 0% runs out without using your savings?

January20

If you had a large unexpected bill, how would you pay it if you use your savings to repay part of your debt?

immoral_angeluk

Speaking from experience, although I agree with paying debt with savings in theory, in reality it can lead to trouble having no financial back up to cover unexpected bills. You risk having to put things on credit say when the cat needs a repair, or the washing machine goes kaput and you've got no buffer.

I'd say it's worth having maybe £500-£1000 in savings as a rainy day fund, and then anything surplus to that should be paid off debt IMHO.