Pay off credit card or keep savings conundrum!

Duvetdo

Hi

First post, so please treat me gently!

Just discovered that (at 40) I will be a first-time parent next March.:j

Both of us earn well and have become accustomed to a certain lifestyle that will change radically when one of us doesn't work any more!

We're both very worried about this. We know that many families survive on very small amounts of money, but I think the whole recalibration is what holds the fear for us. I have started using the MSE budget planner, but it isn't finished yet.

Debtwise, apart from a PCP on a car, I have £2500 on a 0% Barclays credit card that the deal expires on in September. I over pay about £40 a month on it at present (total monthly payment £100).

Under normal circumstances I'd just move it to another 0% deal somewhere else and then again until it's paid off, but I have a desire to pay it off now. I do have enough savings to pay it off (leaving me with around £2000 left in various savings (shares, ISA, etc.)

Should I keep a bigger buffer in the bank and keep paying the debt or pay it off and have less to fall back on?

Which option, taking the emotion out of it, would you choose?

Thanks!:D

StuC75

Firstly congratulations, secondly its good to be facing upto those realisations so soon.

Whilst you still have the money offset in savings and its at 0% its more a question of personal preference really..

So much really comes down to what the budget planner suggests.. As to what needs stripping out and what can be managed.

Must admit I was truly amazed at how much Nappies & Baby Formula pushed up the shopping spend (16 months in so cant wait till potty training done!)

AMILLIONDOLLARS

I'd clear the balance, then start rebuilding the savings right away. You'll hitting Christmas before the new baby so you will need to plan for that as well, travel systems, cot, bedding, nappies, clothes.....

Good Luck!

AMD

DavidDebt

Pay of that card and start rebuilding your savings is definitely the way to go!

tlh858

Pay the card, because even keeping at 0% won't be totally free - when you move it to another card, there will most likely be a transfer fee to pay, which will totally wipe out the tiny interest you are getting on the savings.

arcon5

Just echoing the above.. pay it off and rebuild your savings. At least that way when the baby is here you will have more disposable income each month and more money available in case times get tough

paulwellerfan

pay it off in full.....

pqrdef

When heading for a tight patch, you want plenty of savings and plenty of credit. Hang on to your savings, and save as much new money as you can while you can. Stop overpaying on the card, and when the 0% expires, transfer to the longest 0% card you can get.

If you pay off the card, you'll have £2500 less in the bank and no credit. This won't save you any money and won't make you feel any more confident.

greenstreetprince

pay off the card first!

stephane_2

If you can transfer the debt onto another 0% card then I would do that and just pay the minimum & keep saving at the same time. You can never know what the future will bring and having a substantial pot of saving will bring you peace of mind in case a difficult situation arise. In my opinion you should only pay off the debt when it cost you more than saving. And when you feel that your situation is stable then you may want to pay off the debt....

moatmeister

Spend as much as you can on wine, women (or men) and fast cars. Then fritter the rest away. Whilst you still can.

ps good luck!!!!!!!