£12,000.- in debt & 10,500. in savings!

ifstar

Do you mean your credit card has a balance of £1400 and the Next directory is £600 so your car loan must be around £10,000 then?

If you are getting charged on the Next account then you should pay that off ASAP. What sort of amount do you normally spend on this per month on buying new things?

The interest rate on the car loan is more than your ISA's so it doesn't really make sense not to pay off this early. I am pretty sure you can pay it back without penalty but you should check this.

You also said that you didn't think that you would save the £300 pm if you paid off these early, you need to try and get out of that mindset otherwise you will probably just go round in circles. There are ways round this like setting up a standing order to move a chunk of money straight after pay day, this way it won't ever sit in your regular bank account for long enough to be noticed.

Personally I would pay off the next directory and try and cut down on spending on it and would pay off as much of the car loan as possible.
Once you have done this, concentrate in trying to get the car loan finished next while making the minimum payments to the credit card. When the car loan is finished you could either a) try and pay the credit card off as quick as possible or b) pay off the credit card by a bit more than the minimum but put the rest in savings something like a £100/£200 split. When the 0% comes up then you can transfer the balance again to another 0% or you could pay it out your savings if you wanted.

I know you think that you won't be able to keep saving but your goal will be to make a good amount for a deposit or just for family security.

Dumyat

personally I would pay some of the higher interest debts and keep some back as emergency fund.

bikerqueen

do nothing until you can stop spending on things you dont need at next (and elsewhere of course) otherwise you could find yourself with no savings and a huge bill again.

Do you need a 10 grand car? could you downgrade, pay it off and keep a chunk of your savings?

wherediditallgo

I can understand why you'd feel the need to have some cash readily available, but there are ways to pay off some off your debts & still have that emergency fund. In your shoes I'd pay off at least £5k off whatever is charging you the highest interest. I'd then set up a standing order to put aside whatever you'd have been paying in repayments into a savings account paying decent interest - if it gets taken out of your main account within a couple of days of payday you won't have a chance to see it & be tempted to spend it.

I would keep a certain amount (say £2k) in an easily-accessible account, as with the children things can be unpredictable, but make it one where you have to give at least a few days notice so that you're not tempted to pop into the branch to get the money. I think to have over £10k in savings yet probably be paying out more in interest than you're earning isn't helping you to get the security that you want for yourself & your family.

lauren_1

I would pay off as much as your savings would allow you to, then set up a regular saver (5-6%) so a direct debit automatically takes it out of your account usually they allow a £300 max a month, you know it makes sense to let your money grow rather than paying off extortionate intrest charges.
It wont take you long to rebuild that amount.

immoral_angeluk

I would pay off the debt. I'd rather feel secure knowing that I was pretty much debt free than have money in savings.
As for the car loan, have you asked them if there's an early settlement figure?? This should be less than the loan amount because of the way interest is added depending on your agreement.

woohoo_postingid

Why not work really hard at knocking £1500 off the debt so that both debts and savings are equal and then use the savings to clear whats left.

I imagine spending all your savings and then realising you still have debts could be a bit downheartening so why not do it the other way round (if that makes sense)

chick-chick

I'd pay off the debt, then you can start saving what you'd normally put on debt :money:

treasureirealnds

trouble is u lose so much money on cars. did think of down grading but it wouldn't sell for as much as i owe!

Also spoke to Tesco loans. Asked if i could pay half of what i owe, they said no. in full or carry on as you are.

ifstar

If it was me then I would pay off the next directory now then probably try and save as much as I can so that I could pay off the car loan in full asap. This shouldn't take too long as it's only £600 from your £10,000 savings as opposed to if you paid off the 0% card at this time too.

Once you have done this then you can make the minimum payments on the 0% card and put the remainder into savings. When the 0% period comes to an end then either transfer the balance elsewhere (and destory the old card - most important as many people start using cards they have cleared off) or pay off the 0% card out of the money you have saved up.