Redundancy Money

schoey123

Hi there,

I'm being made redundant in Mar-13. I will receive 11k redundancy payment when i leave.

On the assmuption I find another job to start in Apr-13 I'm wondering what to do with the 11k.

At Mar-13 I would have two chunks of debt. 5.7k on an interest free CC (2 years remaining I pay £150 a month towards it) and 8.6k Car loan (repayble in 5 years time I pay fixed £181 per month towards it).

Combined I'm paying £331 debt repayments a month, I have been paying this for 9 months so I can continue with this but i wonder should i pay some debt off or invest the 11k ?

xylophone

If the credit card is interest free, you might as well carry on as you are.
I think I'd be inclined to leave the car loan as it is as well.

You will be just in time to use your cash ISA allowance for this tax year (assuming you haven't already) and in pole position for the next tax year.

This will give you your emergency cash stash?

Stubod

I guess it depends on what other income / outgoings you are likely to have, and what are the chances of getting re-employed, and when.

(Have been there before myself)

I always like to clear any debt, but if it is interest free, then it is more cost effective to put it into the best savings account you can, and then "pay" yourself so much per month, (ie the minumum you think you need to live on and satisfy your loans), and hope you get fixed up before the money runs out.

Investments are too long term, and you may need access to the money sooner.