What will you save when your debt free ?

Spendi

I was just sitting here dreaming of what im going to save when im debt free and i have no idea !

I know that i will put the money i use towards debt repayments now into savings so they dont get used up on *stuff*, i figure ive lived without the money now for so long i wont miss it when im debt free, but its nearly £500 a month

So what % of your current debt payments will you plan on putting into savings when your DF ?

Storm

Well, I'm basically planning on saving the same amount that I currently put towards my debts (varies quite wildly at the moment), although I'll have different savings pots going such as - mortgage deposit, holiday, new car. The mortgage one will be a standard amount each month (and in an account that I can't get to quickly!) so I'll be more motivated to continue Ebaying etc to put money into the holiday & car accounts.

Having said all that, I am planning that the first month after I've paid everything off I'll not save a penny - just so I can treat myself for becoming DF.

immoral_angeluk

Holiday or house deposit I reckon.

chevalier

The great god Martin (!) Suggests first off saving the equivalent of 3 months salary (say in an isa) so that if you were suddenly unemployed you would have a cushion to keep you going until you got other employment. So I would put 100% of your £500 away until you reached that sort of total.

Then after that I am not sure. I guess the next thing would be to save for the boilier blowing up up or the engine on a car, so again quite a high amount (but in a different account?)

Once you have these contingencies covered, it is really the case of planning what you want to do over the next 12 months. Eg do you want to have a nice holiday in that 12 months. In that case save say 80% for that until you have enough. That would leave you 100 a month to say renew your wardrobe if you haven't bought any clothes for a few years (like me!).

The other thing to do with the savings is to look for some way of paying towards your old age - do you have a pension? Or if you are currently on an interest only mortgage to change this to repayment. You could shorten your mortgage term by alot by overpaying on that every month.
hope this helps
chev

immoral_angeluk

chevalier wrote: »

The great god Martin (!) Suggests first off saving the equivalent of 3 months salary (say in an isa) so that if you were suddenly unemployed you would have a cushion to keep you going until you got other employment. So I would put 100% of your £500 away until you reached that sort of total.

chev

Oooh actually that's a good idea I'd do that first before the holiday or house deposit

angelavdavis

Stick £3k in an ISA every year, £2k a year into a NS&I bond (2 or 3 year) and then overpay my mortgage so its paid off within the next five years.

I will then start investing in property.

Shineyhappy

When all the ccs and overdraft and bf are paid back, I am going to save 150 pounds a month and then I am going to pay off the secured loan, but I think I may only be able to pay 10% off that as it is an additional mortgage. If thats true then I will start chipping away at the main mortgage. I can pay 10% of that a year although I wish I could afford to pay back the full 10% of 14k!

nickelodeon

I put about £500 towards debt each month at the moment and am living on quite a tight budget so would definitely use some of the money to buy clothes etc once debt free, but I think I would still save about £400 so 80%. Savings will be for a new kitchen and maybe overpayments on my mortgage!

nevadagirl

Once I'm debt free, I'll be getting some money behind me for when I'm married (9 months after my DFD) so we can afford to think about having a baby. Or eventually downshift careers completely. Half my wages are going on debt just now, so there's nothing to stop me going part time, or maybe getting a less stressful job.

newlywed

Savings will be as much as I possibly can (hopefully 75% of that going to debt currently),for:-

Emergency fund,
A skiing holiday,
A beach holiday,
A car that isn't a rust heap!

Not necessarily in that order though

racer256

I hope to set up an emergency fund and then try and get on the property ladder. I want to start doing more hobbies such as racing professionally and that is expensive in itself!!