To save or not, and how much?

bwgames

At the moment, I currently have quite a bit of debt.

£300 in a nationwide overdraft (~7% i think)
£550 on a 0% credit card for another 6 months or so. CC limit: £1000.
£600 on a natwest student 0% overdraft. OD limit: £1400 (all 0%)

I've just come into some money (£2700), which could pay all of the above off leaving me with about £1000 spare.
I've read the article about whether its best to save or pay debts off, and I'm considering either:

*Paying all the above off, and investing the remaining £1000 or so (in what?). I currently have an e-savings account with nationwide with about 7% interest paying. It currently has the grand sum of £4 in it.

*Paying the nationwide overdraft off, and investing the remaining £2400 or so in something, as the other two debts are 0%.

Now, it would be extremely satisfying to pay them all off, and have my accounts in credit for once, but, I want to be sensible with this money, now that I can get myself out of this hole I dug for myself earlier with all the debt.

However, I do have one big expense coming up at the end of this month, car insurance which will be about £380

So, I'm wondering if there's a way I can milk more money out of the banks by investing this carefully....

Any suggestions would be extremely welcome.

CLAPTON

pay off the debt that costing in interest more than you can gain by saving.
so pay off the n/w overdraft at 7%
as the others are at 0% there is no point is paying them off yet but save the money in the best instant access a/c you can find.
and of course pay these back before the 0% deal run out.


Start doing two things

a. learn about budgetting so you dont get in debt again... a budget includes EVERYTHING you will spend in the next year (12 months) so dont forget about thing like car insurance,tax, servicing, holidays, xmas, presents etc (with yearly things you need to add all these things up, divide by 12 and add it to your budget and save that amount each month so you have it nicely saved up when you need it (and you gain a little bit if interest on the way).

b. learn to read the interest rates properly and know exactly what they are ... nationwide esaver is actually only 5.3% (rising to 5.55% in June) but after tax thats only 4.24%

best of luck

bwgames

Thanks for the info.
I'm planning on paying the OD off then keeping the remainder in a decent account as a emergency fund or something.

I'm just a bit concerned about the tax situation.

Reason I ask is, I'm planning on working over the summer, and getting around £1.5k maybe 2k from that.
The £2700 is a student grant, so as far as I can tell its tax exempt.

Reading http://www.adviceguide.org.uk/index/life/tax/tax-exempt_and_taxable_income.htm I can see that the majority of my income appears to be tax exempt.

My student loan seems to be, my benefits are.
This £2700 is a student grant, so in theory its tax extempt, so the only taxable income I have will be my summer working....

So, I shouldn't have to pay tax on any of this... I think....

Any particular recommendations for a decent account?