Birthday money - spend, save or debt

must.try.harder

Hi

I am new to these boards but have been chipping off the debt for a few months now.

It was my birthday last weekend and my mum generously gave me £200 as a birthday gift (turns out your never too old for money off your parents)

Anyway, I am really torn with what to do with it. There is nothing that I immediately need (and I have been getting used to only purchasing things i really need), but I know my mum gave it to me to enjoy.

So my question is, do I spend it on something nice that I don't need, save it for when there is something I need or REALLY want or use it to pay off my debt? Or a combination?

Part of me wants to pay a chunk off my debt, but the other part knows that there is such a long way to go of paying off debt and not having treats that I deserve to have something new on my birthday.

I would really appreciate any advice on what everyone else would do?:)

Thanks for your help!

xxx

moohound

I would save for an emergency, make sure it is stashed where you can't get at it too easily.

Lensman_2

Life on the debt treadmill can be hard work.

So I am with your Mum. Treat yourself.

katy_ann

I would treat yourself as your mum would want you to enjoy it x

skogar

How about hedging your bets. Do you have an emergency fund. I find mine a lifesaver - no panicing when you get a sudden unexpected expense - car needing work etc. If I didn't have one I'd probably put most of it in there.

So one suggestion would be to use a propotion for a nice treat. You decide how much but it should be something really nice (doesn't have to be expensive but should feel like an indulgence). If it was me I'd be going for £20 - £50 on the treat and then put the rest in my emergency fund. You can always tell your Mum that you have done / bought such and such but you're saving the rest of the money because you don't think you need anything at the moment and you want to put it towards something you really want / need in the future.

Sometimes you just don't see something you want enough when you are given Christmas / birthday money. I am often given Christmas money by OH's parents. I always save it (often for months) for something I really want / need. Often it is September before I have spent it but I always tell them what I have bought / spent it on / put it towards. A fantastic new sleeping bag, a lovely picture etc. etc. it is all really useful / nice things that I love and much better than frittering it away.

So think about the options and decide what you want to do with it most and if you decide to treat yourself now enjoy it - remember there are times when everyone needs a treat!

PlymouthMaid

I would definitely spend some of it on a treat but wait until there is something you actually want otherwise it seem kind of wasted if just frittered. Pay some of a debt perhaps or emergency fund so you dont feel too wasteful. Then tell Mum what you buy - maybe you get such a great bargain on something it will look like you spent it all anyway.

Monkeyballs

Unless you don't trust yourself to not waste it then treat yourself to something you like (maybe a nice bottle of red wine?) which can be your "present"and then keep the rest in the bank

Or, as you don't mention about being on a DMP I'm assuming that you're just working your way through the debt in which case why not pay it off a card on the proviso that if you see something you fancy you won't begrudge using your card to cover it? That way, it's a little less interest on your cards and if you don't use it then you're a bit closer to your DFD!

Happy birthday for last weekend btw

MB

mandragora_2

Getting out of debt would be a treat I'd want for my kids. If I could help them along the way, so much the better. If that's what you want to do, ask her how she'd feel about it. A week out of debt earlier, is a week of life enjoyed earlier.

TrustyOven

You dont have to spend it all on one thing.

You reminded me of this post: http://www.underthemoneytree.com/household-savings-ratios/

Have a look towards the bottom of the post (before the comments), where the author talks about 33% Reducing debt, 33% ISA and 33% pension.

I'd be inclined to suggest (adjust depending on your situation): 33% treat, 33% debt reduction, 33% towards emergency fund.

Or similar allocation. That way you get all 3. And if you do this for all windfalls (I've just started doing something like that), it could be a great habit that helps you a lot in the long-run.

LionessInWinter

I would save £50, spend £30-50 on something you want and the rest towards debt.

shinner

Hi I personally would get rid of overdraft. How much does it cost you a month ? Getting rid of mine was amazing and helped me focus. With the remainder I would have a small treat maybe a nice meal. I would then give back to my mum remainder to look after until I need it. I have a box at my mum's I can take out whenever I want but usually don't touch it. I saved £400 without realising.