Tortoise or the hare?

sourcrates

Are you due any redundancy money at all ?

or was that the 3 months pay ?

Because, if you are employed continuously for two years or longer, you are entitled to a weeks pay for every year you have worked there, this goes up to 1.5 weeks pay if over five years, i believe.

LittleDutchgirl

Hi Fyreworm
I'm delighted that everything has worked out for you - it must have been a stressful time but good things can come out of unpleasant situations.
I've been debt busting and made the decision that if the debt was on 0% and I knew I could pay it off then I could hold some savings but also to spend some money on the house. I totally get the urge to pay off debts as quickly as possible and realistically you're going to be fine either way. There isn't a right or wrong answer but just make sure that all those debt busting skills don't get lost in your new found wealth.
LDg

FireWyrm

sourcrates wrote: »

Are you due any redundancy money at all ?

or was that the 3 months pay ?

Because, if you are employed continuously for two years or longer, you are entitled to a weeks pay for every year you have worked there, this goes up to 1.5 weeks pay if over five years, i believe.

Ah yes, the payment was satisfactory believe me. They only owed me 2 months notice and in fact paid me three. I have been on garden leave and I am entirely free to work for anyone else I wish whenever I wish. The final month was also a 'settlement' as part of a compromise agreement and so it tax free also. They also paid for an employment solicitor to look over the agreement for me and give his opinion. There is nothing untoward here and the settlement is more than generous and especially in light of the fact that securing a new position was never in doubt. I also got a written reference and this is a very small and niche business and so my ex-MD has been singing my praises to his contacts. The phone was ringing off the hook with employment opportunities.

Firewalker

I'd vote for 'hare'. It would have been another matter entirely if your debts were on interest. But having these on 0% means that you can use the money you've got as a buffer (very important psychologically as well): just make sure it is in an account you can access easily but still brings some interest.

Firewalker

andyfromotley

On an optimistic note fire, roofs that have been repaired tend to go on much longer than expected. Yes they look a mess and need doing, hanging over you (geddit?) until you have em replaced, but like much loved old dogs they are capable of going on for years. Fingers crossed.

elly68

Im selling our caravan this weekend ,we are keeping £1000 as emergency fund and the rest is going straight to a card as i know we would just fritter it away,husband getting a payrise on 17 next month i have already increased payment to match we are managing as we are without it ,cant wait to be debt free .To be honest i would clear and then set up standing order direct to mortgage for cc payment then you can rest on your laurels you have done fab imagine how much of a dent 8 months cc payments are going to make to your mortgage

FireWyrm

elly68 wrote: »

.To be honest i would clear and then set up standing order direct to mortgage for cc payment then you can rest on your laurels you have done fab imagine how much of a dent 8 months cc payments are going to make to your mortgage

This was my thought exactly. I once calculated it out and if you knock 10 years off a mortgage, you 'save' around £87K in interest. This seems to me to be the best option instead of a pension. I want to save into one, but realistically speaking, I think I can do better with a investments and property than a traditional pension as such. The best I can do is simply ensure that what money we have is used to the best potential and for that YNAB is the best option and it works. Next year, I want to tackle the various household tasks and then start hammering the mortgage as fast as possible. Once that is gone, then it will save £500 a month at least.

runforlife

Yayyy! Congratulations on your soon to be debt free day. I have to say that on your shoes I would get rid of the heavy millstone around my neck. It's true you are on the ball with your finances and if like me, as things improve I find spending money rather painful now!
Couple of practical suggestions. Boiler - get some people in for quotes. I am sure they will all be different.
Bulbs for your kitchen. Cheapest place I have found locally is Home Bargains! though often local electrical retailers can be better value than the 'Sheds'. And the internet of course (but somehow sending bulbs through the post worries me).
Good luck

Windofchange

I am doing the same journey as you, and have a similar decision. No lump sum for me like you have had, but I have been tucking away cash under the bed for selling things on eBay and other such endeavours.

It has amassed to a couple of grand I discovered the other day. Now, I could hang onto it for a buffer, or I could spend it on the debt.

I have chosen to get the debt paid down. As with you, my debt is nearly all now on 0% deals, so no benefit to paying it off now, but it is 100% psychological. I am so determined to be debt free by xmas this year, and am throwing everything at this. Will be updating my progress shortly on the other thread, but it feels great to get rid of all these debts I have had round my neck for far too long.

I have three letters to send off tomorrow morning to credit card companies requesting them to close my accounts.

Purplesky_2

Congratulations! Being 'debt-neutral' must be an amazing feeling.

With the mortgage vs pension debate, I would say that as a 40% tax payer, you would only need to put £60 of your pay packet into one to get £100 into the pot. That's difficult to pass up, I would say. And you may want to check your employer contributions. If they give you £50 a month (which would be quite low, if they offer a workplace pension), then for £60 of your own money, you could be getting (in this example) £150.
You would have to be the best investor in the world to get a 40% bump consistently.

You're coping on the lower salary and paying down debt even. You could spend a few months building emergency savings, then
-use the money you're currently using to pay down debt as 'fun money'
-pay £120 into a pension (to get at least £200 in your pot, just from tax)
-pay £250 a month on your mortgage. Check the calculator. I imagine, this would decrease your total interest considerably
-still have £130 a month to continue saving

Then your £500 pay rise is working really really hard - I'm assuming £500/month is net of tax, which it may not be. If not, you could tweak the above; £100 net going into your pension is still £167 total, £200 on the mortgage will still go an awfully long way and £100 saved is still enough to keep going. A few free days out and maybe some of your 'fun money' can be used for a boiler or something.

Looking forward, your future is bright with all your new skills!