Save money or put towards debt?

mrso2b

We have brought a house and should be moving in the next few months.

Currently have £15K of debts - manageable but still a monthly burden.

We are on a strict budget from now until we move and no unnecessary spends are allowed.

What should I do with the money we save? Try and hammer down the cards or save in a separate account just in case?

The sale of our current house will cover the solicitors fees, stamp duty, estate agents fees etc.

StopIt

Simply put?


If the money in savings is a better interest rate than the debt interest payments, save it, if not, pay off your debts first. However, you should have an emergency fund especially for unforeseen expenses with your new house.


After all, "saving" money, while paying more interest over time is actually losing money overall.


Long term however, I'd be looking into turning that £15k of debt into £0, and not seeing debt as a monthly payment, but money being taken from your future selves.

mrso2b

Thanks *Stopit*.

The debt is on all 0% credit cards.

I think what I'll do is hammer down the debt and keep the credit card open for any unexpected purchases that we have to make. One of them is on 0% purchases till next September.

I usually do overpay the debt to get it down quicker. We have a couple of months where our nursery fees are going to significantly reduce - we'll have over £1k to save/put towards debt.

enthusiasticsaver

Personally I would prefer the debt to be lower if moving house and taking on a higher mortgage so I would be inclined to do a mix of both. Maybe save half of any spare money you have and put the other half to the credit cards.

If you are going to be tight for moving, legal expenses and so on then having the credit cards at 0% gives you some breathing space to pay it off after you move though

Debtslayer

I would save an amount in an emergency fund and then I would put every penny towards the debts. It may be on 0% but its still debt and means a payment going out every month

mrso2b

Thank you everyone.