what to do with unexpected money?

katie4

As title suggests we have come into some money not a great deal its around £400 but we can't decided what our best option is to do with it. any advise appreciated thanks


opt1: put it onto pay off some of our credit card


opt2: we have £800 left on a loan this is costing us £200 a month, we pay the £400 into this and then we free up that £200 a month earlier to put towards paying off our credit cards


opt 3: pay off £200 owing on catalogue (which is currently interest free) and then save the other £200 to put towards Christmas gifts. the not so sensible option I know but we always struggle when it comes to Christmas presents for the kids

Willing2Learn

Hi,

If it was me, I would put the money into the debt with the highest interest rate as that would be the best saving.

Golightly72

If it won't make much of a dent in the credit card, and you can pay back the catalogue before the interest free runs out, I would personally pay off half the loan, finish that early to save on that interest (assuming it wasn't front loaded), then use the £200 you would have paid on that in October and November to buy Christmas presents with, if you have nothing else saved.

beanielou

If it was me I would pay it off the loan.
When the loan finishes early then pay the 200 for loan to the catalogue.
Could you start doing surveys to get vouchers to help to pay for Christmas?

Rufman98

Hi,

I'm new to posting but have been here over 10 years !!!128512;!!!128077;

Pay off your most expensive debts 1st because;

A)your most expensive debts don't know you've received unexpected money and will still be there, gaining interest regardless and

if the more expensive debt was, say, twice the interest then every £1 you pay off on the cheaper debt is cancelled out by the more expensive one (it's a crude financial comparison but you get what I mean !!!128514;)

IMHO, pay the dearer debt but keep anything from the price of an ice-cream to a nice meal out to celebrate the fact it's an expensive debt or part of a debt less to worry about

GL!

Elmo_luvs_you

Maybe £200 toward the loan, £100 towards the credit card and £100 towards Christmas?


Slightly off topic, and I know nothing about your kids so this may be completely irrelevant - but my parents and I have a very strict Christmas budget which seems crazy but is actually a lot of fun.
I spend £2 (yes, two pounds, that's not a typo) each on them, and they each spend £2 on me. We get stuff from charity shops, eBay (you can get things for pennies from China but they can take as long as 2 months to be delivered). E.g. last year I got my dad a multi-tool keyring, a mosquito net hat, a travel pill/bits n bobs box and a comedy dvd. And the year before I used the OLIO food sharing app and got a hoard of snacks that were leftover from a food festival for free - and made up a hamper for them and gave my mum a nail polish I got free in a magazine

kazwookie

Option 2 pay some of it off

Rufman98

Hi again,

You didn't include info such as credit card Apr, when your catalogue 0% runs out and what your Apr on the loan is. I still think paying the most expensive is the best way, barring immediate financial priorities (like rent arrears).

If you were able to post these details formites could give you a very tailored response.

Again, GL

Clouds88

Aww I Love that Elmo! We do £10 budget but having a lower amount and utilising charity shops ect sounds like an excellent idea. I!!!8217;ve already bought some presents for my family in the jan sales and I!!!8217;ll just do my husband a stocking.

WIth the topic of Christmas I love it sooo much but used to always get carried away, but with my new debt free life I!!!8217;m excited to spend a lot less whilst still giving them a good time.

trailingspouse

I know it's nice to give the kids lots of things at Christmas. But it's even nicer not to have to worry about where the next month's rent is coming from. The kids will survive a low-budget Christmas. Fun is free.



If they're very little, they won't care. If they're older, this is your chance to give them a lesson on money management that will stay with them all of their lives - learning to say 'No, I can't afford that.'


Put the £400 towards paying off your highest-interest debt.

Daniel1971

What is your total debt level? A lump sum of anything from 3k upwards can potentially be used to settle a very large amount of debt in a full and final