What to do next
Hope everyone is safe and well during this difficult time. Just wanted someone to give me some perspective and maybe some advice on what to do next. My situation is I will be made redundant on 31/12/2020 and I will receive £16000. I am lucky enough to have secured another job on roughly the same income as before starting 04/01/2021. I've made some bad choices however and have a mess to clean up and am stressing about it. In addition to redundancy we have £1k savings and we have a daughter aged 4 and we have saved £3k for her so far with the aim of having £10,000 when she's 18 to try and help her with a first car or whatever is needed at the time. We have £38000 left on the mortgage, I'm 33 and my partner is 30.
Due to my partner attending university we have about £25000 of debt which is made up of a loan, credit card debt, a car loan and a sofa payment. This was living as frugally as we could throughout there just wasn't enough money on one income and bursary and a bad decision in hindsight but I cant take it back now. The good news is she's now qualified however and has been working about a year so between us we make about £50,000 now gross. The situation was actually worse than this and we have put out the immediate fires during COVID and the emergency situation we had has been done and we've probably paid off about £8000 since last October on the highest interest things we had.
Now we have this £17,000 most people would say pay off more than half the debt but I was thinking to keep back 3-6 month of expenses and then used the rest on the highest interest debts in case in these uncertain times we face redundancy again. I am going to get redundancy income replacement insurance as well going forward as not having it was a bad choice previously also.
I am at a cross roads in life which what I do in January will impact the rest of my life as its tempting to use even some of it so have a well earned break away and so on but I want to address the situation I've gotten myself into, does my plan sound sensible or is there anything you do differently?
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