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Pay off debt or start emergency fund
PM22
Posts: 286 Forumite
I have just received a letter saying Barclaycard are giving me a refund of £566
-something to do with interest and charges paid on my last DMP.
Shall I pay this off my 12k debt or start an emergency fund
currently with PayPlan and token payments until Jan 2023
-something to do with interest and charges paid on my last DMP.
Shall I pay this off my 12k debt or start an emergency fund
currently with PayPlan and token payments until Jan 2023
0
Comments
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If all your debt is with PayPlan and no interest is being added then I'd be tempted to put it away and keep an emergency fund.1
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You need an emergency fund to cover anything that crops up so put it in there.
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Emergency fund it is then0
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I agree that it is best to start off your emergency fund.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
Save £12k in 2026 Challenge £12000/£2000
365 day 1p Challenge 2026 £667.95/£165
Click on this link for a Statement of Accounts that can be posted on the DebtFree Wannabe board: https://lemonfool.co.uk/financecalculators/soa.php0 -
If you're already in a decent, manageable debt-paying routine then paying off a little more debt won't potentially create debt.
Not having an emergency fund could create debt. So I would create one whilst this magical moment exists. A massive thing to tick off in life's 'things to do' list.0 -
PM22, if you are worried about emergencies can you split your emergency savings. Maybe talk through with an advisor at a bank within walking distance.
An emergency account with a card - which you freeze in a bowl of water. This might fund a train ticket if you need to travel urgently, or a locksmith. Start with £100 in that account.
A savings account, which you ask them to lock so you have to go into branch. And get a note on saying do not offer card, on-line etc.If you've have not made a mistake, you've made nothing0 -
Emergency fund of £1000 then start smashing that debt down.Baby Step 6/7 . £16000 saved and invested. £47,000 deposit paid on new home DEBT FREE !!!
Currently Negotiating with HMRC !0
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