Newbee asking for advice

SallyGemini

Hi, I am looking for peoples opinions as to what I should do with my extra income. My hubby is in the building trade and as it is looking dire at the moment, I have opted to go back to work. We can live on my husbands wages (all bills and minimum payments) and so my £230 per week will be spare. My gut instinct is to use half to start paying debts off and save the other half - just in case there is a majot slump in my hubby's work. We have 2 kids, no mortgage but still have the same bills everyone else has. However I have read on this site that Martin believes you should use all excess money to pay debts off - what does anyone else think?

your thoughts appreciated!

Horace

My personal opinion is that you pay off your debts first and when they have cleared put your excess money into a tax-free ISA or something.

Welcome to the forum. Stick around as someone may come on with better advice.

GirlRacer_2

Hi welcome aboard. What are your debts?

SallyGemini

The usual, credit cards, 2 bank loans and some catalogues!

CarolynH

I agree with Horace, but again that's just my personal opinion. I know it feels 'unsafe' not to have a bit put away, but in all likelyhood your debts will be costing you more than your potential savings could be earning you.

andan

I think it would depend on what debts you have and the interest rates on them. If you give us some more details as to what kind of debts they are and the interest rates on them, then people may be able to advise better.

Welcome to the board and hope your enjoying this lovely sunday afternoon.

jak

I tdepends on the cost of the debts. However, saying that dh and I put some by each month for a holiday- a light at the end of the tunnel and although not very MSE, it works as an incentive for us! The majority of any spare cash goes towards debt repayment tho.
J
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SallyGemini

Its just we have bad luck with cars etc and although I want to pay my debts off I would feel safer with some ready cash at hand if I ever need it!

poorandindenial

Hi Sally

Although the rule of thumb is that you don't save until you have cleared debts (well those with higher interest than you could earn saving) I can completely understand that you would want to have some spare cash just in case, particularly as Hubbie is in a job that can be fickle. How much do you think you would want o have to feel safe?? You could always save to that amount and then throw everything else at your debts.

As others have said, it really does depend on what the debts are and then level of them but if you feel like you would be anxious without a buffer then it is important that you feel that you and your family are secure.

Also check out the snowball calculator at https://www.whatsthecost.com and see the difference betwen different rates of payment to your debts. This will help you to see the impact of your decision and make a more informed decision.

count_rostov

Whatever you do - don't give in to the temptation to treat yourself now that you have all this lovely extra cash coming in! Remember that you've managed on your husband's income and that this is spare...
Personally, I would save half and use the other half for debts.

SallyGemini

ive just had a quick round up and this is my breakdown

£6400 on credit cards (6)
11,000 on loans (3)
1700 on catalogues (6)

plus 2 overdrafts totalling 1400.00


ITS BAD - I DO WONDER IF WE'LL EVER DIG OURSELVES OUT OF THIS!