unexpected money and what to do with it?

mulchymurph · 14 February 2019 at 1:35PM

Afternoon all... opinions please!

I have received an unexpected payment which I'm hoping I can keep (not sure yet, it may have been in error).

If it is mine to keep I have a few options.
Plonk it on my mortgage. It would take 4 months off of my mortgage (!)
Pay off my CC - I have 0% on this card for 29 months
Replace the bathroom (something which I would have had to save to do).
Make a lump payment to my loan (I don't even know if I'm allowed to do this).

I realise the bathroom sounds like a waste, but I have only just bought my property and it has taken 4 months to make it to the liveable limit is now and I've only just moved in because it was so bad :eek:.
the bathroom is the first thing that NEEDS to be done _pale_

So, what do you all think?

MM
x

EssexHebridean · 14 February 2019 at 1:49PM

We bought our current home in 2013. Prioritised overpaying the mortgage from 2008, putting aside smaller amounts for savings. Finally got enough saved to replace our hideous and unpleasant bathroom in 2015. Think about how you can spruce it up in the meantime for limited money - new paint, really REALLY thorough deep clean, perhaps new flooring with some cheap vinyl laid over what's there - we used a bath mat to cover the hole in our floor for quite a few years! Try using a toothbrush & bicarbonate of soda on discoloured grout - that can make an incredible difference.

It sounds to me like the first thing you need to do on this payment is to find out whether you actually can keep it - there's not much point in spending it until you know!

If it comes to thinking about it going to the mortgage, are you sure o that figure? I'd expect a sum of money big enough to pay for a new bathroom would knock more than 4 months off, overall, particularly when paid off it so early in the term!

On the 0% card - have you set the DD to ensure that it will clear the balance in the 29 months or do you have a savings plan in place so the money for it will be there at the end?

mulchymurph · 14 February 2019 at 2:08PM

thanks you so much for replying. Well done on the valiant effort on your bathroom!:)

I'm inclined to agree on the bathroom. I'm desperate for something that isn't 50 years untouched, but I can see that there are a lot of reasons to postpone that.
The amount is £4000, but was planning on doing a lot of the work myself therefore cutting down on labour.

I used the mortgage calculator on here it it says I will reduce my mortgage for 4 months. I too thought it might be a bit better than that, but there you go :think:

thanks again, appreciate your help!

edited to say - yes DD set up to pay off the CC in 24 months
MM
x

enthusiasticsaver · 14 February 2019 at 3:03PM

I think if the DD is set up to repay the 0% on the credit card within the deal period then leave that as it stands.

What is the interest rate on the mortgage and loan and can you make a lump sum repayment without penalty? I think I would be inclined to put some of the £4K at least on the debt charging the highest interest.

Do you have an emergency savings account because if not then putting £1k aside for that would be a good idea.

I would start a bathroom savings account with part of it and budget for a monthly amount. I am not really a fan of wasting money on sprucing things up unless you know it will be a really long time(more than 3 -5 years) before you can afford to do the bathroom properly or if spending a nominal amount £50 will help you not be tempted to borrow to get it done and you really can't live with it anymore. Can you get an idea of what it will cost and then budget for a regular saver to get it done within a few years?

In summary you need to decide your priority. Is it getting debt free, overpaying the mortgage or sorting out your house and either split the £4K or decide on one.

mulchymurph · 14 February 2019 at 3:34PM

enthusiasticsaver wrote: »

In summary you need to decide your priority. Is it getting debt free, overpaying the mortgage or sorting out your house and either split the £4K or decide on one.

Absolutely spot on.
Thank you so much for taking the time to reply.
You're absolutely right. I think £100 could get the bathroom liveable for the foreseeable and I'm happy to sink that to make it a little more bearable.

I'll look into fees on overpaying my loan. If there are none, I'm inclined to split it between the loan and the mortgage.

I have an emergency fund so that's all covered.

thanks again, both :beer:
MM
x

MisterP123 · 14 February 2019 at 4:50PM

Well........ I'm gonna ask!

How do you not know whether you can keep the funds you've received.......... ?:o

pinknsparkly · 14 February 2019 at 5:03PM

Given that you say £100 would be sufficient to make the bathroom "good enough for now", and assuming the interest on your loan is more than the interest on your mortgage, I'd put it towards the loan (so long as they don't charge any fees). You'll save more money overall. Then once your loan and CC are paid off, immediately set up mortgage OPs for the same amounts as you were paying for loan and CC (so you never get used to seeing the "extra" money in your account), or save some of that money towards your sparkly new bathroom.

mulchymurph · 18 February 2019 at 1:49PM

MisterP123 wrote: »

Well........ I'm gonna ask!

How do you not know whether you can keep the funds you've received.......... ?:o

I'm a day rater. I got paid my salary for days worked last month and then got another lump through and I have NO IDEA what it is! :eek:
I've asked my payroll service and my agency.

No one has any idea, so i'm staying quiet for now!

unexpected money and what to do with it?

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