Today I checked a savings account from my old bank and was surprised to find it has nearly £278 pounds sitting in there untouched and unfunded for years. It was going to be my emergency fund but I opened a new savings account and forgot about it.
After some careful thought I’ve decided to empty my savings account. Why I’m getting rid of my emergency fund goes against what I’ve read about personal finance however I think putting this money into my debt will make me bigger savings than leaving it in the bank earning a pittance.
Leaving that money there earning next to no interest doesn’t make any sense, especially since I’m paying higher interest on my debts and the UK inflation rate is higher than my saving interest.
Some people many think it’s not a smart move, yet for people in credit card debt it makes logical sense to spend any savings on your debt. Therefore today I will withdraw all of my savings and pay it into my credit card that is costing me the most.
We are taught and recommended to open a savings account to earn interest yet in these economic conditions it’s hardly worth it. While saving money in the bank is nice my purchasing power is fading away. Every day that money is worth less and rots away a little. Compared to my debt having a savings account is actually losing me money.
The best course of action is to closed the account and put the money into my credit card debt. I’ve analysed the risk and hopefully I won’t get the sack, get made redundant or experience any unexpected emergency like anything breaking down or needing replacing.
The plan will then be to rebuild my emergency savings fund after I’ve wiped out the debt on both my credit cards. Let’s hope am not given my P45 on Monday :-/
