I pay my council tax over 10 months and I also pay my water rates over 10 months. Which means that in February and March I have no council tax or water rates to pay! I imagine a lot of you out there are the same meaning that there is extra money available to you for these next two months. You may not even realise that you do this! Have a look!
I am going to put mine into my savings account to put towards a holiday I am planning. A nice little chunk of savings indeed as my council tax is £159 per month and my water rates are £46.87 per month. Making a grand total of £411.74.
What will you do with yours?
It is so easy for this extra money to get swallowed up by day-to-day expenses, so think carefully about making this money work hard for you.
Firstly, should you save it or pay it off debts? If you’re not sure then have a look at this article from The Money Advice Service on whether you should save or pay off debt.
Here are some suggestions…
Pay it off your debts
That is a hefty chunk to be able to pay off and bring your debt-free-date closer. Do you have any priority debts? If you’re not sure then Debt Camel talks about which debts are priority debts here. Once you are clear on this you can also look at snowballing your debt. Take a look at these calculators to help you decide http://www.stoozing.com/calculator/snowball-calculator.php and http://www.whatsthecost.com/snowball.aspx.
Start an emergency fund
My recommendation is to build up an emergency fund of at least £500 and then longer term of 3 months essential outgoings. My total is £411.74 and would go a good chunk of the way to creating or adding to an emergency fund. It really does make such a difference when those unexpected costs crop up.
Save it for something in particular
Like I am saving mine for my holiday, you might want to do the same and put it towards your holiday. You might want to put it towards other particular events like a house deposit, a wedding or home improvements.
Also, think about some of those bigger one-off expenses that might catch you out. Some common events might be your car service and MOT, birthdays which might includes parties and gifts, and finally Christmas.
What are you going to do with yours?