Help me decide....

iVillage Member
Registered: 03-27-2003
Help me decide....
4
Tue, 04-08-2003 - 9:12am
I'm getting married in July, and my parents have decided to give us $3000 to use as part of a downpayment on a house, which we will probably not buy until at least the summer of 2005 (We'll have another $3000 or so saved by then). Here's my dilemma: in July, my total credit card debt will be $5200. I know the $3000 is supposed to be for the house, but I've been thinking about paying it to my cards. What this will do is save me at least $260 in interest, and pay them off 9 months sooner. In addition, at the end of that 9 months, whereas I would've had zero credit card balance and $3000 in the bank, I'll have zero credit card balance and $3600 in the bank (9 months times the $400/mth I would have paid on the cards). So, do you think I should do it? I don't see a downside to it, since the $3000 isn't going to collect $600 in interest sitting in the bank for 9 months.

Any opinions would be greatly appreciated!

iVillage Member
Registered: 03-26-2003
In reply to: cj311
Tue, 04-08-2003 - 1:46pm
My parents offered the same deal -- we have to save X amount and they will match it. But ONLY if we save X amount. They were investing their money and found they were losing it, so pulled out the money and offered this to my DH and I and then my brother. It felt kind of like a stab just because my brother lived at home and save his share in 6 months -- it will take us about 2 years. I asked about using the $$ they would give us for debt. They said no. And I kind of agree.

First, think if you put the $6,000 down vs. the $3,000 that will save you more interest in the HOUSE, a 15-30 year loan. Second, maybe your parents feel the same as mine. First, they did not put us into debt -- we did. They don't want to pick that up, but help us out. My dad's theory is he wants to help us, but he does not want to put us further into debt by giving us the $$ now.

It is SO HARD but you probably know the best thing is to use the $$ for the house. Maybe your parents can do what mine is -- they will not give us the $$ until they actually gift it to us -- then we CAN'T use it.

Good luck!

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
In reply to: cj311
Tue, 04-08-2003 - 12:09pm
I agree with you on this.

My suggestion was to be put it for the house.

It is so easy to say "on paper, we could do it this way" and well unfortunately, life gets in the way sometimes and the "on paper" plans don't work. I know, I have DONE this kind of thing before and inevitably something comes up and you can't get the money back in the bank, etc....

I know just looking at it in black & white it seems the most logical way to pay off the credit cards and do it that way but you may find yourself regretting ever making that decision and not holding onto for a house, even if it *IS* making less interest, etc...

It's your decision but that's my 2 cents worth.

Becky

Avatar for zaboz
iVillage Member
Registered: 03-26-2003
In reply to: cj311
Tue, 04-08-2003 - 10:47am
I can see where for strictly financial reasons, it makes sense to pay off your debt.

But for emotional reasons, I guess I would hang on to the money. It's intended

for your new life together, to buy something very meaningful, a house.

And speaking for myself, it's very easy to promise to replace money and then not

be able to or have something else come up. So maybe you should just put it away, somewhere where it will make a little interest.

But of course, it's your decision!

iVillage Member
Registered: 02-14-2003
In reply to: cj311
Tue, 04-08-2003 - 10:31am
Hi sweetie. My parents gifted Mr Joe and me some money for our house too. The gift came with strings, however. The money was ONLY to be used for a house. We complied with my parents' wishes. Yes, the money would help us tremendously with debt, but that's not why we were given the money.

Talk to your parents. See how they feel about your plan. I suggest opening an ING account (visit our Referrals board for an opening bonus) to get a decent interest rate for a liquid savings account. :o)

CM Ms Joe Cool

Senior Community Moderator

moneylifecm@mail.ivillage.com

Ms Joe
CM Ms Joe Cool
Senior Community Moderator
moneylifecm@mail