To pay or not to pay...

jamesarpc

Hello all.
Just after some friendly advice.
I took out an ill-advised consolidation loan a couple of years back.
It paid off a small car loan, for my unreliable 206, and fees I'd racked up studying for a course that got me my current job...which I love.

After a few miserable years of enduring my mid-20's at my parents house, and with close to three years worth of £270 p/m payments left, my folks have offered me and my sister £5,000 each.
It's kind of an inheritence while they are still around to see us enjoy the money.
My sister is paying for her wedding and my girlfriend, who lives in a different city from me, thinks I should invest it the same way.

I think that it would be better to put the lot into my debts (there is close to £7,000 still pay) and by the end of the year I'll be free of it.
I can get my own place nearer to my work, or stay where I am and save...

I was just wondering if anyone had any pointers?
Surely it's best to clear this meddling loan. I am on a trainee wage of little over £1000 a month and after the modicum of rent I give my folks, petrol, insurance, credit card payments and loan installments I don't have enough to move out.

I spoke to my bank. If I put the full £5000 into the debt it will be clear by December this year...I may even be able to scarifice a social life for two months and get it cleared even quicker.
Without doing it, I'll still be paying in December 2013.
(bank also said I could pay until December 2013 but reduce monthly payments to £90...not really interested in this option).
I can see my girlfriend's point as we are at the age where we should be considering marriage and neither can afford it, and I also don't want my parents to think Im fritting the money away.


Thoughts?

Thanks

James :money:

zppp

My choice... definitely debts. Why, because then you are debt free and no longer have repayments to make etc, you could save up for a wedding. Weddings can be done at any time, debts incur interest. For me it would be a no-brainer.

[Deleted User]

Loans first, then wedding later. Starting married life debt free would be a pretty nice wedding gift for her.

Tixy

No contest, pay it off the debt, save yourself the interest. What APR are you paying on the loan anyway? is there any chance you could invest the £5k where it would earn you as much - I'd guess probably not.

chalkie99

Pay the loan off!

Don't be swayed by your girlfriend - if she wants to blow 5k (your 5k!)on a wedding you still have the loan to pay off and you still don't have the income to start married life anyway.

It's a no brainer.

WellKnownSid

jamesarpc wrote: »

I can see my girlfriend's point as we are at the age where we should be considering marriage and neither can afford it, and I also don't want my parents to think Im fritting the money away.

You already frittered the money away to get into debt in the first place, so paying off what you can shows some good grown-up thinking. "Investing" in a marriage would be a complete lie, as you'd be avoiding the debt issue... Just remember the equation:

Marriage + debt = divorce + misery

Pay off the loan, then save to get married. A much more rewarding start to married life.

jamesarpc

Thanks everyone.
I know it's the right thing to do, I just didn't want to commit to it and then realise I had made a mistake.

I couldn't earn nearly enough % from investment

jamesarpc

Thanks, it's a good point.
I didn't fritter the money away, however. I took a specialised masters in order to secure my dream job, which will *touch wood* be with me for life, so I saw it as a neccersary gamble.
I definitely could have done it with a bit more caution but I'm not an extravagent spender racking up needless debt. Contrary to the stats.

[Deleted User]

Unless of course, your girlfriend's the daughter of a billionaire who stands to inherit in a few years time, in which case, forget the debts, get yourself down to Argos for one of Elizabeth Duke's finest rings and get yourself over there pronto!

charleeboo

Pay off your debt 1st, then, when you and your gf do decide to marry, the money you earn is yours, not the loan company's.
The fact that you asked it means you already know the answer to your question. Tell your gf youre doing this (after all, it will be your money, so your choice), she will have to accept it. If she doesnt, say see you later and you will have saved even more money (ha ha, lol, joking!!)

tyllwyd

I agree - debt before paying for a marriage.

In this day and age, is it such a big deal to get married straightaway? I do believe in marriage long term, especially if you have kids, but if you & your girlfriend want to live together - or in the same city at least - why not get on and do it anyway?