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What should I use the money for?

We are moving into our new property next friday and when we complete the mortage company are giving us £1000 cash back :j we are using £200 for buying things we need in the new house and paying off the final bills from our flat. Now we had a chat and decided we are going to use the £800 towards our debt but we dont know who to or how. We came up with 3 options.

1. Pay off my mum and dad putting the extra £83 ourselfs which will give us an extra £100 a month to play with which is what we pay a month to them.

2. Pay off the sofa which is 0% got 8 months left and if we paid it off again we will be freeing up £100 a month.

3. Give £400 to each so they are both smaller and continue to pay what we already pay.

It makes more sense to pay off a debt all together but then again which do we choose. my mum and dad are in no hurry for the money but it would make me feel loads better. It would also feel great to pay off the sofa and get that cleared off my credit record.

Any ideas would be greatful as we really cannot pick which one to do.

Comments

  • Hello

    Think the other option would be to pay it off the mortgage?? - Assuming you are allowed to and will not get charged a ee/penalty for early payment?

    I personally wouldnt pay off the Sofa as its 0% , you need to make the money work against a debt that has a %APR, or save the money and gain interest.

    Morally thought, it might be nice to pay your parents off in full :D
    Proud To Be Dealing With My Debts - 1420 Days To Go!
    LBM: £103,592.98 / Currently £78,500.08 - Down 24.22% / Mortgage: £92,800.00 / Loan: £17,284.21 / Overdraft: £450.09 / C/Card 0%(October 08): £5,601.54 / C/Card 0% (January 09): £1075.22 / Child Care: £137.80
    Share Investments: £51,390.74 / Money Owed From GS: £5,812.61
  • Ytaya
    Ytaya Posts: 326 Forumite
    What interest rate is your overdraft? You could clear it and remove the limit so your account is in the black again?

    Failing that, see if you can make an overpayment on your mortgage? If that's not possible, then you may as well clear either your parents or your sofa, for the psychological value in having one less debt. I'd say clear the sofa and then up the amount you pay to your parents (old payment + sofa payment) to get rid of it quicker.
  • pinkshoes
    pinkshoes Posts: 20,351 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    If the sofa is 0% for 8 months, then put the money in an ISA for 8 months, THEN pay the sofa off at the end of 8 months.

    (how were you planning on paying for the sofa anyway??).

    Leave the interest in the ISA for a rainy day...
    Should've = Should HAVE (not 'of')
    Would've = Would HAVE (not 'of')

    No, I am not perfect, but yes I do judge people on their use of basic English language. If you didn't know the above, then learn it! (If English is your second language, then you are forgiven!)
  • Burlesque_Babe
    Burlesque_Babe Posts: 17,547 Forumite
    Part of the Furniture Photogenic Combo Breaker
    I would say the overdraft if they are charging you interest.

    After that your parents and then the sofa.
    :D"Stay Wonky":D

    :j:jBecome Mrs Pepe 9 October 2012 :j:j
  • Storm
    Storm Posts: 1,749 Forumite
    Debt-free and Proud!
    Overdraft as this looks the only one you're getting charged interest on (then make sure you cancel it!)

    However, moving is an expensive business, and you'll need to have some savings for emergencies - so you may be better off popping it in an isa
    Total Debt 13th Sept 2006 (exc student loan): £6240.06 :eek:
    O/D 1 [strike]£1250 [/strike]O/D 2 [strike]£100[/strike] Next a/c [strike]£313.55[/strike]@ 26.49% Mum [strike]£130[/strike] HSBC [strike]£4446.51[/strike]@15.75%[STRIKE]M&S £580.15@ 4.9%[/STRIKE]
    Total Debt 30th April 2008: £0 100% paid off!

    PROUD TO [STRIKE]BE DEALING [/STRIKE] HAVE DEALT WITH MY DEBT ;)
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