Have I done the right thing

uncreative · 14 February 2015 at 7:39PM

So a month has gone by and a lot has happened. My dad retired in november and surprised us last week by giving my sister and I £35000 each from his lump sum to go towards a house deposit, she is also looking to move home now she is married. I had really attacked the debt head on, we have started ynab which i have found to be excellent and i was feeling positive about it. Still havent told anyone about the debt and the search for a house was a really good excuse to cut right back. friends telling nightmare stories about their spending and geetting mortgages has really put the wind up the missus so we agreed to cut back and she has well and truely got into ynab.

I have just been paid again so I have taken the decision to use the £35000 to clear all the debt. The payments were made 2 days ago and I now have just over £1200 in a bank account. I know I have one month of trailing interest to come and after that I am truly debt free.

I didnt tell the missus that my dad had given me the money. i know this is going to come back on me but i have just moved one lie for another. also i have a terrible empty feeling about not paying the debt off legititmatly if that makes sense as there is no sense of achievement at all.

i am now a huge convert to ynab and me and the missus have been working as a team for the first time in ages, checking in with each other for 5 minutes each night to update everything. I should feel happy that this has happened but i still feel off.

I have reworked our ynab together and we can save almost £3k per month by cutting back and we have planned to save hard and get at least 6 months of frugal living and try and get a house after the summer with £20k deposit and 6 months of bank statement history showing we can afford it by living carefully. if we can still take advantage of help to buy then we should be ok. just cant shake off a hollow feeling at the moment about it all.

uncreative · 14 February 2015 at 7:45PM

my thinking was going for a mortgage with all that credit card debt would have really hurt our borrowing despite the large deposit, and saving the interest as i had no 0% balance ransfer cards to use. I think my maths is right but i have noone to share this with so just getting it out.

andyfromotley · 14 February 2015 at 7:53PM

Well done you. Not only paying off the debt, but much more importantly on taking steps to stop you getting in that position again. i am a very new convert to Ynab and i think its fab.

A few things strike me
1. Now debt free and with Ynab up and running you should be able to supercharge your savings. Given your income you have rightly spotted that you can pile it up pretty quickly, (you'll have your dads money back in 12 months or so)

3. CLOSE the CC accounts. prevent any possibility of it happening again.

I'm sure your dad would approve of your actions. Well done

rising_from_the_ashes · 14 February 2015 at 7:58PM

I can see how getting rid of the debt is fantastic - but I do think you should have at least discussed it with your wife / your father first

As many on here will know, it's often the 'buckling down' and slogging it out and paying back the debt that really makes it sink in how hard it is and affirms our views never to do it again - will you have really learned that having cleared them this way?

Put yourself in your dad's shoes - how do you think he's going to feel when he finds out?

That's money he's spent his life working for - he's done an absolutely fantastic thing (that I'm sure many parents would love to be able to do) by giving his kids a huge step onto the property ladder ... or so he thought

I'm sure he could have used the money himself but obviously wanted to give you & your sister a truly wonderful gift

Is it right or wrong ...... clearing the debts might not be - I'm sorry to say that I feel to do it behind both your wife's and father's backs is .....

Also, have you thought about the tax implications?

You can only be gift £3k per year without there being possible tax implications

uncreative · 14 February 2015 at 8:02PM

this ^^

i have to tell them. its eating me up.

Tryingtomoveout · 14 February 2015 at 8:08PM

Your debt had to be paid off at some point so you have done nothing wrong IMO. You have saved all that money in interest that you were paying on your credit. Now to get your head down and save...

andyfromotley · 14 February 2015 at 8:12PM

The tax implications only kick in if your father dies with the next seven years, and only then dependant upon the size of his estate so hopefully this won't ever be an issue for you.

matttye · 14 February 2015 at 8:20PM

You've done the right thing but definitely think about telling your father and partner.

Bobarella · 14 February 2015 at 8:50PM

What a tricky situation. At the end of the day being debt free is amazing and a massive plus in life. Do you know why you were in debt in the first place and can you avoid it creeping back up?
I think that's the main point I'd want to make sure I knew the answer to personally.
I know what you mean re no sense of achievement. I have always said much to others mirth that I would hate to win the lottery. I want to make it myself not have it handed to me.

I think if there is a chance of your partner finding out, for example would your dad not find it odd for her not to be grateful to him next time they meet, even if it were just a passing thank you. And maybe he could mention it to her wondering why no reaction from her etc.
That could hurt both of them. So is it possible to tell your other half that your dad gave you some money towards a property & leave it at that?

On_my_way · 14 February 2015 at 8:59PM

It is a good idea to get rid of debt -your main priority now is making sure that you don't get into debt again.

Did your partner not know about your debt?

runforlife · 14 February 2015 at 11:03PM

My belief is that a relationship is built on trust and if you do not tell your partner then this could seriously affect the future of your relationship when they find out. What else have you kept secret? Where do you go on those nights out? What about those late nights at work? Do you get my drift?