Needing some sensible advice

PigletWinnieAndMatilda

Hi all, I'm hoping you will be able to give me some unbiased advice. In June I found out my boyfriend had £3k more on credit cards than i knew about which meant our total debt is £8k (£2.5k is mine). Prior to this we had got engaged and started planning and put down deposits on wedding using money give to us by my dad. To pay for the rest of the wedding and the honeymoon we need to save approx £9k. We are on target to have this about by the end of Jan 2016 (wedding is July 2016). However, after this point we are not sure what to do - the cc are interest free till march 2017 which coincedently is when we remortgage. Ideally by this time we would have overpaid the mortgage and paid off all debt. The bit i need advice on is....my boyfriend is receiving a significant bonus this month and it will be large enough to pay off the debt - however is this the most sensible thing to do bearing in mind its interest free? Should we overpay the mortgage or save it for a rainy day??? Plus after saving for the wedding we will have money spare - what is the most sensible thing to do with this? Also on a side note i have seen on these forums that often people worry about telling their partners about debts - in our case it has brought us so so much closer. We now share all money and it has made us think about budgeting so much more. We plan how much we are spending each month and as a result have been able to save and not get further into debt. Something we have never done before. Ive never been happier even though the debt does worry me as the amount does seem very large - think this is why im leaning towards just getting rid of it - but in my head i know it doesnt make the most sense

PigletWinnieAndMatilda

sorry i pressed to quick !! Meant to add thanks for any advice!!

sourcrates

Cricky, lol, my wedding cost less than a grand, including the honeymoon, then again, I am divorced now !!!!


Just out of curiosity, what do you get for a 9k wedding these days ?


If the credit cards are interest free, then there's no benefit to paying them off all at once, however, if it would clear your debt, then that may be the thing to do.
It does not make sense having savings if you also have debt, so again, maybe over paying the mortgage would be a good idea.


Its up to you ultimately what would be in your best interests.

Mort

Even though the cards are interest free for the next 22 months I would use the bonus to pay off the credit cards. I would then try to save the CC payments for a rainy day.

andyfromotley

None of your options are terrible tbh. But imo you should have two priorities.

1. Have an emergency fund of £1000.
2. Be debt free.

In that order. The rest of it is up to you. As you are now fully together on finances you can sit down and work out the best way to deal with any extra/spare cash you come up with.

Ignore the interest issue. Its marginal and the benefits of being debt free are worth more than the paltry interest you would have earned.

Sound like you have really got on top of this before you were married. Well done.

peteuk

How did you get CC's which are interest free until 2017! I am missing a trick here.....

Youve got a few options
1) save it for a rainy day
2) put it towards your wedding
3) pay CC's + or - other debts (pay off debts with highest interest first)

So I would work out which is best and go from there. Ask the following
1) how much are we saving per month towards the wedding and how much is the lump sum ie bonus is £1000 your saving £100 per month so its 10 months payments.
2) how much are you paying to cc's and other debts (as above - how much would you then have to put towards wedding - don't forget you will still have to pay these if you use the money elsewhere)

Advice -
1) The usual mantra of debt v saving is pay off the debt first (especially if there's interest being applied)
2) Dont become greedy (ie increase the wedding cost because of the lump sum, spend it needlessly)
3) Although your wedding day is a special day it has to be within reasonable cost (which from your post I believe it is) but after all it is only one day.

Hope that helps.