Jump to content

Am I missing something?


  • Please log in to reply
10 replies to this topic

#1 MintyBiscuit

Posted 24 January 2013 - 11:35 AM

We have a personal loan that we're on track to have paid off by the end of May, about two years ahead of schedule. We also have a savings account for DS that is about $100 shy of the full amount owing on the loan. I'm considering using DS's money to pay off the loan immediately, freeing up $600 a month in loan repayments to pay back DS's money and avoiding another four months worth of interest. I don't know if it's just because I feel a little guilty doing this, but I feel like I'm missing something.

With the amount we're saving anyway, and the loan repayments, we'd be able to pay back his account in about two months. I'd also pay extra to make up for the loss of interest in that time - I've worked out what a year's worth of interest would be on the amount currently in there and would pay that amount in addition to what's in there now. Does it sound like paying the loan off is the smart thing to do? I'm 99.9999999% sure it is, and pretty sure it's just guilt making me second guess myself

#2 busymumof1&1/2

Posted 24 January 2013 - 11:40 AM

You are correct. It makes more financial sense to pay out the loan. Just be aware that the savings in interest may be taken away because of early release clause. Check with the financial institution for the actual payout figure, they should be able to give this to you straight away.


#3 FiFo

Posted 24 January 2013 - 11:44 AM

If I read your sig right your DS is only 1...so he is not going to know or care how much money he does or doesn't have.
DEFINITELY pay off your loan. Don't waste your money on interest if you can avoid it. It sounds like you have the perfect plan to pay back your DS's account so it will all even out and you will be better off without a debt looming over you.

Ditch the guilt and good luck

#4 MrsLexiK

Posted 24 January 2013 - 11:44 AM

Is it money you have been putting into the account? In that case I would not feel guilty at all, if it is money that he has been given I get that you may feel guilty.  I know my parents took money out of our accounts a few times to pay for things (for us) and then put it back into the account at a later stage.

Just check that you won't be penalised by the bank for paying out the loan early.

#5 PrincessPeach

Posted 24 January 2013 - 11:48 AM

Given the rate of interest you are paying & the rate of interest DS is earning, then I probably would.

Personal loan interest rates are usually sky high.

#6 Tesseract

Posted 24 January 2013 - 11:52 AM

Always pay off loans first because the interest being charged is greater than the interest you earn on a savings account. Although you may need to take into account if there are penalties for paying off your loan early.

Don't worry that it's your DS's money. If you pay it back it's no problem surely? Look at it as him lending you the money to pay the loan off, for the benefit of the whole family, then you paying him back. You could even put a little extra in for his trouble lol.

#7 MintyBiscuit

Posted 24 January 2013 - 11:54 AM

Yeah, I've checked the early release fee and it's a difference of a few dollars whether we do it now or in May as it'll still be quite early, so interest savings still well outweigh it.

Some of the money is money he's been gifted, but he is only little and the money currently going on the loan would just be going into savings, so paying him back will be quickly and easily done. And I'll be paying him back more than the interest he loses. I think the guilt is a stupid throwback to when we were kids and our savings would get raided and never ever topped back up.

Thanks everyone. The guilt is silly, and we'll all be better off with no debt hanging over our heads original.gif

#8 joy6328

Posted 24 January 2013 - 12:08 PM

Pay off the loan.
pay back your son's account.
Start a regular savings plan with the original loan payment. If you don't save it, you'll spend it original.gif


#9 (feral)epg

Posted 24 January 2013 - 12:16 PM

The only (potential) issue I see with using the money from the savings account is that it could become easy to do it again and again and just end up wasting it.  But as long as you're normally quite sensible with money and don't expect to accrue any more debt I would pay out the loan.
And then perhaps use part of the loan repayments to add to DS's savings account.


#10 beaglebaby

Posted 24 January 2013 - 07:00 PM

I think you should do it as long as you trust yourself to repay the money.  If you're going to be making regular deposits to repay it to DS look at opening the Bankwest kids saver account, I think it is currently paying 8% interest on amounts up to $250 a month deposited.  It only lets you get the balance up to $3k over 12 months then moves it to a standard savings account and starts again, but it's the best interest rate anywhere on savings.

#11 MintyBiscuit

Posted 26 January 2013 - 09:50 PM

QUOTE (beaglebaby @ 24/01/2013, 08:00 PM) <{POST_SNAPBACK}>
I think you should do it as long as you trust yourself to repay the money.  If you're going to be making regular deposits to repay it to DS look at opening the Bankwest kids saver account, I think it is currently paying 8% interest on amounts up to $250 a month deposited.  It only lets you get the balance up to $3k over 12 months then moves it to a standard savings account and starts again, but it's the best interest rate anywhere on savings.


We did it, and have sat down and plotted out the payback plan including taking lost interest into account, so I'm happy.

That account sounds great, will have a look into it.




0 user(s) are reading this topic

0 members, 0 guests, 0 anonymous users

 

Exclusive Black Friday Sale!

Get over 40% off selected products, including prams, baby carriers, cloth nappies, sleeping bags and much more! 24 hours only, on May 6 - register now for your special code.

Kelly Clarkson shares first photos of son

Kelly Clarkson has shown off the first photos of her son, Remington Alexander Blackstock.

5 childbirth myths that need to be busted

Birth is an unpredictable, mysterious process that intrigues us all, and there is a lot of misinformation out there.

Mum of three fatally shot by toddler while driving

A US mother has been shot by her toddler while driving on a highway in Wisconsin.

All you need is one minute to work out

The seven-minute-work out is old news. Research shows the effectiveness of going hell-for-leather for just one minute.

Pregnant women needed to join diabetes study

Pregnant woman in country Australia will help Adelaide researchers figure out why cases of type 1 diabetes have doubled over the past two decades.

Just announced: the Mountain Buggy Unirider

It's the perfect solution to combat those toddler meltdowns when they no longer want to be in a pram but can't walk long distances.

Authorities euthanise dog that fatally bit a newborn baby

A pit bull mix that fatally bit a 3-day-old infant last week has been euthanised, authorities said.

The push for Medicare to fund lactation consultants

While meeting with a lactation consultant can make an enormous difference to a new mother, it's not a service that is available through the public health system.

Why it's perfectly natural to dislike other people's children

Members of a popular forum are fiercely debating whether it is acceptable to dislike a friend's child.

Woman gives birth on plane, names baby after airline

A pregnant woman who unexpectedly gave birth on a flight has named her new baby after the airline, Jetstar.

Heartwarming photos show the joy of adoption after foster care

Children living in foster care can feel like their future is less than clear. But that uncertainty disappears the day they are adopted by their "forever family" 

'Oh my god, it's a baby!' Mum shocked to give birth

When the cramps started to kick in, Klara Dollan just assumed a painful period was starting.

Mum's Facebook plea: 'Help me find my daughter's father'

Kerryn has a unusual present planned for daughter Imi's 13th birthday celebrations - she hopes to be able to be able to give the soon-to-be the teenager her first ever photo of her dad.

Is it possible for your house to be too clean?

Our houses are cleaner than ever before. But how clean is too clean? Could a sterile home be putting your family's health at risk?

Millions of Monkeys: puzzles that grow with your toddler

Here's a puzzle that grows with them; the Puzzle Grow Pack by Millions of Monkeys.

Baby names from Britpop

If you grew up in the 90s you might want to look to the genre of Britpop music for baby name inspiration.

What to eat and drink when you have gastro

When you catch a bug that causes acute infectious gastroenteritis (gastro), your stomach and intestinal tract become inflamed, causing diarrhoea, nausea, vomiting, abdominal cramping and pain. The last thing you probably feel like doing is eating.

'To this day, I owe her my life'

Would I have survived if I hadn't crossed that street?

Why baby Sonny needs you to vaccinate your children

Caitlin is a firm believer in the importance of immunisation to protect children from harmful and deadly diseases.

Five-year-old's photo captures beauty of motherhood

There is no make-up or special outfits and hairdos, but the five-year-old boy who took this picture captured the essence of motherhood as well as any professional photographer.

Babies know whether you are naughty or nice

Studies have shown that infants in the first months of life try to avoid dealing with social wrongdoers - for example, sharing less with them and helping them less - and they expect others to, too.

 
Advertisement
 

Top 5 Articles

Advertisement
 
 
 

What's hot on EB

The babies who are one in 70 million

Bethani Webb was excited to find out she was pregnant, but the first time mum did not realise she was carrying four babies not one.

Exclusive Black Friday Sale!

Get over 40% off selected products, including prams, baby carriers, cloth nappies, sleeping bags and much more! 24 hours only, on May 6 - register now for your special code.

Cafe offers breastfeeding mums a free cup of tea

A Sydney cafe is offering breastfeeding mums free cups of tea in a bid to show support for the right of women to nurse their babies wherever they choose.

To snip or not to snip? When the decision is not clear cut

Jamie Oliver, who considered a vasectomy, is to be a father again. A fellow dad reflects on his own decision 11 years ago

Doctors stunned by rare twins born almost six weeks apart

To everyone's surprise, Kristen Miller "kept doing better each day", keeping her second baby safe.

Baby book ideas for modern parents

Before my son was born I was given a lovely baby book full of blank pages waiting to be filled with weights and heights and first words.

The adorable smile of a baby seeing his mum clearly for the first time

There is no doubt seeing their child smile for the first time is an unforgettable moment for parents everywhere.

Mum tells how toddler 'nearly hung himself' in cot mishap

When Alison Johnson put her 18-month-old Caleb down for a nap, she had no reason to believe her son was in any danger.

Babies are still switched at birth? Yes, it can happen

All my panic and tears aside, my biggest question looking back is about the kind of security measures used in the maternity ward.

Doctors slammed for taking selfie with newborn

Everyone who visits a mum in hospital in the days following childbirth wants to get a photo with the new baby.

ergoPouch Twosie Sleepsuit for winter breastfeeding

Finally, there's a way to keep warm while breastfeeding through winter.

Health check: How long does sex 'normally' last?

What to do with this information? My advice would be to try not to think about it during the throes of passion.

When breastfeeding sucks: fixing common problems

From niplash to tight boobs, biting to milk supply issues, Pinky McKay looks at common breastfeeding issues and how to solve them.

10 things I've learnt in my first six months with twins

Six months on we're all still alive, and the more we get to know each other the easier the days become.

Mum's loving kiss leaves baby fighting for life

Kirsty Carrington thought nothing of giving her newborn son a kiss, little did she know it would leave the baby fighting for life.

When doing chores is your new 'me time'

After children, 'me time' looks a little different.

Get going: 14 travel strollers for families on the move

A stroller can make or break travelling with a baby or toddler. Here are 15 great single travel stroller options.

10 ways toddlers are terrific

It always pays to remind yourself of how terrific toddlers can be - they're little like this for such a short time

 

ENTER NOW

Do your kids love bananas?

This is the comp for you! We have $800 worth of Myer gift cards and boxes of Australian Bananas to be won. Entry is simple: just post a pic of your little one enjoying a banana in the comments of the FB post to enter.

 
Advertisement
 
 
Essential Baby and Essential Kids is the place to find parenting information and parenting support relating to conception, pregnancy, birth, babies, toddlers, kids, maternity, family budgeting, family travel, nutrition and wellbeing, family entertainment, kids entertainment, tips for the family home, child-friendly recipes and parenting. Try our pregnancy due date calculator to determine your due date, or our ovulation calculator to predict ovulation and your fertile period. Our pregnancy week by week guide shows your baby's stages of development. Access our very active mum's discussion groups in the Essential Baby forums or the Essential Kids forums to talk to mums about conception, pregnancy, birth, babies, toddlers, kids and parenting lifestyle. Essential Baby also offers a baby names database of more than 22,000 baby names, popular baby names, boys' names, girls' names and baby names advice in our baby names forum. Essential Kids features a range of free printable worksheets for kids from preschool years through to primary school years. For the latest baby clothes, maternity clothes, maternity accessories, toddler products, kids toys and kids clothing, breastfeeding and other parenting resources, check out Essential Baby and Essential Kids.