Dear Pete,

I owe my stepfather $7,500 since he helped us buy our first house six years ago. We were supposed to make payments to him, but we never got around to it. My financial life has changed a lot since we borrowed the money. I make about $40,000 more than I did then, and my wife

earns about $25,000 more. We never had student loans or credit card debt. I’m in line for a large bonus, $11,000 after taxes, and my wife and I want to use it to move into a bigger house. We also need to get our pension plan balances back to where they should be. Because of this, I’m still not comfortable repaying my father-in-law. We haven’t told him about it but, since we’re now 33, I don’t really think we need to have all of our financial plans handled by our parents. Thoughts? — Trent from Atlanta

Dear Trent: Congratulations on your recent success, Trent. Your investor will be delighted with his investment. I know I would be. I know why you emailed me your question – it’s because you already know the answer and expect me to tell you otherwise. Lucky for your stepfather, I’m not going to disagree with you. You know it’s time to pay it back, and I agree.

You’re certainly not the first person to borrow money from your parents without a reasonable plan to pay it back. Like most people before you, you had an unreasonable plan: pay it back when you ran out of money. You are probably wondering why I consider this plan to be unreasonable. For starters, you have a lot more money than before, but for some reason it’s not enough to activate the clawback mechanism.

I don’t know when you and your wife started making $65,000 more than when you bought your first home, but whenever that was, your cash flow has changed dramatically. You earn $5,416 more per month than before. It’s not my first rodeo, so I’m pretty confident to say that your expenses have also increased significantly. But here’s what I can’t figure out: if your retirement balances aren’t great, you’re still living in your first house and you need an $11,000 bonus for a down payment on your next house, where in the world is all your money going?

I have my guesses, and they’re not pretty.

If you’re not saving the way you want, paying off your student loan, and not yet spending the higher amount you’d like to spend on housing, then you’re consuming your increased income.

If you haven’t already, consider what it might look like from the outside. “Wow, Trent and Mrs. Trent must be doing just fine,” one observer might note. You probably eat good food, wear nice clothes, drive nice cars, and vacation in nice places. Once again, congratulations on your success. By all outward appearances, you have built a wonderful lifestyle. It’s just the kind of lifestyle that would aggravate someone you owe $7,500 to.

Repay your stepfather today. Don’t wait for your bonus. Write her a check for $500 or $1,000 today. Then, pay him the balance, when you get your bonus. If you don’t receive your bonus, pay it $1,000 per month until it’s paid off. And if for some reason you plan to play the “he doesn’t need it, he’s loaded” card, save it. His wealth has nothing to do with your debt to him. Do the banks have billions of dollars? Yes. Do they still have to be repaid? Sure.

I don’t think you wrote to me expecting me to tell you that you are at a crossroads, but you are at a crossroads. You can either choose the path of personal responsibility or choose the path that makes you live at someone else’s expense.

Start making adult financial decisions.

Peter Dunn is an author, speaker and radio host, and he has a free podcast: Million Dollar Plan. Have a question about money for Pete the Planner? Email him at [email protected]