Help my daughter please?

Poosmate

Yes it's "sentimental tosh" and yes that's hard but true and if you read my posts you will see that I have acknowledged in both that it's not the financially savvy thing to do but sometimes doing things the hard way can be more beneficial.

This lady has frittered away £6k on this, that and the other without realising it and let's face it, we've all done it. The easiest thing in the world, with a cold heart and a clear head, would be to pay off the debt (most of it) with her grans money. So she does that and frees up £100 per month that she's used to paying out. Where is the incentive to reduce her outgoings? She can more than afford them now because she's £100 better off each month.

I just worry that in five years time she may find herself in the same situation but without £5k in the bank to help her out. She has a real opportunity to learn from this and if that means paying reducing interest over the next 2 or 3 years, learning how to budget and live within her means, it will set her up for the rest of her life with her £5k intact.

Poo

clang_uk

Ok - I guess this is going to echo what people have already said. But here goes....Use some of the saving to pay off one card, this still leaves her with an inhertiance, which she can use for holiday, deposit etc. etc. This will also cut her debt in half and free up some spare cash to use.

Now the hard thing the grocery bill - £300!! When I was 25 and single I spent £13 a week on shopping (and no it wasn't ready meals) avoid her going out after work to buy things far too expensive, get her to write a list/meal plan and stick to it. Take left overs into work.

She can easily get on top of this and start enjoying herself - and tell her well done for sitting down and going through it with you!!

DVardysShadow

Poosmate wrote: »

Yes it's "sentimental tosh" and yes that's hard but true and if you read my posts you will see that I have acknowledged in both that it's not the financially savvy thing to do but sometimes doing things the hard way can be more beneficial.

This lady has frittered away £6k on this, that and the other without realising it and let's face it, we've all done it. The easiest thing in the world, with a cold heart and a clear head, would be to pay off the debt (most of it) with her grans money. So she does that and frees up £100 per month that she's used to paying out. Where is the incentive to reduce her outgoings? She can more than afford them now because she's £100 better off each month.

I just worry that in five years time she may find herself in the same situation but without £5k in the bank to help her out. She has a real opportunity to learn from this and if that means paying reducing interest over the next 2 or 3 years, learning how to budget and live within her means, it will set her up for the rest of her life with her £5k intact.

Poo

Don't you think that giving up the illusion that she still has Nan's inheritance is going to be hard enough??? If she does not learn from that, she is not much more likely to learn any other way.

And the truth of the matter is, although she has a savings account with £5000 in it, she does not have £5000 now that she has any real choice over until her debts are cleared, let alone in 5 years. And over this hypothetical 5 years, she is going to pay £3250 to keep £5000 in the savings account.

Pollycat

The way I see it, it's not like she still has the stash of used fivers that her Gran gave her as her inheritance in a box under her bed (at least I hope not).

She's got £5K inheritance and £6K debts.

So where exactly is the "huge emotional attachment" towards this £5K?

As DVardysShadow points out - she's actually spent (or to use her own words) frittered away that £5K plus £1K more.

Thowing away more money by paying interest on debt is plain crazy, not sentimentality.

jonjamie1970

The interest she is paying on the debts far outweighs the cash she has sat in the bank, it doesnt make any sense to leave it there whilst she is paying back debts at higher percentages. I could understand the car but cards and loans listed should be cleared and then start a savings fund on SO.

Good luck, £5k would come in very handy at my end right now.

Oh to be 26 and single again !!!

Elaine_Wilson

I'll offer my suggestion about the inheritance which, of course, you are free to ignore.

I would first decide what you consider a reasonable emergency fund bearing in mind you have a lodger. Let's say you feel £1,000 is necessary.

Then I would suggest you use the other £4,000 of the inheritance to pay off debt, starting with the highest interest rate one.

Redraft your SOA and put the "debt" to your grandmother in the debt section at zero interest. If you want to imprint this concept of only borrowing the money from her then get a small notebook and keep a note of the amount outstanding in there.

Now, budget tighter as has been suggested by others and pay off all the debt. This includes the inheritance "borrowed" which will be the last to be paid since it is interest free.

Whilst rebuilding your position you might spend some time thinking about what you would really like to do with the inheritance. Or have you some plan in mind already?

downshifted

Hi. Downshifted here. Thanks for all your comments.

Most of the £5k is locked away for a couple more years - so using it to pay the debts now isn't really an option at present, however sensible it is. However, we also think she needs to learn to manage these debts herself and understand how to live within her own income - feel the pain as someone said.

There is bad news - there is also an overdraft (I forgot to ask about it when we were doing the SOA as I don't have one!) and there is good news - she has recently been promoted and may get quarterly bonuses (first one is at the end of this month) that will help with the repayments.

It's a fair point about the TV/phone/internet packages being fun and needing to weigh up the value. And she will try to keep a spending diary - and no more Starbucks (there is one in the Sainsburys!) The money has disappeared on holidays she couldn't afford as well as general overspending and obviously she isn't having one this year (we have recently moved to the seaside so visiting us will have to do!)

We are really proud of her for tackling this - she has recently survived another round of redundancies and also stopped smoking in the last six months - she is a great daughter and deserves your encouragement.

downshifted

Oh and the £137 council tax is correct - in the south, a 2 bed middle terrace with (until recently) a labour council.

MarieAAP

Hi Down!!!!!d and D's daughter

I was going to advise to pay off the majority of the debt, and purchase something now to look at to help keep you motivated.

I was given £200 when my Gran died, and then comes a long a massive car repair bill.

Rather than completly rely on the gift from Gran what I did instead, I bought a £35 rocking chair and use the rest of the money for the car. As I have memories of Gran reading to me and my bro in it. It wasn't the most wonderful chair, but I cld sit in it, and remind myself of her, and also know that I still had the car going because of her.

And then when I did have the money again, I went looking for a really comfy one, and found nothing that suited my smaller frame, so I still have it. And the chair holds all mine and my OH's teddies!

But as you have now said that the money 'tied' up, ignore that idea :P

Gd Luck to you both

M

wannabe_sybil

Hi

I rarely post on here, and I am by no means an expert, but Sainsbury deliver, and I have found it easier to monitor my spending shopping online and easily save the £6 maximum delivery charge. Usually my delivery is around £60 per week, which is £3.50 delivery charge. That is for two or three adults and one child. It includes everything except bread, and I consider we live extravagantly

(actually, not exactly everything - look at Approved Food in the Food shopping section of this site, I spend around £40 per month there )

Shopping online is also a good way of avoiding impulse buys.