Lending to daughter

Spicey

My 23 year old has so far lent over £3000 from me. Always promising to pay me back. Yesterday she was again crying because her outgoings were more than her income. She graduated from uni in the summer. I have discovered that she owes £2000 to a catalogue, as well as 2 credit cards she has run to there limit, not sure of the amounts. I have told her I am unable to lend her anymore money. I feel that helping her has not tought her anything as she has obviously just carried on spending. I am afraid she is going to get herself into even more mess as I found out she was looking at going to a loan broker. She lives with me and pays £25 a week keep. Am I being unfair or is it time to let her learn the hard way?
Guilty feeling mum.

opinions4u

No point letting her waste your money as well as digging herself deeper in to debt.

Let her learn the hard way (and make sure you keep your cards and cash out of her reach).

her outgoings were more than her income

And this is the crux of the matter. Spend less, earn more or both. More loans will move the problem, but they don't solve it.

She lives with me and pays £25 a week keep

Make sure she continues to pay this as well. Prioritising the roof over her head is a basic part of financial planning.

If she really wants to sort her problems out, guide her to the Debt-free Wannabe board on this forum. Offer her emotional, but not financial, support all the way through.

You have nothing to feel guilty about. Stop being her piggy bank - she's a big girl now.

Spicey

Thanks. She wouldnt dare steal from me as she know I would send her packing.

All_eBayed_Out

I wish my parents had stopped helping me so much all the time. Being made redundant made me wake up and be more mature. I am now quite tight with my money.

opinions4u

Spicey wrote: »

Thanks. She wouldnt dare steal from me as she know I would send her packing.

Fair enough - but there is a risk while she's making a transition, however honest you think she may be.

More importantly is once you've made the decision to stop throwing your money at her problem, you stick to it regardless.

No loans before payday.

No fivers for the day's bus fares.

No extra large birthday pressies.

No "I'll buy that for you" when you wouldn't have done previously.

It's tough. I'm there now ... but stick to it.

(Is there any sort of underlying issue .... depression or the like? ... getting to the root of anything in the background may also help ... so easy to type!).

sp1987

She needs a reality check. Don't feel guilty. She owes you £3000, catalogue £2000 and probably £500 on each credit card? The £2000 from the catalogue couldn't have even been anything she needed as she lives with you. Student loans too? Overdrafts?

She needs you to help her by ensuring you don't help her get in a worse position. Keep taking her keep and feeding her. She will have to learn to budget her money and spend accordingly. Luckily she has the buffer of not being homeless and destitute in order to do this.

Maybe offering to help her find a second job? If she hasn't got time to do one then she hasn't got time to spend the money from one and the fact she needs one to support her spending may make her look at that spending. Help her up her income, reduce her outgoings...but don't start giving her your money which will just give her more debt and leave you short.

I'm 23 myself and it won't do her any good long term helping her to build up more debt with you or anyone else. Better she is in debt now for under £10,000 than later on for £100,000.

Is she buying a lot of clothes? I can't see too many other options bar clothes and electricals from a catalogue as she's got nowhere to put washing machines and sofas as she lives with you. If she has a lot of decent clothes, could she ebay some? There are often free listing days so even if they don't sell it doesn't cost her anything.

pinkarsenalprincess

She needs to learn the hard way. As others have said, stop bailing her out and 'lending' her money. At the moment there is very little incentive for her to change her ways if she knows that mum will come to the rescue every time she overspends.

sweetilemon

I agree with everyone that bailing her out is not the answer but it is good she has come to you she obviously realises there is problem and wants to sort it. Maybe it would be a good idea to sit down with her and write down all her out goings including catalog payments and digs and look at what she earns and where she could cut back. Does she have a part time job? Could she increase her hours or get nother job? There is a buget planner on here you could maybe do with her. Make sure she realises the consiquences of a bad credit rating i.e. no mortgage or future credit. Good luck.

pinkarsenalprincess

sweetilemon wrote: »

I agree with everyone that bailing her out is not the answer but it is good she has come to you she obviously realises there is problem and wants to sort it. Maybe it would be a good idea to sit down with her and write down all her out goings including catalog payments and digs and look at what she earns and where she could cut back. Does she have a part time job? Could she increase her hours or get nother job? There is a buget planner on here you could maybe do with her. Make sure she realises the consiquences of a bad credit rating i.e. no mortgage or future credit. Good luck.

I am incredibly cynical. She could have gone crying to mum because she knows that in the past it would get her more money.

kerri_gt

sweetilemon wrote: »

I agree with everyone that bailing her out is not the answer but it is good she has come to you she obviously realises there is problem and wants to sort it. Maybe it would be a good idea to sit down with her and write down all her out goings including catalog payments and digs and look at what she earns and where she could cut back. Does she have a part time job? Could she increase her hours or get nother job? There is a buget planner on here you could maybe do with her. Make sure she realises the consiquences of a bad credit rating i.e. no mortgage or future credit. Good luck.

Spicey, I agree with sweetilemon here. In your opening post you say your daughter's outgoings are more than her income, so I assume she is working in some capactiy? If she's living at home, then I assume that she doens't have any 'real' financial commitments such as utilitiy bills, mortgage etc etc, so in a way she is in a lucky situation to be able to deal with this. it seems that her spending has been on entirely non-essentials, whether that be clothes, gadgets, or going out to keep up with her friends.

You need to sit down with her and first find out the actual extent of her debts, plus look at exactly what she has been spending on. Then you need to work with her to work out what her monthly repayments need to be (and I don't just mean minumum repayments, she needs to clear this debt asap) and what she then has to live on (after she has paid you her keep too of course). I expect some of this she won't like as it will mean cutting back on her currrent lifestyle (which she obviously cannot afford to keep up) but it will be short term pain for long term gain once the debts are cleared.

Don't lend her any more money, and don't pay off these debts, she is old enough to take responsibility of this herself, but don't constantly reprimand her about being so silly (although you might feel like doing so). She (emphasis on she here) needs to face this situation and deal with it - she's an adult now and if she's old enough to have credit, she's old enough to learn about what happens when you live to a lifestyle she cannot afford on credit and what happens when this has to be paid back.

Crap_with_money.com

Absolutely don't give her the money, as if you do she'll never learn anything from it!

At 23 I had my LBM and realised I had £18k worth of debt - my dad considered paying it off for me, but we both decided it wasn't the way to go! I'm so glad for that now, I still have a bank loan, but it's now at £4k, and I actually live within my means every month - despite the fact I now have my own home to pay for, which I didn't back then!

It'll be a struggle for your daughter, but she needs to learn to budget, and best to do that while you're still already subsidising her living so much!

Good luck

xx