A salutary tale...

micktheknife

I thought I'd share a recent experience with all of you money savers here.

I've been a lurker on here for many years and often read tales of woe thinking "I've a good handle on things, that couldn't happen to me"
Guess what, it just did happen to me, and from an angle I never considered.
I'm married, 50, reasonably well paid, bit of savings, house nearly paid off.
My daughter (20) is a bit slapdash about finances or so I thought.
I didn't realise she is a complete muppet.
Last August she told me she had enough money to go on holiday - RED FLAG - I missed this, never had a child pass up money before. At the turn of the year noticed more than usual volumes of white bank style letters coming in door - RED FLAG - I missed this also.
Noticed the odd message on answering machine asking daughter to contact bank/credit card co, was told this a security issue - RED FLAG - another opportunity missed to nail the issue early.

Daughter has car accident two weeks ago, poop hits fan, no car insurance, apparantly bank bounced ins co DD, ins co cancelled car insurance.

So starts the tale of woe.
The finance for the holiday last year came from a payday loan company called Edinburgh Cheque Centre, she started borrowing £200, but was soon up to the max of £650 per month, paying back £725 30 days later. Due to them taking all of her money out on the 1st of the month she was then forced into a perpetual cycle of payday loan slavery. She was too embarassed and frightened to tell me what had happened. She had a credit card with GE Capital One, her minimum payment direct debits were being bounced by her bank due to no money in account at a cost of £25, Captital one then hit her with monthly missed payment fines of £12 plus failed direct debit fines of £12 per month, plus compounded interest of nearly 30%.

6 months is all it took to get in a hell of a mess.
I have had to use all of my savings to clear this mess up, only a week or two away from court action. I've also had to pay for another credit card £500, repairs to her car £500, and repairs to the back bumper of the car she hit £900. Fortunately for her the guy appears to be a nice guy and isn't reporting her to the police for being without insurance.

All in all total bills of around £3000.

Actions agreed with daughter - for a period of 12 months:
1) All cards taken away
2) All debts cleared by me
3) Monthly budget arranged
4) Money taken out of her bank by me, a cash budget given over weekly
5) Payment plan to repay (some of ) the money I had to spend
6) I reserved the right to read any and all financial corespondance.

I'm hoping by these actions to get her into the habit of living within her means and to gradually start taking responsibility for her own finances again.

Morals of the story
When you have kids, it's not only your finances you have to worry about.
Your kids must not be frightened to tell you about money issues.
Look out for red flags, they are red for a reason
Talk to your kids about finances, and make sure they understand the consequences of their choices.
If you have any concerns, make sure you get to see the all the letters coming into your house.
Lastly it's only money, and family is more important, I was gutted she was too frightened to tell me what had happened.


Regards,

Mick
A thouroghly chastened Money Saving lurker.

fozmcfc

Well done to you for helping your daughter out, whilst also getting tough with her. I just hope she doesn't let you down, because she really does have a second chance.

I guess you could say every cloud has a silver lining, because she could have been 5 - 10 times more in a financial mess if the accident hadn't have happened, by the time you found out.

There will be others around here who will say it's your daughters mess, she's 20 and old enough to sort it out for yourself, but if I was a father, I'd hope I'd take the line you have.

Dabooka

Nice post.

I suppose there's need to be kind of glad the accident occured and brought this to light. I just hope other than her car damage there's nothing else to pay out.#

I must confess with out the bank of mum I'd have been scuppered a couple of times, and yes I paid (most) of it back beforeI get flamed for it. I undertand how the hardest bit being she didn't feel able to tell you, but at least that shouldn't happen again.

paddyrg

Hiya, thanks for sharing! Only thing I would say is don't take over her finances as that way she will always be a child/dependent/irresponsible. By all means help out now, do all the good parent things, but seriously also give her some kind of accelerated payment terms - she takes a second job to pay you back, or whatever, and from this she will learn more about the cost of money than a straight rescue! BTW you sound like a great parent - are you looking to adopt a 38 yr old bloke?

anxious_mum

How lovely of you, what a great dad you are. I hope your DD realises how lucky she is to have you x

geoffky

i raise a glass of respect to you...i have drummed in to my 21 yrs old daughter the message of how evil debt is from a early age and so far it has worked,we had to loan them just over 1k as the boiler packed in and it was laid to rest and i hope that is it...it must of been very hard to see all your hard earned money going to these scum loan companys and i would say never again after this first time...good luck..

micktheknife

paddyrg wrote: »

Hiya, thanks for sharing! Only thing I would say is don't take over her finances as that way she will always be a child/dependent/irresponsible.

LOL - I agree with the taking over the finances in general, but she is so far in the doodoo she is really emotional about it. So.... We will run things for as short a period as possible, with an absolute limit of 12 months.
Regards, Mick.

t508

Good on you. We would all do the same thing if we could I'm sure. the real eye opener is the too embarassed to talk about it. Will think alot about that one i'm sure.

Tupperware_Queen

wow, glad you are getting things sorted. I think your response is much better than just bailing her out and saying 'there there' as she will hopefully learn from this, and not get into a mess again.