What interest rate would you charge your family?

izools

berbastrike wrote: »

That's the same thing at the end of the day.

Jesus wept... What do they teach you at University these days? Sure as he11 not how to act like a human being.

Can you seriously not understand the difference? Your poor mum.

System

izools wrote: »

Your poor mum.

Yes, with an offer saving her £1700 per year, poor Mum.

Poosmate

Berbastrike, for what it's worth I am with you.

You really need to know that your mom has had her lightbulb moment and realised that she cannot continue to spend in the fashion she has been - out of control.

You don't say if she is struggling to make the monthly payments, just that she's £10k in debt and paying £2k interest per year and that her cards are almost maxed.

Surely now is the time to see what she does about it first rather than jumping in and saving the day only to find next year you have no money and she has £10 debts again.

I have £10k debts and yes it's a struggle to pay but I go without to do that. I know she's your mom and all but parent's don't (or shouldn't) reward kids for bad behaviour so why should a kid reward their parent for same?

And regarding that "No Charge" song on page one, yes very sentimental and touching but hardly in the same league!

Poo

P.S. I also think Degenerate hit the nail on the head precisely - how come he has 9 or more thanks for his post? (page 2 I think).

Poosmate

Further to my last post, have you seen all of her CC statements and do you know what the balances ae and the interest rates she's paying? Have they hiked the interest rates? And does she realise that she can refuse to pay the rate increase? It would mean the accounts she has would be closed on those she refuses but she'll still be able to pay the minimum payments on them until it's paid off, just won't be able to spend on them.

You could, or get her to, use this useful tool to find out how best to tackle her debts (without bailing her out).

http://www.whatsthecost.com/snowball.aspx

I really can't believe the responses you have had, I mean if the boot was on the other foot and it was a parent asking if they should help out their son/daughter I'm sure the advice would be exactly the opposite as most have given here.

Why is it not ok that a child can teach their parent?

Poo

bouncydog1

OP - can you afford to lose this money as unless your mum has addressed the route of her spending, then by you bailing her out there is a real likelihood that the problem will get worse.

If she only has her income and no other assets, what is going to happen if she cannot repay you. Alternatively she may start off with good intentions but then be swayed again to spend.

What does her partner have to say about all of this?

I do think that before you even think about lending your mum any money at all there needs to be a full and frank discussion with her partner. I have to say that in the event I got myself into debt, the last thing I would want is for my DD to bail me out - money that she has managed to save is hers for her future. Yes we have brought her up and we are putting her through Uni, but we don't want help from her in return - that to my mind is not what parenting is about.

Far better IMO for your mum to start making a real effort to repay what debt she has rather that simply replacing it with a cheaper option via a family member who realistically will not pursue her if she doesn't repay. Get onto the debt free board, get her to do a budget so you can see where her money is going and use the snowball calculator so that she can see how she can repay most efficiently.

Oh and regardless of all of the slagging you have got on here from moral and virtuous individuals who believe you should "give your mum the money because she brought you up" I personally think you come across as a caring person, trying to help your mum.

Wutang_2

bouncyd!!! wrote: »

OP - can you afford to lose this money as unless your mum has addressed the route of her spending, then by you bailing her out there is a real likelihood that the problem will get worse.

If she only has her income and no other assets, what is going to happen if she cannot repay you. Alternatively she may start off with good intentions but then be swayed again to spend.

What does her partner have to say about all of this?

I do think that before you even think about lending your mum any money at all there needs to be a full and frank discussion with her partner. I have to say that in the event I got myself into debt, the last thing I would want is for my DD to bail me out - money that she has managed to save is hers for her future. Yes we have brought her up and we are putting her through Uni, but we don't want help from her in return - that to my mind is not what parenting is about.

Far better IMO for your mum to start making a real effort to repay what debt she has rather that simply replacing it with a cheaper option via a family member who realistically will not pursue her if she doesn't repay. Get onto the debt free board, get her to do a budget so you can see where her money is going and use the snowball calculator so that she can see how she can repay most efficiently.

Oh and regardless of all of the slagging you have got on here from moral and virtuous individuals who believe you should "give your mum the money because she brought you up" I personally think you come across as a caring person, trying to help your mum.

Are we now at the stage of repeating the same points? Thats come round quicker than I expected - shall I start doing the whole "but its your mum" thing again or is that too early?

carlw

I was in a slightly similar situation about a year ago with my Brother. He is awful with money and had run up 14k in credit card debt, and had been paying £250-£300 a month as minimum payments for years just to keep the balance the same. I didn’t have £14k but I did have some money which id been saving to move and i do have a good credit rating so I contemplated lending him money, or borrowing on 0% cards on his behalf. Before i did this i spent weeks sorting his finances out, I went through all his statements and put together a SOA, I set up DD's or moved dates so payments weren’t missed (he was getting £100 a month in charges), reclaimed charges, cancelled cards, changed suppliers. It was hard work but at the end things didn’t look that bad at all, i had lost lots of nights sleep worrying about it (probably more than him). It was quite a relief at the end to see he had plenty of disposable income, he was just really unorganised and wasted lots of money. I decided the best solution for him was a loan at 7.8% over 4 years. He continues to pay £300 a month but will be debt free at the end of it now. I would seriously consider spending some time getting your mums finances in order before you decide how you can help financially, this will be worth just as much in the long run.

System

I have decided to not loan her the money. Some comments have made me wary and now I think it is too risky, if she starts spending again/we fall out, then I am in big trouble.

I will now try my best to get her the best deal possible with either a loan or balance transfer card but I don't think anyone will give her a balance transfer for £10000 when her salary is around £22000.

bouncydog1

I think that is an excellent decision for you to make. This may really give her her lightbulb moment! Suggest that she looks at the debt free board as well as there are very good suggestions on there to help her save money. You might also want to suggest that the quicker she gets on top of things and organises herself the more comfortable a retirement she is going to have!

I would also get her fully involved in the process of sorting her finances out otherwise she will just ignore the problem by passing responsibility on to you.

izools

berbastrike wrote: »

Yes, with an offer saving her £1700 per year, poor Mum.

You know, to some people £1,700 is not worth more than love, affection, appreciation, understanding, and respect.

You clearly are lacking in these areas if you fail to comprehend the difference between insisting on charging interest from the outset, and being offered it as a goodwill gesture.