How do i stop my 18 year old son taking out loans and getting in to debt?

nomoneytoday

I believe the saying starts, "You can lead a horse to water..."

MonkeyMad

I have always made it clear to my children that I would help them in times of dire need, but I would not be providing them a lifestyle, especially spending on discretionary items I do not use, gym and phones for example. If I ever paid for these items I would either expect them to be cancelled or I would take ownership until I got the money back.

As long as you demonstrate you are willing to be the lender of last resort you will be called upon, so you need to introduce the theory of moral hazard and refuse to pay. The best lesson will be hard-learnt

vuvuzela

star-fire wrote: »

I wouldn't take much notice of the phone call about your son being approved for a 5k loan this is obviously not a high street lender as they wouldnt discuss your son finances with yourself, but will most probably be a loan broker so the chances of your son recieving this 5k loan is very low.

Exactly. And he may well have paid a fee of 50 quid to them for this useless non-existent loan.

paddyrg

Sorry, I am with the others here - one bailout was a nice parental lifeline, and naturally a part of cutting the apron strings. Two was generous, three sets a pattern and confirms his behaviours. To understand the value of money, he needs to understand the value of no money, to choose between luxuries, not have them all.

Once the panic sets in and he feels the pinch, your best help is to then start him understanding about cutting back (cancel gym, phone onto 10/month PAYG, bike to work in this lovely early spring, etc), and living within his means. And also pointing out that it's not unusual in many countries to take a second job if the first one isn't enough for him - working evenings in a garage/pub also prevents you from spending at the same time!

I speak as someone who's been in your son's position in the past, one small but generous bailout to get level then learned how to be a bit smarter.

VoucherMan

Why is he able to take out these loans?

Perhaps because he is now an adult and therefore considered responsible for his actions.

So let him deal with it.

27col

He is never going to learn financial responsibility if there is someone in the background ready to clear up the results of irresponsible financial behaviour.
You have to cut him loose, so that he will start to realise that all actions have consequences.

Elvisia

My friend does this, he builds up loans and then says he's budgeting in order to pay them off, but then I find out his dad has paid it off for him as he goes whining to him and says the loan is stressing him out and ruining his life. He does this at around the £24k mark. Then he goes and borrows more money! His dad is very wealthy and has already bought him a flat in London, and gives him about £800 a month allowance, and he still manages to get into debt every time.

My point is that his father just enables this behaviour by constantly bailing him out. My friend also gets loans through his father's bank and uses him as a guarantor. I can't see this behaviour ever changing unless his father puts his foot down and says if he gets into debt, he has to solve it, even if that means selling his flat and living somewhere less glam.

InsideInsurance

How did you teach your kid not to steal? Not to play with matches? Not to lie? To go to school?

Seems odd you need parenting lessons in this one area.

However your kid is not a child now and probably the opportunity to fully educate has gone. Agree with the others regarding the school of hard knocks, refuse to be a guarantor for anything and let him sink or swim on his own. Worst case he cant get more finance or work in banking for 6 years

DCFC79

You could try talking to him but if that doesn't work then you might have to resort to tell him to leave as been suggested.

50quidonRED

Can i ask how exactly he managed to spend £950 in a weekend?

Sounds like a gambling problem, then taking more loans to chase losses. From some1 who's been their and done that. good luck.