Bank has encouraged son Debt

poppasmurf_bewdley

stuart30 wrote: »

I'm a bit confused..why should the army teach him how to budget his money.


None of my employers ever taught me how to budget and i'd have told them to clear off if they tried...so why should the Army.?


Sorry but ive worked in plenty of places were squaddies hang out and believe me there very similar to students...think nothing of a !!!! up every chance they get and wonder why there skint.

To most new recruits, the Army is in 'loco parentis' (ie in place of parents), especially in the first few weeks of training when it's probable that these youngsters have never been away from home before.

New recruits spend a lot of time in classrooms learning all sorts of things not directly related to fighting. I'm not saying that financial management should be a compulsory part of the agenda (but think it would be a good idea of it was) but it could be offered as a voluntary part of their training.

Judging by the number of squaddies who do get into a financial mess despite being on a reasonably good salary, it would seem to be a good idea. Not just my son or the OP's son, but most squaddies I've met seem to be in some financial mess.

EssexHebridean

The reason people suggest that the forces might take a hand in encouraging recruits to understand financial responsibility is because in the majority of cases someone signing up at 17, it's their first serious earning role, and tends to come with accommodation and food for pennies, all things considered, plus working clothes and a lot of training/educational courses provided FOC. That leaves young people with a LOT of disposable income, and if they get used to having "all that" to blow on nothing very much, then that's not a good grounding for the future when perhaps they want to leave the forces and move on to the real world. It's one reason why a LOT of ex servicemen find themselves in financial difficulties. It;'s a relatively unique situation for a 17/18 year old to find themselves in, and really isn't particuarly comparable to a role "outside".

OP your son might find the Padre on his unit to be a helpful person to talk things through with? I'd also strongly suggest that you give him all the backup you can with budgeting, and working out a plan for him to pay back what he owes, but to NOT give him financial help to do so. That,. more than anything else, will help him to learn the lesson. How do I know this? Well at 18 I was in a broadly similar position - the job role was different, but the increasing overdraft/CC limit (thanks First Direct) were pretty much the same . I got in to the tune of around 3k before I realised I was way over my head. In 1990 3k was a lot of money for someone earning £130 per week to pay back... :eek: Parents sat me down, took me through everything I needed to do...then refused point blank to reduce the "keep" I was paying, or to give me any cash towards paying it down. At the time this seemed brutal - now I'm massively grateful to them.

Is he on a unit where they operate PAYD? If so the basic for this can be taken from his pay at source can't it ion the same way that the cost of SLA is? Might be worth him arranging that if it's possible. I know the basic PAYD options aren't great, but in theory at least they're vaguely nutritionally balanced...ish. (They don't call it pay as you starve for nothing, do they!)

You're right about the bank facilitating your Son's issues, but at the end of the day, he's physically signed on the dotted line, or tapped in his pin code to get himself to where he is. Letting HIM feel it's the bank's fault probably isn't going to help him much at this stage.

Helvetica_Van_Buren

recovery27 wrote: »

My Son [...] decided to approach his bank for a car loan to help buy a car for travel.
He went in with no outstanding debt and came out with £5000 car loan,

So ... he got what he wanted?

recovery27 wrote: »

[...] £200 overdraft and a credit card that he was advised "would improve his credit rating"

Why did he agree to this?

recovery27 wrote: »

8 months later he now is 3 times over his overdraft (£600) maxed out on his credit card and is struggling to pay for basic food on base. How has this happened?

Why does your son continue to overspend like this? Why does he not have any self-control? Where is his money really going?

recovery27 wrote: »

Yes he was given the talk about budgeting and only using his overdraft and credit card in emergencies, and to pay off the following month.

For all the good that did.

recovery27 wrote: »

At the end of the day as a younger adult the temptation is there,

If you make excuses for him, how is he meant to learn?

recovery27 wrote: »

I full acknowledge the fault lies with my son

Correct.

recovery27 wrote: »

BUT surely the bank have a responsibility to managed their younger customers, and not give them the means to get themselves into so much debt.

No.

recovery27 wrote: »

Ill advice from HSBC, giving customers things they didn't ask for(credit card/overdraft)

Yet he agreed to those services, and used them with gusto.

recovery27 wrote: »

clearly they are not a very ethical bank.

They aren't responsible for your son's inability to manage money.

recovery27 wrote: »

Any advice on how best to help him out with his, and are there anyway to recouple some of the ridiculous bank charges he has amassed on top?
Thanks

Encourage him to learn from this life lesson; not to overspend and take responsibility for his actions without looking to blame others for his own poor choices.

Tell him to save for the things he wants.

Ask him what he's REALLY been spending his money on.

You're welcome.

recovery27

Well unfortunately accommodation is taken out at the first of the month, but food is a pay as you dine daily charge. As well as other normal weekly costs( having to shave each morning etc). Hopefully he is learning a hard lesson, just makes me annoyed that the banks allowed him to go so far over his overdraft. He has phoned them to ask to extend the overdraft for a few months so that he can pay it off but they have declined, I guess they make more money charging him unarranged fees.

recovery27

Not sure what your implying about me quizzing him about what he REALLY is spending his money on. As you would know they are regularly drug tested in the Armed forces and he has never had an interest in gambling, just a normal young lads that likes to go out with friends and party. How much do you think a basic soldier is paid after charges, because it aint that much.

Regards,

glentoran99

recovery27 wrote: »

Well unfortunately accommodation is taken out at the first of the month, but food is a pay as you dine daily charge. As well as other normal weekly costs( having to shave each morning etc). Hopefully he is learning a hard lesson, just makes me annoyed that the banks allowed him to go so far over his overdraft. He has phoned them to ask to extend the overdraft for a few months so that he can pay it off but they have declined, I guess they make more money charging him unarranged fees.

so the banks are wrong for giving him credit in the first place and still wrong for not giving him more?

DCFC79

recovery27 wrote: »

Well unfortunately accommodation is taken out at the first of the month, but food is a pay as you dine daily charge. As well as other normal weekly costs( having to shave each morning etc). Hopefully he is learning a hard lesson, just makes me annoyed that the banks allowed him to go so far over his overdraft. He has phoned them to ask to extend the overdraft for a few months so that he can pay it off but they have declined, I guess they make more money charging him unarranged fees.

Could you not help with the overdraft ?

Its his credit history he is or needs to i prove.

EssexHebridean

DCFC79 wrote: »

Could you not help with the overdraft ?

Its his credit history he is or needs to i prove.

Better for him by far - and far more of a life-lesson, if he sorts it out for himself.

OP - something he might find useful is if you go through the SOA that is used on here, with him. That way he'll see what money he *should* have free after his accommodation and PAYD is accounted for. For breakfast at least he can make a saving and be sure of getting square meal by buying a box of cereal and big bottle of milk, I think? He's not going to get much cheaper for the other meals than the subsidised rates though I don't think if my recollection is correct.

Dobbibill

recovery27 wrote: »

Hopefully he is learning a hard lesson, just makes me annoyed that the banks allowed him to go so far over his overdraft. He has phoned them to ask to extend the overdraft for a few months so that he can pay it off but they have declined, I guess they make more money charging him unarranged fees.

Tell him to deal in cash for any spending.

You say the banks 'allowed him' to go over his overdraft but if he spends on his debit card and it's approved at point of sale they cannot decline it later. (eg - you can't walk into a shop, walk out with goods and then decide later you aren't going to pay)

Most banks have internet banking, mobile banking apps and text alerts to tell you how much you have. If it's a minus figure then he shouldn't be continuing to use his card.

I agree with PPs, get him to do a SOA. He can only party on his disposable income. If that means it's once a month, rather than once a week then that's what he will need to do.
I would not bail him out yourself, the lesson will last longer if you give him advice and support to get himself out of this. He will thank you in the long run.

As a side note, if you ask nicely banks are normally happy to refund the first instance of unplanned charges. It's not guaranteed, but worth asking and he needs to have a plan in place not to keep exceeding his OD.

MrsTinks

recovery27 wrote: »

Not sure what your implying about me quizzing him about what he REALLY is spending his money on. As you would know they are regularly drug tested in the Armed forces and he has never had an interest in gambling, just a normal young lads that likes to go out with friends and party. How much do you think a basic soldier is paid after charges, because it aint that much.
,

Navy brat here - as in grew up on bases around the world thanks to my family moving until the day my stepdad retired. So been around all the services for a wee while.

I think most of us known about the drug testing here - however it's perfectly possible to do £100-£200 in an evening when you're out drinking with squaddies. Trust me on this... Been out drinking with a fair few of them over the years *ahem*

However, there is a difference between going out and spending say £25-£30 getting happy (or having a few before you go out) and the attitude of a lot of the squaddies I knew (maybe your son isn't one of them, I don't know him specifically) was that they would drink until the card bounced. Your son may be the most sensible when you're around, but when he's out with his mates then trust me it's a different game altogether.

Contrary to what that sounds like I'm actually not criticizing him as much as you'd think. He's a lad, he's serving his country and he's considered old and responsible enough to give his life for the safety of the rest of us. Now please give him the respect that he's earned in making those choices. He's human and he's young. Guide him and stop letting him think it's ok to blame others for what faults he has made. He can get out of this, if he comes on here and posts his SOA we can work with him and find out how he can get this sorted. There are also specific services in the Army that will help him with this if he only asks. Of course the bank won't lend him even more money. He's already proven he can't manage what he has!

He's doing a great thing in the army, now he needs to bring his financial life up to the same grown up level as his career life

We'll be here to help him if he wants it