Best way to help when child is in financial crisis

Mumtomany

Hi

So, she’s gone and done it. Got herself into debt, too proud to ask for help but has got to robbing Peter to pay Paul. She works around her studies. A harsh talk and reality check leaves us clearing her excess debt and arranged a sensible payment schedule so that the money is repaid. Lessons need to be learned and we cannot afford to give her the money.

My question is, her future maintenance loan will be paid to her monthly (via us her parents) so that she doesn’t blow it all in one go and hopefully eliminate her poor money management badly again. How do we pay it so that it doesn’t look like we’re taking her payment even though she’s having it back every month? I’m not sure I’m making myself clear. Basically, she will pay us her loan 3 times a year and we will give it to her divided over 12 months but we don’t want it to appear that our bank account is wealthier than it actually is, could this affect her future student finance applications?

Gosh I thought newborn baby stage was hard, teenagers and uni students is another level of parenting

Thanks

agrinnall

It might be overkill, and she'd need to co-operate, but you could get a Financial Lasting Power of Attorney over her affairs, then she can open an account specifically for this money to be moved into 3 times a year and out 12 times a year that can only be operated online and only you have access to it. That way the money remains hers but access to it is controlled by you.

silvercar

She needs a second bank account, that she can feed monthly amounts to and leave the loan going into a different account.

Obviously she needs help with budgeting, but one thing to consider is whether it is actually possible to live on the amount she receives. As Martin lewis has said in articles, the loan amounts are often not sufficient to pay for rent/ hall fees never mind everything else. Also not all parents are passing over the amount the government uses in calculating the loan size.

Mumtomany

We support her financially too. On paper, in theory, with her job and our help she can afford to live, not a life of luxury by any means but enough to get herself by with the odd night out. Probably not the uni lifestyle she envisaged but ....

I!!!8217;m worried that if she has control of the second account that will give her access to the loan and she can blow it again? I know she has to learn but money management skills take time and this is her last chance, we can!!!8217;t bail her out again as we aren!!!8217;t in that position now.

Thanks

Spendless

Maybe I've misunderstood what you're asking but if not surely it's a simple maths equation to show her?

eg for simplicity lets say her loan is £6,000 p.a and is paid in equal chunks through out the year

She will pay you £2, 000 3 times a year (6000/3 = 2000)

And then from that £2,000 you will pay her for the next 4 months (because there are 12 months in a year, so 3 x 4 months = 12 months) until her next loan amount comes in, so each month you would pay her £500

(2000/4 = 500)

so she gets 3 lots of £2, 000 = £6,000

and you pay her £500 x 12 = £6,000

Obviously adjust this to the money that comes in each time and how you'll dish it out.

agrinnall

Spendless wrote: »

Maybe I've misunderstood what you're asking but if not surely it's a simple maths equation to show her?

You have misunderstood. The OP's question is not about the maths but about ensuring that the money doesn't appear to belong to them rather the daughter, as SFE may take that money as being parental income and so reduce the amount of future loans. Which is what could happen with the method you describe.

Spendless

Mumtomany wrote: »

My question is, her future maintenance loan will be paid to her monthly (via us her parents) so that she doesn’t blow it all in one go and hopefully eliminate her poor money management badly again. How do we pay it so that it doesn’t look like we’re taking her payment even though she’s having it back every month? I’m not sure I’m making myself clear. Basically, she will pay us her loan 3 times a year and we will give it to her divided over 12 months but we don’t want it to appear that our bank account is wealthier than it actually is, could this affect her future student finance applications?

Gosh I thought newborn baby stage was hard, teenagers and uni students is another level of parenting

Thanks

agrinnall wrote: »

You have misunderstood. The OP's question is not about the maths but about ensuring that the money doesn't appear to belong to them rather the daughter, as SFE may take that money as being parental income and so reduce the amount of future loans. Which is what could happen with the method you describe.

I was responding to the bolded bit, which admittedly I should have quoted in my above reply, as I though it was student daughter that didn't understand how she was getting the whole amount back. Thank you for the clarification.

Mumtomany

Sorry new to the forum, I’m not sure how you use the quote facility when using your phone !!!9786;!!!65039;

“She won't learn if you are holding her hand OP”

Thank you, yes I understand that, hence why she is going to pay it back to us and have a year of no budget for reckless uni nights out !!!128514;

Mumtomany

“You have misunderstood. The OP's question is not about the maths but about ensuring that the money doesn't appear to belong to them rather the daughter, as SFE may take that money as being parental income and so reduce the amount of future loans. Which is what could happen with the method you describe.”

As above, not sure how to use the quote facility yet via my phone, but yes, that is exactly my question. Thanks for explaining it much better than me

silvercar

Mumtomany wrote: »

“You have misunderstood. The OP's question is not about the maths but about ensuring that the money doesn't appear to belong to them rather the daughter, as SFE may take that money as being parental income and so reduce the amount of future loans. Which is what could happen with the method you describe.”

As above, not sure how to use the quote facility yet via my phone, but yes, that is exactly my question. Thanks for explaining it much better than me

Which is why I suggested your daughter open a new account to receive the loan, set up a monthly transfer to the existing account to use day to day. Hide the password/ debit card for the new account so it can't be miss-used.

PasturesNew

Get daughter to set up a new account, but at your address - then seize her mail .... and from that account, pay monthly money into the account she has control of/uses.

Just make sure you seize all her mail that comes from the bank to your address....