Looking for help in the best way of paying off large debts

kimwp

lilmorph said:

kimwp said:

I'm curious to your "one size fits all" comment - what solution do you think is being recommended that is one size fits all?

Basically, leave him to it, don't help him financially, he needs to do it all himself. I don't like the idea of leaving this to a sink or swim task which if it fails and ends up beyond redemption and he is kicked out of his flat, his partner leaves him and he then moves back in with his mother, then has maintenance payments on 2 kids, loses his job and still has a pile of debts and clinical depression. That is a worst case outcome but even just one of those happening is not something I would want on my conscience. I am thinking of taking a middle of the road approach to this, so working with him to take ownership to sort it, while helping both with advice and if required funds to make it happen quickly. Yes, if the first part is great and I don't need to invest in this recovery then great but I also want this sorted ASAP.

   

Thank you for explaining. He won't get kicked out of his flat if he pays the rent. He will be able to pay the rent if he has a sensible living budget, which means he needs to define a sensible living budget, live within it and only pay what he can afford towards his debts. (Helping him define a budget is a good thing to help him with and also helping him write to his creditors to tell them the new amounts if he can't manage this by himself, though this is often part of taking control of the situation). He doesn't need any additional money (particularly if he has a good wage as you said) to sort this situation. But he does need to learn to live within his means otherwise you will continually need to bail him out.

I think because most of this thread has been about trying to persuade you that the best way to help is to help him learn to help himself, we've not spent enough time on how manageable and solvable this situation is, which is very very very solvable. Or at least very solvable in terms of the finances of the situation - it's changing financial behaviours that are the difficult thing, but the most important - and that's why we are trying to persuade you that you need to help him with that by letting him drive the changes. You can step in before he sinks if he doesn't learn and ends up short on rent, but you need to give him the opportunity to swim.

Just ask if you need any advice on a sensible budget or what to write to the creditor's.

enthusiasticsaver

One of the hardest things about parenting is having to stand by and let our adult children make mistakes because they normally learn from them.  The worst case scenario you paint should not happen if he learns to budget and live within his means.  Bailing him out means he never addresses the problems and invariably the debt tends to increase over time.  With a second child on the way and in his mid 30s it is imperative he now learns how to live within his means. 

Learning how to budget and prioritise is the first lesson.  What he pays to the DMP is up to him and what he thinks he can afford.  If he has been bullied (unlikely) into upping the payments by Stepchange he is best working out a proper budget and telling them what he will pay. The debt presumably is all unsecured so the debtors have little option but to accept what he can afford. Trashing his credit record is no bad thing because it should force him to live without relying on credit.  Prioritising rent, utilities and food above debts is the first thing he needs to do. He is working and has a supportive family so he can sort this out but he has to want to himself. 

EssexHebridean

lilmorph said:

kimwp said:

I'm curious to your "one size fits all" comment - what solution do you think is being recommended that is one size fits all?

Basically, leave him to it, don't help him financially, he needs to do it all himself. I don't like the idea of leaving this to a sink or swim task which if it fails and ends up beyond redemption and he is kicked out of his flat, his partner leaves him and he then moves back in with his mother, then has maintenance payments on 2 kids, loses his job and still has a pile of debts and clinical depression. That is a worst case outcome but even just one of those happening is not something I would want on my conscience. I am thinking of taking a middle of the road approach to this, so working with him to take ownership to sort it, while helping both with advice and if required funds to make it happen quickly. Yes, if the first part is great and I don't need to invest in this recovery then great but I also want this sorted ASAP.

   

I didn’t recall anyone suggesting to just leave him to it? I think perhaps you may be misreading. A lot of us with experience of this aspect of debt have suggested that you definitely DO offer help and support, just not giving him money as realistically history suggests that is most likely to simply be adding more debt to what he already owes in the long term.  It doesn’t need to “happen quickly” remember - it needs to take time, that is the point as that is how the good habits are ingrained and the lessons are learned, and those are the things that will ensure that he has a happy, independent financial future. 

lilmorph said:

Rob5342 said:

lilmorph said:

Rob5342 said:

Of course it's up to you what you do, we can only offer advice based on our own experience, but a lot of us have been through similar experiences.

I think you need to look at this long term. 6-10 years to pay the whole balance might be 4-6 years once he gets on a budget and has put money aside for settlement offers. That's not all that long if it gets him into habits that stop him getting into debt again for the next 30 years. Alternatively giving or lending him money now might mean he never learns those habits and ends up back in the same position in 10 years time.

That is my big concern about breaking the habits that got him there. The inability to get a new credit card or loans for a few years is obviously a help.

That's what really helped me. Once I started a DMP and stopped having access to credit then I absolutely had to stick to my budget and maintain an emergency fund as there was no fallback. It felt quite scary at first but has been hugely beneficial as I've now completely changed the way I manage things.

Be realistic about how quickly he'll be able to change his habits. I was serious about sorting things out.when I started a DMP and had a budget drawn up, but it was at least a year before I was properly in the new mindset.

Yes, the time taken for him to get in the right mindset is a worry but I think it has started. If he needs micro-managing to get there then so be it. I'm sure he'll hate me for it but the sooner he proves he is understanding the sooner he can get me off his back. 

This is a very valid point - be extremely cautious about micro managing or making him feel you are “on his back” as that may well damage your relationship irretrievably- this really needs to be an approach of being generous with the support and suggestions, but giving him room to feel like he still has autonomy over his situation, IMO. 

Sea_Shell

@lilmorph

I pretty much agree with all the other posters about helping him budget, but not lending (gifting, in reality) him any money...at least not yet.

What I would be asking him, is what measures has he taken to address his outgoings since this all blew up and you became involved?

Can he name, say, 6 things to you that he had changed or is cutting back on since then?

This might be things like cancelling any subscriptions that are out of contract.
Reducing groceries spending on non essential items, or "down labelling" on essentials.
Foregoing a weekly takeaway, meal out etc etc. 
NOT buying something that he would have otherwise bought on impulse (gadgets, clothing etc)

It could be anything, depending on where his money was going.

Once he can do that, and demonstrate that his is willing to make changes and/or sacrifices, then you can build from there.

kittykate7

Hi, it's a small thing but can he sort something out with his work to keep his entertaining expenses separate from his personal expenses?

foxgloves

Yes, I agree with many previous posters, that this is a budgeting problem......or to be more specific, it's what happens when there hasn't been any budgeting for years & all those debt-laden chickens come home to roost. How do I know this? Because I was that person. No, I didn't have as much total debt as your son, but I had plenty, as a result of overspending my income every month from the age of 19 to 43 (when a pretty huge lightbulb suddenly pinged on in my head & I began the much-needed reformation into a responsible budgeting being!). During my endebted years, my parents kindly bailed me out a fair few times. I was so grateful for this at the time, but with hindsight, I know that their generosity in wanting to help actually delayed the point at which I finally saw the light. I would have had no option but to sort out my very irresponsible attitude to money a lot earlier. The turning point was realising at last that it wasn't what I earned, or what my essential outgoings were or any of the other excuses I used to explain my debt levels, it was simply me choosing to overspend more than I earned every month for very many years because I never ever bothered to budget my money.
Learning to do so has been utterly empowering & I am now both debt & mortgage-free. Even long standing bad financial attitudes can change. I am proof of that, if nothing else.
F

LoulaBelle

Has your son asked his company for a work expenses credit card? this may help him going forward rather than use his money and then claim it back on expenses.
 

lilmorph

kittykate7 said:

Hi, it's a small thing but can he sort something out with his work to keep his entertaining expenses separate from his personal expenses?

LoulaBelle said:

Has your son asked his company for a work expenses credit card? this may help him going forward rather than use his money and then claim it back on expenses.
 

Sorry for the delay in replying I've been trying to get him aligned on paying the right things off.

They apparently don't do a work credit card, which is an issue. I've given him a card on my account on condition when the expenses come in from work it is paid to me, no delays, no excuses. The other condition is if it is used for anything other than expenses or not paid the card will be stopped.

itchyfeet123

I'm just an internet stranger so feel free to disregard, but I don't think your son is being honest about work expenses being the driver/recent challenge to his situation. Is there any chance of drugs, gambling, or similar?

LadyWithAPlan

Have you thought about ynab for your son? I think it could be a brilliant LBM for him - it connects all banks,  credit cards and also makes you assign cash only as it comes in so it stops you using the credit card float which has got him here, YNAB makes you only assign cash you have and when it arrives, no future payments in so it quickly shocks you to see how few of the vital categories you can fill up eg this months rent and food plus 17 dd's etc 

I have been a paper and virtual budgeter /s/sheeter for years and always pay my cc in full every  month but I have been amazed how great ynab is at really showing you in one snapshot how spending in one area impacts everything. I always have a large cash float as I am SE so I can overspend in areas which just  means for me I save less  but ynab really shows where you are in that moment not when future money arrives.so shows you the opportunity cost.


You can add loans you paying off on it and it will track how much its going down plus the TOOLKIT reports give brilliant breakdown of spends. There is literally nowhere to hide overspending on it. You can also set up cc loans and put payment or date  targets  so it shows you what you need to pay off each month etc 

It would also destress him as he could build a workable plan. Yes you can build a dashboard and s/sheets but for under £100 a year just buy the software and make him use it 

There are some great YT videos on ynab by Nick True Mapped Out Money (better I think than the ynab ones) 
Reddit has a thread on ynab as well where people talk about how it has changed their spending and got them out of cc debt fast .. I am already a  budgeter but I believe them cos it is already influencing my decisions and making me more specific on my spending so i can achieve my goals. 

You could help him set it  up - I suggest doing so whilst watching the mapped out money beginner 2022 guide
Either way both your DS and his partner if they share all expenses  and income  and decide at the beginning of the month their living expenses inc a budget for kids could both access the ynab app as its on mobile and also on the web. so they can see all dd's hitting various banks, check their grocery spend is within set parameters, know they need to spend x a month on nappies, rent, fuel etc so that is something they have to assign money to. 

If you wanted to get involved at the beginning to guide them then great but ynab once set up takes a few mins every day max if there are two spending on it. Plus the money assignment when cash comes in and reconciliation so maybe an hour once a month.



There is a 34 day trial and then its an annual fee of £84 or a monthly  £12 something - you could pay for that and insist he shows you at least weekly reconciled accts on there. In YNAB showing him where he is at he & his partner could change his life in a positive way forever.
You can have more than one budget on ynab so in theory otherwise you could set it up for him with him agreeing and you could keep an eye  on it but realistically ynab would be the software to have him see the problem of too much outflow  and address it real time for himself but you could then step out when he is ready.