Money Moral Dilemma: Should retired parents pay off their daughter's debts?

philossify

Been there, got the T-shirt

IMHO giving her more money to pay off this cycle of debt and advance to the next one is a mistake, especially as it is not really affordable and you've already "done your duty by her", twice already. Much better, I think, is to devote more TIME to your daughter and the grandkids and her problems if she'll let you. Look after the kids (you get to spend more time with the grandkids :j :j :j ) whilst she works or looks for work - if she can't afford a car then be prepared to act as an unpaid taxi - all the usual things loving parents do for their kids and grandkids - BUT do not give her money directly (a little bit of money indirectly is ok, but only from your "pin" money).

Advice form CAB and possibly bankruptcy sounds like a good option though if (as I suspect) you love your daughter and kids then are you, for example, able and prepared to take them in if social services can't find them accomodation in the short term or to subsidise a move (guarantor/deposit provider for rented accomodation). If your anything like me then you don't want to live with your chid/children long term (or they with you). The biggest problem you may have is the daughters attitude to you trying tough love. It's important that, whilst not bailing your daughter out, you don't leave her feeling unloved, optionless, and isolated - a tough balancing act.

The most usual reason for getting into this sort of debt situation is through spending more than you can afford. That seems an obvious statement but I am constantly amazed by the number of people who do this. I've been financially stretched a couple of times , particularly after my divorce - and got through it by several years of being THRIFTY. The word THRIFT seems to be unknown to some people- I suspect this daughter is one of them. With imagination life can be very enjoyable without spending vast amounts of money, too many people don't seem to get that simple fact either (mind you it's unlikely that any of those are reading this forum :eek: )

Sweary

Having been bailed out twice by my parents, once before and once just after uni I swore never again. The fact the daughter in this instance is happy to be bailed out a third time is slightly worrying in my view. That said, in many situations like this, it's nobody's fault.

The daughter may well be a repeat offender who expects the Bank of Parents to bail her out every single time. However she could just as easily be on a very low income or maybe she had a high mortgage in the first place and was caught out by rising interest rates. In either case, her parents need to find a way to help and support her which will allow her to earn more or make more of what she does earn but at the same time, take responsibility for her own life and paying off her own debts. It sounds harsh but if you get into debt, it's much healthier for everyone if you can dig your way out of trouble, yourself. It also gives you confidence, not to mention a lot more control, when dealing with your finances in future.

I graduated in 1990, with an arts degree, in the middle of the kind of recession which meant there weren't even jobs for engineers. I'd lived away from home for 3 years and had to move back in with my parents, which any of you who've done it will know is not easy - even if you get on with them well. After a year and a half living at home doing whatever work I could find I trained as a secretary. Even so, when I finally got a job and moved out I only had £20 a week to live on after rent, travel and bills (and that had to pay for food), which is how I ran up the second debt.

I remember the second time I got into debt I was very worried and eventually I just kind of stuck my head in the sand, ignored it, carried on spending and hoped it would go away. As I saw it by then, I'd left home, twice and it was time I stood on my own two feet. I failed and my parents had to bail me out again. It didn't happen a third time, mainly because I realised I had to rethink the way I lived but also because my boyfriend, who had been there himself took the time to sit down with me, work out ways I could manage my money so I didn't get into debt again, supported me and encouraged me throughout that time.

So... bearing that in mind... if I was the parents in this instance, I would try to find a middle ground - a way of educating her to look after her finances, or help her in kind, with time, encouragement etc rather than with my hard earned nest egg.

Because of my own shaky start, I can sympathise with the daughter because she may not necessarily be able to help her situation. Even after my overdraft was paid off, I was frequently in the red and often needed to supplement my earnings with an extra evening job a couple of nights a week.

The trick, for the parents, is to find ways to help which still allow the daughter to take responsibility for her situation and rectify it herself because when you do finally pay off the debt and get the finances under control, few things feel as good!

So here's my enormous 13 point plan of things the parents could do to help which don't involved directly giving the daughter money, and things the daughter can do which will help her to make more of and manage her own.

1. Sit her down and work out, together, how she can budget what she has to the best effect as well as a repayment schedule to pay off her debts. Encourage her to keep accounts so she is in control and knows what she is spending. Whatever the reason for them, she has to accept that her debts are her responsibility, not her parents', so it's very important she pays them off. She will feel a lot more in control of her life and well... better all round if she does, too (I did).

2. Maybe, if the time the daughter has available to earn is a problem, the parents could help by taking the kids after school, so if she's working part time she could go full time and earn more.

3. Could the parents pay for some of the children's expenses, clothes or even a family holiday or if the daughter sticks to her plan for two years maybe that's when they could pay off the remainder of the debt.

4. If they live nearby, maybe they could share meals together a couple of nights a week to save the daughter cooking or even show the daughter how to cook her own meals on a tighter budget. If the daughter is buying ready meals because she only has a little time to cook, maybe the Mum could help by cooking the evening meal for her daughter while she babysits the kids during the day/between school ending and the daughter's return from work.

It's amazing how well you can eat for very little cost if you are able to shop around or approach it laterally! I pretty much lived vegetarian when I was in London because I couldn't afford meat, so it was beans and pulses, baked potatoes, soups and bacon. Not ritzy fare but it was ok. I think a lot of people don't realise how cheaply you can eat if you think it through and plan your menus for the week through in advance. If you have a butcher nearby it's worth asking if they have any off cuts - or try the supermarket - I used to make Portuguese bean stew with off cuts of ham, chorizo and the like. Amazingly Waitrose is the one which bins off stuff incredibly cheap when it's approaching its sell by date. 500g of cheese for £1, that kind of thing. If the kids are taught to eat what the mother eats, it's also going to be cheaper. Turkey twizzlers are well expensive! ;-)

5. Cut up the daughter's credit card. If you only have a fixed amount a week to live on, a good way of ensuring you live within your means is getting out the total cash at the start of the week. Then, when it's gone, you know it's gone.

6. Did the daughter give up her education? Could she gain qualifications that would allow her to get a better level of pay? If so, maybe the parents could offer to pay her tuition fees - direct, to the college or university in case the daughter is tempted - or compelled - to spend them on other things.

7. The daughter has her own house, what about renting a room out to lodgers? I have a friend who slept on a futon in her lounge for six months. It wasn't much fun but it enabled her to get back on track and keep her house.

8. As someone else said... car boots. I've just scored a £150 push chair for £20, £100 travel cot for £10 (and a £24.99 new mattress) £200 worth of reusable nappies for £7 and numerous other bits and bobs for a pending little one for a fraction of the cost on Ebay or new. It's amazing how many fantastic toys and games you can get for kids, too - a lot of them surprisingly current eg, Dr Who, Bratz, Barbie, lego, Star Wars etc. So if the daughter uses car boots she can keep her costs low and often get nearly new bargains. If she keeps an eye on values then if she inadvertently end sup buying something worth a bit of money she can sell it on Ebay and help to supplement her finances that way. Kids love car boots, too, so it's a fun trip out.

9. Don't let her buy anything on HP. It costs more in the long run and it's another outgoing. Better to save up for it and buy it out right later - I did this with a car, it feels completely brilliant!

10. Set up a meeting between the daughter and her mortgage lender and go with her, if she needs support and encouragement, to negotiate rescheduling her payments to ensure she does not lose her house. Alternatively, depending on the size of the house, she may be able to downsize, paying off the debts with any equity she has built up in the property since she bought it.

11. If she's the kind of girl who is like that, teach her to be self sufficient. At the height of my debt ridden phase, I used to work nights in fairly dodgy parts of London, so for safety's sake, I needed a car. I saved a lot of money by choosing one which was reasonably reliable and easy to maintain and then doing all the small jobs, myself, as opposed to paying a garage.

12. If she smokes or drinks much, persuade her to cut down or give up and put the money she would be spending on those luxuries into a building society account. At the end of the year she should have a good nest egg saved which she can use to buy a treat for herself and the kids or to pay off another chunk of her debt.

13. Last but not least, she should join Freecycle. Etiquette demands you offer something before you start to take things but what may seem to be complete junk to you, sharp sand, old flower pots, a DVD remote control, can be exactly what someone else is looking for. It's also amazing what you can find, someone gave away a very nice Maclaren all terrain Buggy on the Birmingham one a couple of weeks ago.

Sweary

GrowMoney wrote: »

Her parents need to ask themselves if it is actually their daughters fault that she is in debt. I suspect as in most cases the fault is actually more with the parents although they do not realise it.

The daughter is a single mother with two children. This situation happens. She probably has very little chance of earning a high salary.

Her parents will be living in a house that their generation has enjoyed increasing in value many times. They have lived the last decade or so believing that they are well off and financially stable based on this over inflated price.

The daughter is also a home owner. However she is likely to have had to overstretch herself in order to even get onto the bottom rung of the property ladder. Her mortgage payments will take up the majority of her salary, leaving very little left and the inevitable build up of debts.

Really it is time that the older generation realised that the impossible situation their children find themselves in is largely their fault. That their perceived wealth based on their property price is false and that they need to be passing this capital onto their children now.

An inheritance when their daughter is in her 60's will be of little use to her. If they paid off £50,000 of her mortgage now it would be life changing for her.

If they care about their grandchildren they should help her by paying off some of her mortgage. They shouldn't watch their grandchildren grow up in poverty, whilst rattling around in a huge oversized, overpriced house and spanking vast quantities of money on various overpriced and unnecessary [insert your parents spending here]

GrowMoney

I hear what you're saying but this says more to me about your relationship with your own parents than the dilemma.

In this instance the metaphorical daughter has got into debt 3 times, so there's clearly a problem. The solution is to help her to sort out the problem, not to simply chuck money at the results until there's none left.

Personally, if my parents spend every last penny of my inheritance I don't care. Nobody owes me a living. I intend to make my own way, on my own terms just as I always have. What other people earn, whether they are my parents or friends, is theirs to do what they like with, not mine.

Once my debts were sorted, the only problem I have come up against trying to make my way financially is not old people daring to stay in their homes because they have been happy in them and they contain memories of good times.

Nope, it's people with more money than me who are prepared to stop at nothing, including paying a good 20% extra on top of the asking price, to get a house I can barely afford. That's not my parents' fault that's just a harsh reality of life.

The house we live in now, we bought from an elderly couple, the kind of people you appear to be rather anti. The reason we live here is not because we offered the highest price for the house but because they decided they liked us and wanted us to have it. They could see we were young and struggling and they wanted to help. Other buyers offered them way more than we could afford but they turned them down. We're not the only people this has happened to either, a couple of our friends have had similar experiences.

So, do you think you'll be doing something like that for my son when he's just married is looking for his first house and comes to look round yours?

Give the older generation a bit of slack they're not all like Old Man Steptoe.

NOBODY owes you a living but yourself, FACT. The only person who is going to make you a millionaire is you (and a lot of luck) - FACT - not me, the previous generation or your parents.

You've got better, more positive things to do with your time and energy than waste them on pointless jealousy and bitterness because some older people might have had better luck than you or an easier time financially (which I doubt, my father in-law had a day job and evening job and he fixed washing machines at the weekend, a lot of his friends with just the day job were jealous of his relative "wealth" they seemed blind to the fact he worked extremely hard for the things he had).

There will always be people richer than you - FACT. If John Paul Ghetty wanted to, he'd be able to find people with more money than him and get bitter about it. It is, I'm afraid, a simple fact of life. Get over it already.

Ok, imagine this. You work your !!!! off and you buy a house, you work weekends and evenings and finally after 20 years you have enough to retire. Then your kids come along and demand you sell the house which is, after all, your financial security and give them the proceeds. It may well be that you have very little financial income and that your assets are all tied up in the house but why should you pool them now? What if you live longer than you thought you would, or need to go into a home, what happens then if your assets are all used up?

C'mon, wouldn't you consider that a bit harsh? I know I'll disinherit the little bleeders if they do that to me, although if they get into trouble, I'm not saying I won't offer.

D'you see the difference though?

Cheers

Sweary.

Ebenezer_Screwj

Presumably this grown woman is in possession of all her faculties so the answer has to be no and welcome to the real world.

asr_2

At 34 years, you'd think that the daughter would have more disipline. If her parents have bailed her out twice already then they also have not helped. What example is she setting to her children to continuing spend more than she can afford.

I am not heartless, I have children myself and know that money doesn't last long, but there comes a point when you have to draw the line and make the best of what you have. She's crossed two lines how many more?

Why should her parents suffered a reduced income?

Should the parents bail her out again - I don't think so.

VickiB

The daughter needs financial help but bailing her out - again - will not provide that. The parents should not use their own money to help her in this situation. However, of course they will be concerned and what would help her is to provide the wisdom that comes from having been around the block a few times. This could be helping her to get all the assistance that is available to her whether monetary or getting advise to help her over this situation. Standing by her and supporting her is what she needs now. She's got the rest of her life to sort herself out but firstly she has to make a start, grow up and face responsibility.

noody123

Hi all,
I have already posted but felt i needed to add a bit.
A lot of people are recomending CAB unfortunatly they are not experts and from experience they gave the no hope response to financial problems and where not very good in my opinion i am not alone in this opinion. If you have debt problems the best people to speak to are the experts and the Consumer Credit Council is free!! they also know the inns and outs of all debt problems.
Some people are saying the parents taught them bad money managment. Rather than keep bailing them out surely the answer is to correct the problem by showing them how to manage and getting them help.
Also as a parent i do no work all hours to just throw it away on 1 child who can not manage money. If there is anything left when i die fine they can have it then. I will give them the best i can afford as they are growing up. the rest will be my support not my life.

Tiger_greeneyes

littleange_com wrote: »

Wow, I don't envy any of your kids if they need your help! :eek:

I would lend her the money interest free at least.

I think the point is that if she'd learned her lessons with money then she'd not be getting herself into these problems. If she'd learned about (and cared about) being in debt then she'd have learned her lesson long ago and wouldn't now be putting her kids at risk of losing their home.

Her parents have already helped her twice though, what happens in a few years when she's built up the debt again and her parents are skint because she's spent all their life savings?

You might think it's being kind to help her out time after time but when the parents bank balance is depleted then who's going to pay for her lifestyle then?

Would you seriously feel happy to give someone your cash card and tell them to help themselves to fund their lifestyle - because that's what it amounts to if the parents just roll over again.

Tiger_greeneyes

dillydilly wrote: »

this comment is so true. Two commonly heard comments make my blood boil:

"we've worked hard all our lives, now we're going to enjoy ourselves by spending the money in our house" - no, you've benefited from house prices rising well ahead of inflation for the past 10 years, you've probably already spent all the money you earned in your life. Meanwhile those below 20 will struggle to get on the housing ladder for the next 10 years

"inheritence tax is a crime, why do we have to pay tax twice ?" you don't, you'll be dead. Individuals pay tax, not families. Your 50+ yr old offspring will benefit from this unearned income, which will allow them to go out and buy their 4WD Range Rovers and holiday homes. Sadly again those currently below 20 will probably get to see little of it.

Are you serious? Is this materialistic attitude common of how people think these days? What happened to paying your own way instead of demanding it all be handed to you on a plate? Do you really think your parents should owe you a living?

When I left school in the 80's I earned £32 a week. I wasn't able to get on the property ladder until I was 26 (in 1993) but when I did, I did it all on my own. Never would I have begrudged my parents a penny of what they'd earned and neither would I have expected to sponge off them because they had more money than I did. Not that I could have done, my dad was severely disabled and couldn't work - we lived in a council bungalow - and I didn't have a mum from the age of 14.

What is it that makes some kids have the 'gimme everything you've got, you owe me because you've got more than me' attitude? "Spoiled brats" comes to mind...


This type of comment sadly reminds me of a thread a year or so ago - the original poster was miffed because her kids wouldn't be able to get on the property ladder unless their paternal grandparents left them all their money - instead of distributing it equally to all their descendants.

Marker_2

Tiger_greeneyes wrote: »

Are you serious? Is this materialistic attitude common of how people think these days? What happened to paying your own way instead of demanding it all be handed to you on a plate? Do you really think your parents should owe you a living?

Ummmm no, I pay my own way, but as well as working and having a decent living with my family now, I am also putting money aside so when my daughter comes of age, she wont have to struggle.

call me stupid but I thought thats what parents did, worked hard so their kids didnt have to struggle like they did