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  • FIRST POST
    • Mumtomany
    • By Mumtomany 6th Aug 18, 7:04 PM
    • 10Posts
    • 8Thanks
    Mumtomany
    Best way to help when child is in financial crisis
    • #1
    • 6th Aug 18, 7:04 PM
    Best way to help when child is in financial crisis 6th Aug 18 at 7:04 PM
    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
Page 1
    • agrinnall
    • By agrinnall 6th Aug 18, 8:21 PM
    • 21,687 Posts
    • 17,553 Thanks
    agrinnall
    • #2
    • 6th Aug 18, 8:21 PM
    • #2
    • 6th Aug 18, 8:21 PM
    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
    • By silvercar 6th Aug 18, 10:42 PM
    • 38,270 Posts
    • 160,897 Thanks
    silvercar
    • #3
    • 6th Aug 18, 10:42 PM
    • #3
    • 6th Aug 18, 10:42 PM
    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
    • By Mumtomany 7th Aug 18, 7:49 AM
    • 10 Posts
    • 8 Thanks
    Mumtomany
    • #4
    • 7th Aug 18, 7:49 AM
    • #4
    • 7th Aug 18, 7:49 AM
    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
    • By Spendless 7th Aug 18, 8:47 AM
    • 20,473 Posts
    • 34,119 Thanks
    Spendless
    • #5
    • 7th Aug 18, 8:47 AM
    • #5
    • 7th Aug 18, 8:47 AM
    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
    • By agrinnall 7th Aug 18, 9:11 AM
    • 21,687 Posts
    • 17,553 Thanks
    agrinnall
    • #6
    • 7th Aug 18, 9:11 AM
    • #6
    • 7th Aug 18, 9:11 AM
    Maybe I've misunderstood what you're asking but if not surely it's a simple maths equation to show her?
    Originally posted by Spendless

    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
    • By Spendless 7th Aug 18, 10:33 AM
    • 20,473 Posts
    • 34,119 Thanks
    Spendless
    • #7
    • 7th Aug 18, 10:33 AM
    • #7
    • 7th Aug 18, 10:33 AM
    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
    Originally posted by 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.
    Originally posted by agrinnall
    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
    • By Mumtomany 9th Aug 18, 12:28 PM
    • 10 Posts
    • 8 Thanks
    Mumtomany
    • #8
    • 9th Aug 18, 12:28 PM
    • #8
    • 9th Aug 18, 12:28 PM
    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
    • By Mumtomany 9th Aug 18, 12:30 PM
    • 10 Posts
    • 8 Thanks
    Mumtomany
    • #9
    • 9th Aug 18, 12:30 PM
    • #9
    • 9th Aug 18, 12:30 PM
    “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
    • By silvercar 9th Aug 18, 10:20 PM
    • 38,270 Posts
    • 160,897 Thanks
    silvercar
    “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
    Originally posted by Mumtomany
    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
    • By PasturesNew 9th Aug 18, 10:27 PM
    • 65,218 Posts
    • 382,734 Thanks
    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....
    • meer53
    • By meer53 12th Aug 18, 1:10 PM
    • 9,330 Posts
    • 13,615 Thanks
    meer53
    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
    Originally posted by Mumtomany
    It's your income as declared to HMRC that SLC take into account for Student Loan calculations, not whats in your bank account ? SLC don't ask for bank statements so i can't see what the issue is ?
    • Savvy_Sue
    • By Savvy_Sue 12th Aug 18, 6:57 PM
    • 39,248 Posts
    • 36,203 Thanks
    Savvy_Sue
    It's your income as declared to HMRC that SLC take into account for Student Loan calculations, not whats in your bank account ? SLC don't ask for bank statements so i can't see what the issue is ?
    Originally posted by meer53
    This. Unless you're claiming means-tested benefits, where they MAY ask to see bank statements, you are overthinking this.

    However, couple of other thoughts:
    • Student loans may make 3 payments each year, but is the 3rd payment meant to last through the summer vacation? If not, you need to spread the monthly payments less equally and encourage her to work more hours over the summer
    • She's an adult. There are 101 ways in which she can circumvent this or any other arrangement.
    • If she does it again, you just don't bail her out. You say you won't be able to do so: you don't have to do it this time. You can help her work through it, you don't have to take over in the way you're suggesting - and I'd argue that it's not necessarily the best way to go.
    Still knitting!
    Completed: 1 adult cardigan, 3 baby jumpers, 3 shawls, 1 sweat band, 3 pairs baby bootees,
    1 Wise Man Knitivity figure + 1 sheep, 2 pairs socks, 2 hats, 2 balaclavas for seamen, 1 balaclava for myself, multiple poppies, 3 peony flowers, 4 butterflies ...
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