My sister in law is in severe financial trouble, how do I stop her spending?

[mummytoonetryingfortwo]

My sister in law has revealed to me last night that she’s in real difficulties and has asked me for help. She’s 23.

She works 25 hours a week for £12.60 an hour, so brings in £1,200 a month. She is studying for her masters, so cannot work more.

She has told me that she has nearly £5,000 in credit card debt, £1,500 in Klarna debt and, I believe, a personal loan around £7,500. She also has an interest free overdraft of £500.

She is spending the majority of her wages to pay off her debts, meaning she’s living in her overdraft. She just cannot stop herself spending. She’s almost addicted to it. She wants new things all the time, it spirals, and she gets into this mess. She’s now told me she’s felt suicidal over these debts.

I am able to clear these debts. I want to, but I want to do it on the condition that she breaks her spending habits and starts to get herself sorted. What can I do to help her on this path? What tactics can I use?

But did her brothers have lots of nice things when they were still studying? If so was that because they were given more money by their parents than she is or was it because they selectively bought fewer but nicer things.

It’s not clear to me from what you say if she is still living with her parents? If the relationship is not healthy and she is living with them then offering her some breathing space by living with you guys might be useful. Or does she live independently with a landlord and bills to pay. How were the masters and undergraduate degree funded.

I also think that you should not be giving her the money to pay off the debts. Really helpful would be to sit down with her and look at the StepChange, Christians against poverty websites to see what advice there is on how to approach debt repayment. Then look at the debt free wannabe forum on money saving expert they do a great statement of affairs which looks at income vs outgoings.

This would be a greater investment in her future happiness than a knee jerk paying off of her debts for now. It’s like that saying about give a man a fish and you feed him today, give a man a fishing rod and teach him to fish etc!

My best friend could have been your sister in law, and like you I could have helped my friend out by throwing money at her debt problem, but I didn't, I sat with her and helped her list all her debts (there is a useful template on the Martin Lewis website), I went with her to Citizen's Advice where she was able to create a payment plan. She stuck to it and whilst it took her 5 years she cleared it, and she has told me numerous times over the years, she was really grateful that I didn't clear her debts, that she did it herself, it was hard for her really hard but she learnt and she is now better with her money. I honestly think if I had of bailed her out our friendship would have suffered.

Her masters is funded by a student loan. Her parents paid a lot to her brothers, but from my understand it’s less to her because they don’t approve of her masters topic. She lives at home, but she is asked to pay £250 a month rent. That’s all she’s told me at the moment.

Don’t pay off her debt. Bailing her out and stopping her from having to take responsibility and experience consequences is not going to help her achieve long term change. Use your money instead to fund private therapy for her.

I paid off my son's debt with the intention he would pay me back in instalments and wouldn't have to pay the interest. He paid me roughly half back then stopped because guess what? He had got himself into debt again. Don't do it, she needs help but this won't work.

I am able to clear these debts. I want to, but I want to do it on the condition that she breaks her spending habits and starts to get herself sorted. What can I do to help her on this path? What tactics can I use?

I doubt you can stop her. She needs to stop herself. Therapy might help, but it's not a magic bullet. She will also have to do the work to develop some mental discipline, and find other ways to get that dopamine hit of spending.

If you clear her debts, you need to be really really clear with yourself that this money will be going down the drain basically, and that you can't control her spending.

There's a maxim in the group for family/partners etc of alcoholics, set up by Alcoholics Anonymous - they offer the advice that:

• You didn't cause your loved one's alcoholism [read addiction to spending]
• You can't control your loved one's alcoholism
• You can't cure your loved one's alcoholism

I think you need to think carefully about your own reactions if you clear your SiL's debt (is the the sister of your husband?) and she goes on to create more debt? Think through how you would feel about that. Because I'm afraid that is what is likely to happen.

Unless she gives up control of her finances to you, all that you’ll be doing is paying it off and then she’ll accrue some more.

Cutting up cards doesnt work anymore. You can just add them to your mobile in a click.
The card details are available in the app so you can keep using them.
The best way is to close all accounts, default on thrm all and accept you cant get any more credit for a few years, which is the aim anyway. At 23 she has a lot of time to build her credit back up, in three years she will be eligable for credit and in 5 years she will be free of all credit markers on her account completely.

I’ve been your SIL. I got into debt doing house renovations (and then once I’d spent x on a credit card on legitimate house purchases, what’s an extra few hundred on some clothes - it can easily become a slippery slope). I paid it off using a lump sum once I sold the house.

Now? Back in debt as paying off a lump sum didn’t make me work for it or change my attitude to spending. A family member actually offered as you’re doing to pay it off and I repay them but I’ve chosen to repay myself, got a new job paying more, selling old clothes on Vinted and actually working for it as it’s the only way I’ve found to change the mindset. It’s an incredibly kind offer but it won’t change the fundamental problem as she won’t have had to work to clear it herself and thus change her attitude to spending.

Only give her the money if you can afford to never see it again AND you won't resent her for re-entering the debt spiral without making any changes to her lifestyle or spending.

Hopefully the post-graduation education will lead to a better paid job eventually. In the meantime she needs to grow up and manage her own finances. You say she is living on her overdraft, but how is she then getting all this new stuff? Can she sell some of it?

If she's not ready to accept she needs help then you can't bail her out. It will just happen again and she will be right back here in a year.

Any help needs to be conditional on her accepting that she has a problem, and following any plans/ conditions you put in place about her getting the proper help she needs.

Throwing money at this won't fix it.

That sounds like a practical possible course of action.

You're very kind. But you’d need to be prepared for what would happen if the debts are cleared and then after a while build up again because she’s living beyond her means and thinks, maybe subconsciously, that you’re always going to be there to bail her out. You would have to make it absolutely clear right from the start that that won’t happen, and then stick to it, or you’re setting yourself up for a lifetime of in effect giving her money.

But I think it would be very wrong to do any of this without telling your DH, and could lead to serious marital problems if he finds out (as he probably would at some point). I know you say it’s your own money, but that’s not the point. She is his sister, not yours, and you would be spending money that would otherwise be available to spend/save for yourselves and your daughter (and any future children). If/when he found out I expect he would be furious, and perhaps infer a criticism of him for not doing it himself for his sister. I would.

This is one of the most obvious cases of saviour complex I've come across.

OP why did you bother to post if you have no interest in what people are saying?

OP you sound incredibly naive.
Don't pay her debts or move her into your house.

You cannot rescue another person from their own mistakes. You can't change her. You are not the hero in a Disney film

If you want to throw money at her, pay for her to get therapy so she can sort herself out

No matter how lovely she seems if you pay her debts, payment plan or not, then you will become the enemy. Likewise if she comes to live with you, will you expect her to babysit? Or sit there while you pay someone else. And 101 similar issues.

she won’t be in your life when she runs the debts up again, you’ll be a big part of the problem in her story.

Ok, I have read all your responses and I have changed my mind. Clear her debt, move her in with you. Release her from her vile parents.

But... She needs therapy and a budgeting plan or she will never grow up.

Don't let your parents in law treat your children like they treated their own.

Good luck to her and you. You sound lovely by the way and she is very fortunate to have you.

You really need to talk to your husband about this. Even if you think he won’t be kind or sympathetic to his sister, he needs to know that she is in trouble and is struggling. Please don’t keep this huge secret from him as it could damage your marriage.

Don’t pay off your SIL’s debts unless she is prepared to fix the underlying problem that has caused her addiction. I suggest that you go with her to a debt charity and offer to pay for some private therapy if you really want to help.

I find it helpful to think about maslow’s “hierarchy of needs”, and the support / interventions you offer have to be at the right level as to where she is in the hierarchy. Ie - no point aiming things at the top level, if she has unmet needs further down.

so in this case it’s very easy to fix the problem at the surface (just throw your money at it) but that doesn’t work on it’s own as the reason she got into this mess hasn’t been solved as it’s due to a need further down the hierarchy.

I’d possibly offer some / all of the cash on condition that she meets with a therapist first and works through some of this (you can fund that privately).

totally understand why you want to help. She’s lucky to have you.

I haven't read far enough to see if there were any replies to this.

If you move her in, her debt becomes associated with your address. When she defaults on repayments, that default is then associated with your address. It will impact on your own credit rating.

I think this is quite simple.

Q1. Do you want to help your SIL? If no, don't lend her the money. If yes, go to Q2.

Q2. Knowing everything you know about your SIL's specific circumstances, while also considering typical patterns of behaviour regarding overspending and debt, do you believe that freeing her from the burden of this debt will improve her emotional wellbeing in such a way that she will be able to break the cycle and change her behaviour going forward? If no, don't lend her the money - try to find a different way of helping her. If yes, go to Q3.

Q3. If it turns out you're wrong, and she simply repeats the pattern and builds up more debt, can you afford to lose the money and also manage the potential impact of this on your relationship with her? If no, don't lend her the money - try to find a different way of helping her. If yes, go to Q4.

Q4. Are you confident that lending her the money and potentially losing it all won't negatively impact you, your family, or other relationships? If no, don't lend her the money - try to find a different way of helping her. If yes - then lend her the money.

I am able to settle it and I think it would just ease so many of her problems

Since she's not prepared to help herself I'm not sure what problems you think this would be solving apart from short trem ones, and the idea of housing her with you in London of all places, where the opportunities to spend ££££ are greater than most, is just ridiculous

However it sounds as if you're determined to bail her out on some vague promise of her adjusting things at some indeterminate point in the future, so good luck with that ... just remember when it all goes wrong that this will have been your own choice

If she’s earning £1,200 per month and only paying £250 rent as she’s living at home, then she should have a sizeable amount of disposable income even with any commuting costs/ day to day costs. That suggests she must be spending a lot to have got into so much debt, which suggests her problem is severe and as everyone else has said, not something you can tackle yourself.

Also (and I mean this kindly), if you are only 27 yourself as one of your posts suggests, then you are quite young (certainly compared to my 40-something self!), and I suspect that many of the people replying are older and have more life experience than you, and that’s why we’re all saying that your SIL needs more help than you can provide.

No. My friends sister was bailed out, she spent again and lost her house eventually after someone had paid her arrears. You’ll never see that money again and she will carry on spending

I agree with this.

The grooming is a real stretch.

I think if her parents are real dicks (which honestly they sound like they will be... the shame will not help SIL) a halfway house vs demanding she "confess" to her family is she disclose to your dh and you guys help her deal with her personal matter herself.
You can still insist on her getting external support etc and you can have her close to you.

The moving in if you have the space does sound like a good idea based on the info you shared.

That said you do need to i
open your eyes a bit.

do not pay her debts off (i know first hand this DOES NOT WORK 😭) and dont be deluded about her not habing mich monef and the debt being somewhat unavoidable.

She IS pissing cash up the wall on plenty off non essentials with that elvel of debt at thet age as a single person. The £1.5k on clarna is going to be deliveroos, just eat amd crap from ASOS etc

You have an established career; you have one child already and you are expecting twins towards the end of the year; now you've added that you are going through an awful time mentally, yourself.

Are you really in a good enough place to be considering moving a relative into your home in order to help sort out her debt problems and her mental health problems while you are dealing with a twin pregnancy and mental health problems of your own?

Yes, she might be helpful to have around the place with a young child and two new babies to care for, but if her mental health does not improve or if the job you have in mind for her does not work out, or if she does not adhere to any debt plans you've helped put in place, you'll be looking after a seriously messed up adult plus three young children.