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?

Do you have a habit of trying to save people? It won’t work either way.

Was just thinking the same. Op is going to ‘lend’ niece the money, and then will be posting in a few months time, when niece has racked up more debt/gone on holiday/etc

That's what will happen if you do it without her addressing the issue.

This. Plus this......above anything else, this:

She needs to feel the pain of fixing this herself, to not repeat it.

If you bail her out, you have taught her she can't fix this herself.

If you help her speak to someone like stepchange, help her come up with a budget, then you have taught her she can get out of her own messes. And you have taught her the consequences of not living within her means.

I saw friends get bailed out time and again by family and never learn to take control of their finances.

https://www.stepchange.org

She is now an adult and needs to address her issues - you bailing her out will not give her any motivation to make the necessary changes.

As someone who is shit with money and whose mum bailed me out more than once. Please don’t do this, she will not learn to curb her spending and the kindest thing you can do in the long run is use a debt management agency so she can no longer get credit for some years.
I wish my mum had done this for me as I would have got my shit together much sooner than I did.

im an addictions therapist.

if you pay it. You’re not helping her, you’re psychologically clearing that mental space for her to do it again.

direct her to step change to get help to clear it. Refer her to NHS for free therapy

or she can go on get self help website for therapy resources to overcome addictions.

its like any addiction, if you don’t get to the root it will continue.
you can’t fix it for her, she has to

y

are you aware that you are projecting so much of your emotion into this? I understand you want to help but i seriously think that the best thing is to also seek some therapy as to why you have poor boundaries and are a rescuer.

Its not about the money you want to spare her judgement, pain, suffering and negative emotion - but avoiding these things is worse than dealing with them. You are over stepping to make yourself feel soothed.

You sound a lovely caring SIL.

There are lots of free debt advice services that she can turn to for help to get her debts and spending under control. Don’t use the college or banks services as their staff aren’t always the best trained.

I used to work in this field many years ago and in some cases, the debts grew completely out of control after well meaning parents paid off the earlier debts following sincere promises from their child to reform.

Your SIL has to acknowledge to herself that she has a problem BEFORE she can start trying to fix it. I’m assuming that she’s been paying the minimum each month to keep the creditors at bay but she’s still spending more money on stuff that she doesn’t really need. I’m sure she knows this deep down.

Is she enjoying her studies or is that another source of anxiety for her?

If you want to help, get her to gather up every bit of paperwork relating to her debts and to read through it and start organising it.

Get her to sort her stuff out into piles for selling. It won’t make much money but she needs to let go of it.

Make her face the reality of her situation but with a promise to go with her to see a specialist debt adviser (citizens advice/step change etc.)

It does sound as if your Sil is struggling with the comparison to her brother's and I feel for her.
BUT it's actually really unfair if you just solve it for her by paying off the debts, she needs ownership of the process and to be able to achieve this for herself.
There are steps that can be taken to do this and you can help her but she has to get there herself. So you can help her sell anything of any value that is unnecessary (even if it's for much less than she paid) and use that to pay off what she can.
Switch debt to the best low interest option, (again something that she is likely to need help finding).
Help her to draw up a budget that she can stick to.
Find the joy in being frugal. (For example it can be much more eco conscious to just buy less and be really mindful about any purchases you do make. A coffee from home in a reusable cup is better for the planet and your wallet than a takeaway in a disposable cup.
Replace the rush from buying something new with something free, exercise, music, reading (from the library)
Also, unlike many posters I don't see why you wouldn't have her come and live with you maybe for a year. (You could do what many parents seem to do which is charge (less than market rate) rent but put it in a savings account to be gifted back when they move out, some people tell the child this is happening, some don't.)

I'm really interested in this one because I was your SIL. I would have loved someone like you to step in and save me but honestly I don't think it would have helped. My compulsive spending didn't stop until I became medicated for my ADHD (as someone else suggested further upthread), and then it was like flicking a switch. From day one of the medication I have had no inappropriate compulsion to spend at all. The same medication also helped massively with all the (overwhelming) feelings of shame and guilt that came with the compulsive shopping (and other compulsive behaviours). None of us can diagnose ADHD or anything else for your SIL in this case but I do believe it's worth seeking medical help because it's not as simple as telling someone to get a bit of self control. This is happening for a reason.

On a practical level, even if you do pay off her debt (which would be an incredible level of kindness), you MUST ensure no further credit is available to her by working with debt management companies and attaching an order of no further credit to her credit reference file. All the kindness and possible medical issues in the world could quite probably be wasted without this. You definitely need to get to the bottom of what's causing it but that's not going to be a quick fix. Removing the possibility of further credit is the best insurance in this case to make sure your efforts are not all for nothing.

If you bail her out, she'll be back in the same position in a couple of months.

Help with food shopping or pay her electric bill if you must but you'll be setting her up for an even bigger failure by paying off her debts.

I would have absolutely no problem bailing her out, but I would want her to seek at least some professional help, counselling or therapy or whatever -

1. as a sign she is willing to put in the effort/work and not just seeing me as an easy way out

2. so she actually gets help from experts. You're minimising her addiction due to her family history but the family history only makes her addiction more deep rooted.

If she falls further into the mire after your bailout and feels unable to tell you that'd be disastrous. People do commit suicide etc over debt addiction you know. She needs consistent, psychologically informed and shame free support, which you as an amateur cannot give her. (You can still give her friendship and practical help but not to the full extent of properly qualified help)

I think people are reacting like that because £10k is a massive sum to a lot of people but equally it's not much to some people (it wouldn't be much to my mum for example). The sum aside, whether I was lending a mere £10 or £100k, I would still insist she seek formal help on principle for the above 2 reasons.

Maybe you could start her a payment plan… Only help her if she helps herself.
Credit must go, and show you that she is stopping her spending.
By any chance, is she bi-polar?
Over spending is a huge sign.

I do also kind of agree with this.

I didnt realise you are about to have 3 children?! You (according to a.post I saw on here) have twins en route and you are obsessing about bailing her out...

Its kinda crazy....

Presumably with all this spending she has got a load of stuff she can sell? I'd want to see this happening before giving her any money myself.

It really does sound like they relationship with her parents is not that healthy. However £250 a month is way below market rate for student accomodation at least in the cities I am familiar with.
Perhaos ask for the same £250 a month if she movesin to yours and keep it set aside for her. But still do not directly pay her debts rather offer the assistance with working out a plan.
If she did move into yours and it had a negative effect on your mental health or your relationship then what would be plan B? I suspect her parents may not want her to move back home or may be even more unpleasant/controlling if she did.
I really think that she needs to talk to your husband as well the brothers may be totally oblivious to the difference in ways that she has been treated/financially supported by the parents.

There are ones that are for a couple of years, but she probably isn't eligible for one if she only makes minimum payments. After you finish the deal on one you can then take another one out. But only if you have good credit.

I would not be giving her any money at all. However, if you felt inclined to match loan you could say "when you have saved £500 and not run up any more credit card debt in the time it's taken you - come to me and I will LEND you £500 and then we will do the same but you must pay off my first £500 before I lend you any more and you MUST go to one of the debt charities".

Don't lend her anything approaching her total owed and don't have her to live with you (she could use your name to run up debt, for a start, if at the same address). If you are lending her anything and she says she's not run any more debt up, sit with her while she logs into a credit check app so you can see if she owes more than she's saying.

If she's about to finish her Masters she won't save anything by not finishing this year, if it's full time - she will only have about 3 months left at this point.

There's also the point that the claims of the family being "nasty and judgemental" might have more credibility if she was prepared to approach the type of help/advice agencies who won't be

But she doesn't want to do that, so I'm left wondering if it's just a case of blaming others for what she'd rather not hear

she lives at home and pays only 250/mth ( rent) the issue is not her debt the issue is clearly her spending habits ..
paying off her debt may look like it’s helping her but it won’t be, she’s going to just become an adult who hasn’t learnt how to budget or control what they buy. The scale of the problem is currently small but could easily spiral if she doesn’t learn this soon

I'm not British so probably explains the cultural difference but how silly to call OP names because she's trying to help sort out a down and out younger family member. It truly explains why your country has so many mental health problems like anxiety, depression and isolation tbh.

I would do it a bit differently, perhaps no secrecy for one (or at least agreeing to fess up at a set date in future) as it's a bad idea for many reasons, and proper structured help/counselling definitely must be sought. I know you have to set boundaries around addicts, but it remains to be seen how hopeless the sister is atm. I'd rather not leave her to drown and die anyway.

Simply offering to help at first is human instinct towards a younger loved one/family member. Calling her a "rescuer", "saviour mentality", "poor boundaries" etc tells me you guys are the ones projecting wildly 😅

I also think another factor is people on here may not realise how much some others have. For many I know who have deep pockets and are well connected, this would be the least they could do, same way lending someone a fiver would be nothing to most people.

It sounds like you are q vulnerable mentally yourself OP and she has played on this. Proceed with caution.

Don't bail her out. You will only be enabling her to carry on regardless. She needs to come clean to her family, cut up the cards and work on a repayment plan.

Paying it off for her won’t do anything other than enabling her to continue. If she’s still spending while owing this money, that won’t change.