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?

Ok, I apologise. That’s one heck of a lot to unpack, and if what she says is accurate, she certainly will benefit from distance to her mother.

all you can do is see what happens next, what she does and how she keeps to the plan.

From my own experiences of MIL, it doesn’t seem to be. She’s very obsessed with keeping up appearances

I would definitely pay this off for her too OP.
My parents have helped me out a couple of times when I was earning very little in my early twenties. As soon as I was earning a proper wage I’ve never needed help again and I do not live a lavish lifestyle spending on whatever I fancy, I know how to budget etc, it hasn’t ruined me. It’s great to know they have my back and they care. And I could return the favour now if need be.

It can just be a one time thing. If she runs up debt again then that is her problem. You could say you want her to pay you back over a certain period interest free or something (my parents did this). If you don’t need the cash you can just put it by for her at a later date. Or not; whatever works in your situation.
I like helping my loved ones out however I can.

Tell her she has to see a counsellor and prove she’s gone to the appointments to get to the bottom of the issue & she can’t get more credit and every credit facility paid needs to be closed. In return you will be her safety net. Meaning you won’t pay the debts but you will be there to help her realistically manage them/chip in with a plan that is achievable. Tell her she has to first go though an assistance avenue/counselling & devise a plan.

@mummytoonetryingfortwo is someone speaking to mil? what is the result of that conversation?? does she understand the part she has played with your sil's deteriorating mental health????

I would help her, I know someone who sadly ended their life over debt when they were a student and it wasn't much money, really it was just the student felt it was.

DH has gone to get her stuff. At some point conversations will need to be had but I don’t think SIL or I are in a position to do so at the moment - I have my own health and mental health issues going on.

It sounds like you are doing exactly the right thing @mummytoonetryingfortwo - not paying off the debt completely but just giving her a bit of a helping hand is a decent compromise. Her credit rating (if not already trashed) will be protected, but she will still have the consequences of having to pay the debt.

It's also really good, and a sign of how much she respects you, that she's seen herself what a mess she has got into and asked for help while it is still a relatively low amount.

It could very easily have been hidden for years and built up into £000s more if she'd not opened up because of what your MIL was saying to her - she could have quite easily viewed you as 'little miss perfect' and distanced herself if she was being constantly held up as inferior!

Being in too much debt is one of the most insidious things for mental health - no matter what the cause and it is an issue which is quite close to my heart as the stress of debt contributed directly to the death of a relative who could so easily have been helped if only they'd opened up!

Good luck to her and I hope she manages to get herself sorted!

I'm glad things are out in the open and she has been able to confide in you and your husband.

I would stay emotionally she's going to be fragile for a while and will need to work on a self worth not dependant on her parents approval.

One word of caution about the internship and how is phrased. She's is a worthy individual now and always. She doesn't need the internship for self worth she needs to find that within. I am just wary about the emotional connection to her spending and the solution is "be more like your SIL/you". It's great you can help her and the connections will be valuable just tread carefully.

She's an addict. It's sad and she needs help - there are charities for this kind of spending, and GP referrals.

Please do not enable her by lending her more money to spend, spend, spend. Tough love is the only way. If you continue to lend it will only lead to huge resentment and she'll never get out of this mess.

Oh she doesn’t want to be like me, in here words I’m boring!😂 she’s definitely fragile but we’re going to spend a lot of time over the next few weeks building her back up. A lot of her university friends are living in London now, so I’m hoping being closer to them will help her!

@mummytoonetryingfortwo I would not pay the debt off for her (and certainly not without a written agreement she will pay you monthly). But do help her get straight and handle it herself (eg budget spreadsheet and so on, or live with you rent-free while paying off and you need to see evidence etc). However, she needs help to break the spending and bad money habits, or the cycle will continue. If you do go ahead, I do think you need to be open with your DH.

OP you sound very kind hearted and your SIL's family situation does indeed sound toxic.

However, please don't take away her agency. You have constructed an idealised future where everyone is happy and you solve all of her problems. Ask her what she thinks the solution is. She will come out of this a stronger and wiser person if she has lifted herself out of her problems.

Her siblings are successful but will have worked hard for that success. She needs to recognise that and not think that they owe her anything - other than empathy and (appropriate, boundaried) support.

Good suggestions from everyone re things like Step Change and GP/ADHD investigations.

I agree with @Bromptotoo , she needs to speak to one of these charities and get some advice. They can speak to her creditors and help her come up with a repayment plan. If she's embarrassed to tell her family, speaking to a neutral third party will be far easier.

Do NOT offer to just clear the debt for her, that won't solve the problem. Have her speak to one of these charities and formulate a plan. Once she has a plan in place, you could then help her out abit if you wish, but she needs to get a grip on her finances first.

I do sympathize as young adults are bombarded with credit card and loan offers the moment they turn 18. My DD (20) is constantly being offered them, and I can see how someone could get sucked in.

No, no, no, a million times no.

I used to run a financial program for low income people. Trust me, she will not stop. You will throw your hard-earned money down the drain and she will continue to spend, find more credit and have more debt in the blink of an eye.

You will be a lot more upset than she is now when your money is gone with nothing to show for it. And she will have learned NOTHING.

What she needs to do is suspend the master's program, sell everything she can and get a second job. And live frugally. Only when the debt is cleared is she free to return to education.

If she won't do that she is not worth helping. Mark my words, she will be this deep or deeper in debt in less than a year if you waste your money on paying off her loans.

Could you help her by researching a good therapist and offering to pay for that?

Apologies if this has already been suggested - I haven’t had time to read all the comments!

We are going to pay for therapy for her

She is absolutely worth helping. We have moved on from the original thought of her not wanting to get help. This stems from what amounts to abusive behaviour from her mother (in my eyes, at least!)

How long has she got on her masters? It is nearly the end of the academic year so not that much to do. Can she finish it while living with you? It would be much better to get that done and dusted now and then focus on the internship etc…

As someone with ADHD and hoarding issue and shopping addiction, I guarantee you that she will not stop buying without professional help.

If you clear her debts all you'll do is free up money for her to keep buying.

If you give her gift cards, she can sell them for cash for 70% of their value.

You need to let her family deal with this.

Of course she doesn't. What she wants is an immediate fix and an easy solution. But any help you give has to come with strict caveats otherwise in six months time she'll be back where she started and you'll be several grand out of pocket.

At the very least she needs to agree to have you as a joint name on her bank account that her wages get paid into, so you can see what she's spending. She won't like it AT ALL but it needs to be the basis on which you agree to help.

You sound like a good person OP, but I also agree with many of the PP’s on here that paying off the debts might not be the best solution. Have you given consideration to what might happen if she gets into debt again after you’ve paid off her debts, or that she doesn’t make the most of the opportuniTy you are going to give her? How would that make you and DH feel? That has the potential to destroy your relationship with SIL, as well as her relationship with other family members of it gets out. I know you said it’s your money you are spending and not joint money with your DH, but you giving his sis all that money does impact him and his relationship with SIL- if this all goes wrong I suspect he will be pretty mad at his sister for wasting your money.

Read the thread...

Glad you have found a way forward.

Just makes sure she speaks to her personal tutor or student support at uni before making decisions there.

It would be a shame not to get the masters. She might be able to complete part time. There are usually options so make sure she explores them fully.

Or she could apply for an extension if it's getting the work done in time that's the issue.

Please read my update, this has moved on a lot from how I first thought it was going