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?

That would be the worst thing you could do for her. What you would be teaching her is that her debt is someone else's problem, and the grownups will solve it without her having to bother her pretty little head.

If you pay off her debts before she gets proper financial advice, deals with her addiction, and recognises that she is going to have to completely overhaul her way of thinking about money and purchasing, you might as well burn £10,000 in the fireplace. She will just go off and spend even more and be in an even worse position in a year or two.

Her suicidal ideation is not your problem to fix.

She feels desperate and ashamed because she doesn’t see a way out. With debt counselling, she will find a way out AND she will have managed it herself which will do far more for her self esteem than you fixing everything.

Help her to contact StepChange and her GP. You will not help her change her pattern of behaviour by bailing her out. My parents have done this for years with my brother and he just starts spending again and builds up the debts again then comes back crying and they bail him out again. Don't enable her to become a non-functioning adult, she is only young and has a chance to learn a better way than this.

https://www.stepchange.org/

Yes, she has begged me not to tell him and I won’t betray her trust - she has complex relationships with them both.

She likely will. You probably can’t help her at the moment because she sounds like she isn’t really accepting that this is her responsibility to sort.

If you pay her off at this stage - when she if refusing help for the underlying issues - you are enabling her.

If you want to help I would take over paying off particular bills so she then has the responsibility to sort out the debt herself BUT realise that she will likely just spend the money she should be putting into repayments into buying more stuff.

I tried to help out a friend - he just spent it. I now make sure he has a roof over his head and food (he lives with us) but do not get involved at all in any other way. He has started to sort it, but that is in part because he has started to act responsibly in other areas of his life as well. You can help people once they take responsibility for their issues but not before. Before then you just enable them and they end up in a worse hole.

If you're thinking about bailing her out to the tune of multiple thousands, and not telling your husband, I think you're risking very hot water for your own marraige

Why is it up to you to bail her out?

Go ahead and do it, but only if you’re prepared to not see the money ever again.

What’s to stop her racking up the same debt again after you’ve cleared her debts?

Avoid giving her money. It will be a waste and won't change her habits. Help her with debt advice by all means though. The debt relief order a PP mentioned is a great idea.

Don't bail her out. She will do it again if the underlying causes aren't fixed. Instead I'd get her on a debt management plan. They'll take what she can afford to put it towards the debts as well as freezing the interest and she won't be able to get more credit.

It's a very tough cycle to fix, my friend got into trouble with credit cards etc, paid it all off on a debt management plan then got more credit as soon as she could. So I wouldn't throw your money into the pot just yet, instead you could just support her, maybe take her on holiday once she has done 6 months or a year on the debt management plan etc.

It won’t - we both have very well paid jobs, good investments etc. we have joint accounts for all household spending and saving, and then our own money. I would never dream of using his money to do this - this would be my own money that I have worked for. I wouldn’t leave my own family short.

She can go to the university, suspend her masters and get a full time job. That will give her an extra £1000 ish and this time next year she can rejoin her studies and continue with her life.

All you can do is help her by working out payment plans etc.

offer to sit with her and look at incoming and essential outgoings etc

Do not wipe her debt - she won't learn from it.

Look at it differently - if she'd broken her legs, you wouldn't be expected to x-ray her leg, and put a cast on, administer painkillers, do her rehab you'd just support her by holding that door open for her, not taking her on a 20 mile hike etc

so SUPPORT her by offering advice / sitting down with her and working out what is essential, sign posting her to MH services.

You can lead ahorse to water and all that.

But she's getting you to collude in this narrative of shame and secrecy and it won't help unlike confronting that narrative and freeing herself from it, even realising that she's stronger for not living in this cycle of fear. I can tell you're not really hearing the very clear advice that everyone is giving because you're already in that narrative and drawn to the 'easy answer' of giving her the money. And saying you 'don't know how to help' with her actual problem even though people have said how on here, but of course she doesn't want that kind of help, she wants more money. The PP who said it's like buying an alcoholic a drink couldn't be more right. But people with addictions can be incredibly persuasive and say/believe what they need to in order to get what their addiction wants.

I feel this would be a way out but I worry her parents would judge her for it. They’re very academically oriented and value that, and her older brothers are successful so I fear that they would look down on her for it.

One of my ideas was to have her come and work at my company and have her live with us - get her out of the home, into a new environment and almost a fresh start for her.

Its lovely that you want to help but believe me I know from personal experience she will do it again
She will say she won't and probably mean it but she won't stop until she has to and the longer you enable it the longer that will go on

She doesn't want to seek professional advice, so stepping back, what are the chances that you'll clear her debt and she won't get herself back in a hole? Of course she would rather you write a cheque and make it all go away. Sorting it out for herself is much more work.

I would provide support to help her, but she needs to work through this herself and learn the lesson, or she'll be back at square one, and your relationship will be screwed. You won't be helping if you clear this debt, your intentions are good, but inadvertantly you'll make it worse in the long run.

just tell your husband.

it's not a "betrayal of trust", although I'm sure she'd spin it that way.

She's seen you as a soft touch and just wants your money.

That's very nice but in this instance it just makes you another bank, and one with much nicer terms than Klarna. Make a donation to Stepchange if you've got all this spare money and want to help people in debt, but giving a chunk to SIL won't be helping her. Without the proper help that solves the root cause and manages the debt, she can't stop spending for herself let alone for you.

Please don’t waste valuable GP appointments on a 23yr old female who wants wants wants. She needs to realise that everything has to be paid for. If she wants wants wants she’s got to work work work! She needs to work more hours…with working more & studying less maybe she won’t have enough time to spend spend spend.
PLEASE DO NOT PAY OFF HER DEBTS YOURSELF…..THIS IS NO HELPING!

If you hide this from the family, how do you know that you aren’t one in a long line of family members she has sworn to secrecy? Could other people have already bailed her out and this is just the current amount of her debt?

As others have said OP, you won't be helping her, you'll be enabling her. The best thing is for her to contact one of the charities mentioned above who will contact the places she owes money to. They may be able to suspend interest and organise smaller, affordable repayments. If you just pay the debts off she won't learn to manage her finances, and will just rack up more debts, putting her in a worse position than she is now. You'll also likely never see your money again.

I know you want to help, but help in a practical, sensible, sustainable way

Of course she will end up in the same situation if you pay her debts off. She needs to get full time work and get the debt paid off. I know you said she’s studying but that will have to take a back seat. You can’t fix her.

If you pay the debt it won’t help her

IF she'd come to you and said "I'm in trouble, I've done X, Y Z to help clear debt, I'm stopping the spending, I've gone to Drs and sought help there... but the amount I owe is HUGE and I'm feeling scared blah blah blah"

that's different imo - i'd perhaps offer to pay of SOME of the debt.

but you can't give conditions. like you're proposing - because she has no incentive - and she will hide other debt from you and come a year later going ""boo hooo, i spent another £5000"

DO NOT PAY OFF HER DEBT!!!! Be there for her if you want to as a mentor while she sorts this out, but do not take on her debt or pay it off yourself. If you do that, what has she learnt? She has learnt that if she tells you a sob story, you will take on her financial burdens.

She is a fully grown adult who has spent money she doesn't have and she needs to take responsibility for sorting it out. She can cut up her credit card, move the balance to a zero interest card and slowly start paying it off. That is what people do when they rack up debts. You can help her with those arrangements if you want. She can also work out a very strict budget for herself, starting selling clothes she doesn't wear on vinted or ebay and so on - again you can help her with the budgeting, if you want to.

She must do this herself and she should also work out if she needs counselling or proper help for her money management issues.

You can also say that this is way too heavy a burden for you to carry alone and you want to tell your husband, who you are currently concealing the truth from. Whilst you are not telling lies you are omitting to share stuff with your own husband, which is also something to consider. Where do your loyalties lie here?