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?

She my well just latch onto that as an excuse and carry on her spending as it now is a "symptom that can't be helped".

It is up to her to get a proper diagnosis, ergo put in some effort, not up to you to suggest it.

That is something to discuss with my husband, but in my view as long as she is respectful I wouldn’t mind. Obviously the long term view would be to her clearing her debts off, sorting her mental health and then starting to pay us rent before she moves out.

Did your in-laws go mad at your DH too or was the pregnancy all your fault? It certainly wasn't their place to go mad at you. They do sound dreadful.

She has problems with limits and boundaries. (I speak as someone with lived experience :-) )

She needs someone to show her, to live out for her, the fact that actually she can manage her spending and she can manage the frustrations of going without - that these are ordinary feelings and they are not insurmountable, they are in fact manageable. Its not pleasant to stick to a budget and not have what you want, but that discomfort and frustration can be borne and is an ordinary part of life. You can't always get what you want and sometimes you have to go without.

If you give her the money you risk sending the message that her discomfort is so bad you will do anything to relieve it. Rather than the message that some economising, some plan to pay the debts, is actually possible for her to achieve and that the difficult feelings that go with that are actually bearable.

If you can bear her discomfort without having to rush in and rescue her from self harm, that will give her a feeling she might be able to bear it too.

If you sweep in she will feel that the ordinary pain of going without/sorting out your own mess, is too much for anyone to bear.

She may well, deep down find it more containing and more reassuring for you to set a limit and say you will not bail her out, than if you were to sweep in a pay her debts.

I would offer to support her to find advice and make arrangements with Stepchange etc and see what they suggest in the first instance.

Ok this does sound toxic. But she will still struggle with the fresh start you plan on giving her if she doesn’t get help for the addictive/reactive side of her response to her critical parents.

But how does this work in practice? How does she afford to move to London? How does she achieve independence? Her finances and work situation only become a bit better after the debts are settled. She can’t afford to live in London unless she is coming as your au pair.

Is that what you are envisioning? Because whatever you do you must inform your dh.

You can’t cure this without letting your DH know because this “plan” involves all of you as a kind of surrogate family for her. You and DH as the “good” parents and your child as a pill to help her stay sober and happy and not needing to self soothe with purchases.

Your SIL has a common problem in a toxic family. She needs therapy And support to learn healthier coping skills. This all has to be out in the open because secrecy fosters shame and shame leads to the addiction spiral.

They’re not the nicest of people. He caught some flack - but the expectation was very clearly that he wouldn’t be giving up his job. I went to work in the evenings when she was 6 months old to help get things back on track, he had a good wage but I needed to build up my career. It worked out for us at the end though

@mummytoonetryingfortwo please don't suggest ADHD unless she has been to see someone and has a diagnosis. You said you felt heartsore for her or something along those lines, which suggests to me you are feeling very emotional about your SILs situation. We don't always make the best decisions when we are very emotional about things. Take a step back and very importantly talk about all of this with your husband first. You are about to become a family of 4 by the sounds of things and you owe everything to your own nuclear family first.

I don’t think moving somebody with a spending problem to one of the most expensive cities in the world, to live with two highly-paid magic circle lawyers, is going to help her manage her budget!

She will likely up her spending to match your lifestyle, or you will end up financially supporting her, which might be fine for a year but probably not something your DH intends you to do for the next decade.

You are already going to be paying for her housing and bills, and likely her food and entertainment (if you go out for coffee or to the cinema are you going to make her pay, when you earn so much more than her? Nope). Her whole full-time salary will be freed up to fritter on clothes and socialising.

This has disaster written all over it. It then “won’t be fair” when you eventually want her to move out because she won’t be able to live on her salary without you paying for everything.

There’s a job waiting for her at my company, if she wants it. If not I have a lot of connections. It’s giving her a leg up, sure, but anyone would do it for their family

How long do you think it would take for her to earn enough to pay off her debt and then be able to afford a deposit and rent in London?

You are very kind but I think at this point paying it all off potentially does more harm than good and risks your relationship.

If she feels bad now, imagine how much worse it will be if she takes your money and runs up debt again.

Help her with guidance and support and perhaps if there's crippling interest on one of the smaller ones, offer her a loan to avoid the interest (but do so in the knowledge you may never see the money).

She needs to go on money saving expert. And she needs to sit down and look at what needs paying first, which has the highest interest etc. look up the snowball method.

Provide her with reassurance that it's not insurmountable and help her find a way forward.

But she has to get her spending under control or it will all unravel again. For that she probably needs professional help.

I am heartbroken for her. I’ve been going through an awful time mentally myself, and then her struggles on top have just ruined me. I just want to help her, in any way possible.

Having been there please don’t bail her out she will not stop! Ex partner of ex gambler. It’s the same thing she addicted to thrill of something new and you clearing her debt does not help (even though it seems like it)

I haven't read the full thread, sorry, but I have read your updates.

I just wanted to flag the very real risk that when she keeps spending money - because it is hard, hard, HARD to break spending habits - it's hard to see how that wouldn't affect your relationship with her.

She's used to buying nice things, nice things she can't afford. It's almost like a psychological crutch.

I suspect it will be very hard for her to break that cycle. If she earns more, she will likely spend more. Imagine how you feel if she moves in with you, and you see her come in with lots of shopping bags. Getting Deliveroo all the time, Using Ubers instead of public transport. While you've just spent your hard-earned getting her out of debt. And likely, in the back of her mind, the idea that she can come to you if she ends up in debt.

It's clear that you love her and your relationship is one of the most important ones that she has. To save that relationship, I would help to some extent but let her feel most of the consequences of her actions.

Love her without shelling out large sums, love her without solving her problems for her.

They will try to help. They don’t want her to end up committing suicide due to the stress of the debt. When they set up a payment plan they will look at her income and all her expenses (including other debts) to make sure she can actually afford the payments. Then once she’s earning more she’ll be able to pay more.
For the credit file, she needs to contact all of the credit reporting agencies and ask them to add a notice to her credit file. I would recommend signing up for a free trial of CheckMyFile (they usually do a month free), and they will be able to arrange this for you so you don’t need to contact each CRA individually. They’ll also be able to help with the wording of the notice, and talk through the pros and cons of it.

Help her by giving her the tools needed to get out of the hole she has created. So much good advice on here.

My mum and sister are like your SiL and have always been bailed out and never seen the damage they have caused by profligate spending. She is young enough to learn, and old enough to take responsibility.

You really need to be more sensible about this OP. You cannot play fairy godmother here.
Shes a young girl with substantial debt saying she’s suicidal. Do you not see what a mental health red flag that is! She might actually have bipolar or ADHD or something very serious underlying here.
Say you pay off her debt this time, she moved in and everything is great for a bit and she still refuses all MH support. Then a few months down the line it all happens again. Or perhaps this time she just does just kill herself as actually the spending is a self soothing mechanism and eventually even that doesn’t work.
How will you live with yourself OP? And what will you say to the wider family when they found out you hid all this and are now planning a funeral for a young girl who clearly has MH issues…

She feels like a failure anyway

Which is probably why she spending like it's going out of fashion - it's something she can do well. Question is what's caused her to feel this way?

I think I just see a lot of my younger self in her. The absolute crushing pressure of expectations from her parents. For me, it was the expectation that myself and my daughter wouldn’t derail my husband’s career. For her, it’s that she will get a well paid job in the city. I just want to get her out of that situation and get her safe.

Of course she shouldn’t give up her masters! She needs to get out from under her parents’ control and become more independent.

I. cannot sufficiently stress enough OP the advice of earlier posters, get her over to MSE and the Debt Free Wannabee thread. There are so many experts there who have seen it all before and they will help her. They give their help freely, because they know the difference it makes to people's lives. You, frankly my dear mean very well but you haven't a clue, and even risk making the situation worse. I know that's not what you want to do, but she requires expert help so that this behaviour stops once and for all. Otherwise it will be a millstone round her neck for the rest of her life.

As well as getting her expert help, I believe it will also massively help with her MH once she is receiving real help and guidance, and knows that she is not alone. I remember Martin Lewis saying that, once people in financial trouble receive help and know there is a plan to get them out of their desperate situation, they often say they have had a good night's sleep for the first time in years. That will help her massively, as will following and supporting others on the same journey as her and their success stories.

Sit down with her and help her to post on there, setting out her situation. They will ask her to set out her income and outgoings - they have a format she can use which helps to make it easy.

Your support, and knowing she can talk to you, will be massively helpful to her in sorting this out. Bless you for wanting to help her. 💕

If you are struggling mentally too and expecting twins, then I think you are massively overstretching yourself here. Please step back, read the thread again. Look at all the tips that have been given for debt consolidation. Go and look at MoneySavingExpert for tips there. Talk to your husband. Once you have given yourself some time to process all of it and have had a decent conversation with your husband - then maybe think how best you want to move forwards.

And you are pregnant with twins?

And you are planning to bail her out behind your husband’s back?

And move SIL into your household for free?

Don't you think you had better focus on dealing with your own mental health, given that you cannot cope and feel ‘ruined’…….. whatever that means?

I think working on a budget with her, looking at her expenses then seeing what's left for debt, then offering to match her payments might work. Even if it's 3-1.

She needs to see the debt as her responsibility and not suddenly have lots of spare cash to buy more things with.

You should go on money saving website and looks at debt snowballing, or try and get her to go to step change etc.

How long til she's finished her master's?

I’m just so sad for her. I remember the shame and sadness her parents caused me to feel when I got pregnant. I can just imagine their reactions to this and I know exactly why she doesn’t want to tell them, or anyone. I will speak to her about discussing this with my husband, so he can be another support for her.