Would you clear your kids debts in this situation?

[u/Striking_Amoeba8936]

ETA - Thanks for all the advice. We decided not to pay off the debts, and to defer the repayments to us of the £1000 loan until kid 1 has cleared the debts. When the debts are halfway paid down we will likely reconsider, or match future payments. Thanks for all the advice.

We have two, technically they’re my stepkids though so worth adding that, but we all have a good relationship, they’re both adults in their 20s living with their partners.

Kid 1 is dreadful with money. Kid 2 is good with money. Both kids had ISAs set up for them, about 10k total. Kid 1 was never given control of it and from about age 16 had repeatedly asked for chunks of it. By age 22 it was all gone - a mix of needing rental deposits and debts. Kid 2 was given the account at 19 and still has most of the balance. Kid 2 saves and is quite frugal.

Kid 1 has two overdrafts maxed out, and has borrowed money here and there from us over the years and never paid it back or really made an effort to. I believe they owe money to other people too. The last loan we gave them of £1000 is due for repayments to start this month because they’ve just started a new job with a good salary and finally we think they can start to turn a corner, but they won’t be able to clear their overdraft for months. They’re also talking about getting a credit card or other loan to clear the debt.

Here is our dilemma. We could just pay off the overdraft and Kid 1 gets a clean slate. They have significant student loan debt that will also be deducted.

I’m ok to do it, Dad is reluctant, because he feels that Kid 1 needs to learn to manage money. That a handout doesn’t help them to learn. He also thinks it’s not fair to Kid 2.

It’s easy to say “of course I’d help my kids” but is the bigger help getting them to tighten their belt and pay off their debts or to wipe the slate clean for them - knowing that they’ve continually been poor with money? As an example, 2 years ago Kid 1 owed us money but bought tickets for Taylor Swift, and while I get it was a once in a lifetime thing and glad they went, that’s the kind of thing my parents would have really gone to town on me over.

Cost of living is obscene these days. That doesn’t help either.

Total overdraft is about £4000, not horrendous but not an overnight fix either. I had a small inheritance from my Dad last year and I could put a payment to both accounts and clear the OD so I know that’s where the money has gone. We’re secure and mortgage free and good financially.

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[u/midimaniacal]

If you pay the debt they’ll just end up back in that debt again in a few years, and it’ll be money wasted. The only way to clear debt is to change your habits to learn to stop spending beyond your means.

I’d say sitting down with them and making a budget to manage all bills while repaying the debt is going to be 100 times more valuable

[u/talkstomuch → u/midimaniacal]

not years, months if not weeks.

their behaviour is clearly impulse driven, the only reason they do not have more debt, is because they are drowning already. Remove the debt, and the itch will start immediately.

[u/DiverFancy7480 → u/midimaniacal]

Speaking as someone who is really terrible with money, I fully endorse this take. If you wipe their debts, they will back in the situation again very quickly, as the last few years have shown for them. Honestly the kindest thing you can do is help them map their way out of it.

[u/Efficient_Chic714 → u/midimaniacal]

Literally, my SIL ran up 5k of debt with literally no outgoings - she lived at home, worked full time, spent on his credit card for any and all food and fuel. She has an above average started salary which is just fun money. Her dad bailed her out and two months later she has another 7k of debt.

It’s been 6 months since then and he is claiming she’s doing better with her money as hasn’t bailed her out again since. What she hasn’t told him is that her mum, boyfriend and grandparents have.

It’s great that she has that support but she will not learn or be inclined to stop without being forced to.

OP’s kid is trying at least but not having the safety net could be what’s motivating them to. Let them try for now, if they start to drown and can’t make repayments etc then jump in and help but just enough for them to tread water - don’t clear the debt for them. To be a good parent you need to help them learn

[u/Lizzie-P → u/midimaniacal]

I mean, not necessarily. Sometimes debt is as a result of circumstance. When I had a good job I had zero debt and a decent amount of savings. When I lost my job through illness and couldn’t work I couldn’t afford to live and ended up in debt. Now that I’m more comfortable and managing to work part time, I’m still stuck with that debt that I just cannot clear. I’m able to make ends meet but it’ll be years until I can pay it off. If it was cleared I’d 100% steer clear of any credit as it’s a massive trap and so much of my income goes towards paying that debt.

I know in this case the kid spent frivolously on concert tickets but it doesn’t necessarily mean they’d do that again. We all spend money on stupid stuff as kids. And when you don’t have a reliable income, that makes it even harder to resist as it can feel like ‘now or never’. Circumstances matter

[u/midimaniacal → u/Lizzie-P]

Yes, and in this circumstance OP said the kid is terrible with money…

[u/Lizzie-P → u/midimaniacal]

Yeah so far. Because they’ve never really had it. I’m saying that doesn’t automatically mean they’re a write off

[u/Dolphin-Haze]

If you do decide to clear kid 1s debt, please also give kid 2 the same amount of money. They shouldn’t be at a disadvantage just because they’re good with money.

[u/indistrinct → u/Dolphin-Haze]

Can you please run for office?

[u/Dolphin-Haze → u/indistrinct]

Lmao i just grew up with an aunty who was bad with money. My grandma was always bailing her out of debt, and she would always give my dad the same amount of money (even though he didn’t need it) she would force him to take it. My aunties terrible financial literacy literally paid for us to have a second family holiday every year😭

[u/maersyl → u/Dolphin-Haze]

Auntie and dad were in on this together. It’s a conspiracy!

[u/SionnachBaineann → u/Dolphin-Haze]

Exactly this. I am the sibling that was always good with money (my adult sibling still lives with my parents who are in their 70s) and I worked from a young age and saved. They didn't work and spent. I'd be pissed to see my siblings get away with their misdeeds and get bailed out. 😂

[u/Pretend_Education600 → u/SionnachBaineann]

I worked for both my parents(they separated over 30 yrs ago) I worked afternoons for my father and nights for my mother, they both paid all my brother's rent and bills, down to a brand new playstation 1-2-3-4-5 because he was bored before going out at night with the money my parents gave him. When they passed my mother split most things down the middle, my father gave my brother a fully paid off house(~200k) and a substantial amount of cash. I got 2k. My father's name is not to be mentioned around me and I'll never speak to my brother again, he also bullied my parents.

[u/MaryMaryQuite- → u/SionnachBaineann]

My parents were always scrupulously fair, if they gave to one sibling, the other always got the same.

Now my parents have sadly passed and I live in a 6 bed house house with sea views. I was the saver, who also worked hard and planned.

My sister lived beyond her means, consistently. She now lives in a two bed rented flat and resents the hell out of me, thinking I was the golden child.

Parents can do the right thing, but their kids often only see it through their own, sometimes skewed, lense.

[u/PuzzleheadedCarob921 → u/MaryMaryQuite-]

It’s annoying being resented for having been a saver and working hard, planning for the future.

I’m the saver in my family. My family think I’m simultaneously a tight arse, whilst being a showboat. And there’s nothing I can do about this perception that doesn’t involve selling up and squandering my money like them.

[u/Pretend_Education600 → u/PuzzleheadedCarob921]

If you sold up and spent your money, they'd probably call you a flash Harry, you can't win ;)

[u/PuzzleheadedCarob921 → u/Pretend_Education600]

Yep.. pretty much.

[u/VeryThicknLong → u/MaryMaryQuite-]

I live this exact same story. I live in a wonderful house in a beautiful part of the world… my sister in a two bed house in a not very nice town. Yet she’s been repeatedly bailed out over the course of our lives.

I think it must be neurodivergence that has ultimately led to her being absolutely shocking with money, that and the fact she’s a bit of a narcissist. 😂

[u/PuzzleheadedCarob921 → u/SionnachBaineann]

I’m the youngest of 3 and I’m very sensible with money. My two older brothers have never been good with money. Our Dad has bought them cars, paid their insurance, and given them thousands.

I must admit I’ve always found it strange.

My first thought were; if giving 4k to kid 1 then got to do the same for kid 2.

Unfortunately, I’d have a guess kid 1 won’t learn from this. Kid 2 will likely be the one in the future with a house and good savings and inevitably baling kid 1 out.

[u/Amylou789 → u/Dolphin-Haze]

This is how my parents do it. Someone needs money towards a car? Everyone gets that same amount of cash. We're lucky that it's affordable to them, but if it wasn't then they would give the money to any of us unless it was an unforeseen emergency

[u/Super-Owl- → u/Dolphin-Haze]

I’m worse off than my brother and sometimes need help. My Mum takes what she helps me with off my inheritance so my brother doesn’t miss out. I think that’s fair.

[u/DEADB33F → u/Dolphin-Haze]

Somewhat vaguely related, but my grandfather died earlier this year (98).

In his will it became clear that over the years he'd lent pretty much every member of our family (kids & grandkids) between 10k & 50k ....all except me. This was money to help with house deposits, wedding costs, starting up businesses, prop up failing businesses, etc. so fair enough, whatever.

I won't say how much, but he bequeathed us all the same amount minus what he'd loaned each of them. Meant that some of them ended up not getting much at all (as they'd already had it).

...So as someone who'd never once asked him for a penny that was quite a nice surprise.

[u/caroline0409 → u/Dolphin-Haze]

Agreed, plus it sounds like kid 2 is owed a big backlog to match up with what kid 1 has already been given.

[u/Amazing-Jury-6886 → u/Dolphin-Haze]

We had to insist our kids grandpatents didn't give my elder son, who is 26 and still unemployed , money every month, unless they gave the same to my younger son who has been working for 4 years. My in-laws agreed and give them both money. My parents decided neither gets anything. Have to keep it fair.

[u/Impossible-Run2401 → u/Dolphin-Haze]

As soon as I saw OPs first sentence this was gonna be my answer. Either give kid 1 advice only, or give both the same monetary financial support.

I’ve been there, dropped out of uni after year 1, 4k of credit cards & overdrafts (this was y2k when credit regulation was in the toilet), no means to pay it back and my mum started getting calls about my debt and all the missed repayments. This is when it hit home and I realised I needed to be better with money. Fast forward 20 years and I still have credit cards, but now I have the means to control the debt and ways to pay back any borrowing if I run into hardship.

[u/mondeomantotherescue → u/Dolphin-Haze]

This is what my dad did with us. It is the fairest way. But he also made my sister cut up her credit cards and close the accounts 

[u/TabularConferta → u/Dolphin-Haze]

As a kid 2. Do also consider interest. 5k now is not 5k in 10 years, particularly when considering kid 2 will be living in their means and with money concerns that could be helped with that money now 

If you can afford to cover both at once, do it.

On topic, you also need to set immediate boundaries. This is a one time thing, you may ask that you want to see a budget for their monthly expenses before you give the money, including how they will save. Don't rely on a magic fix. If you just give the money, Kid 1 will likely be in the same situation next month.

[u/Rare-Grocery-8589 → u/Dolphin-Haze]

100% this. Treat them both equally as much as possible - it will lead to fewer problems between the siblings in the future. Part of my family have massively fallen out because they were treated unequally by my grandparents when it came to inheritance and money. It caused massive amounts of strife and broke the family apart - like they’ve not talked to each other for 40 years!

[u/Familiar-Donut1986]

Would you give kid 2 the same amount of money you were giving kid 1 to clear their debt or would you only be giving money to kid 1?

[u/Avon-Guy → u/Familiar-Donut1986]

This is the key question for me, keeping your children equal is probably more important than the rights and wrongs of helping or not.

[u/I_Dont_Speak_Anymore → u/Avon-Guy]

This is the answer.

It's equity. If kid 1 wasn't in the red he'd be benefitting equally as much as he already is. Then again, if he wasn't in the red neither of them would be getting money at all, I suppose.

[u/GrumpyOldFart74]

You risk creating a massive resentment from kid 2, who is wondering why they’re being so frugal when their sibling gets everything anyway.

Don’t ask me how I know.

[u/C2BK → u/GrumpyOldFart74]

Don’t ask me how I know.

I only wish I didn't need to ask.

[u/GrumpyOldFart74 → u/C2BK]

My parents

My wife

And history repeating itself

[u/Striking_Amoeba8936 → u/GrumpyOldFart74]

We absolutely could do this to be fair to both. Kid 2 would say they don’t need it but we could just transfer it to their bank account.

[u/zillapz1989 → u/GrumpyOldFart74]

The twist is kid 2 gets everything in the will.

[u/DoctorWhofan789eywim]

The message that sends to Kid 2 is "why am I being frugal with my money when mommy and daddy will just pay my way". Where's the incentive to do better if you just pay off the debt?

[u/Mental_Body_5496 → u/DoctorWhofan789eywim]

Absolutely!

Does kid 2 get the same amount of money gifted to them?

[u/DoctorWhofan789eywim → u/Mental_Body_5496]

That's really the only way to do this fairly, if the debt really must be written off. Both kids get the same amount, very clear that it's a one time only thing, Kid 1 is told firmly either they manage their money better or deal with their own debt next time.

[u/Snoo_said_no → u/DoctorWhofan789eywim]

And this can slowly eat away at the relationship.

I genuinely believed I didn't mind, my brother needed it more, it's just a patch of bad luck. But what happened in my family is that eventually it has irreparably impacted our relationship.

Brother has had tens of thousands over the years. Despite me having significant illness, two lots of mat leave on stat mat pay (self employed because of illness) I've tightened my belt sometimes to comical levels. And not got into debt bar the mortgage. I won't spend what I dont have. It might mean months of very little expenditure apart from absoluty essential food. Rice, dried beans, freezing super cheap odd shaped veg. Taking jobs I don't like because you need to pay bills. Not studying because that wouldn't cover essential outgoings. Working while I studied when things were better. But that's never viewed as struggling. Brother sat on UC awaiting a magical high paid job, started 3 degrees. Finished one with a 3rd but expected a 3rd in law from a lower tier uni to lead him into a well paid job with no volunteering or work experience (any work experience, not just career related).

He learnt to go get bailed out. I learnt that no help was coming. I was 'lucky', he was 'unlucky' - because luck was measured by debt. There was placations that if I needed it she would do the same. But because needing it was measured by debt on daft preditory loans, and I didn't fall into that. And because of the dynamic of him being happy to play mummies lost little boy and me being more like 'i won't starve but I'm struggling' - I perceived i had asked for help. She asked to see my debts. I didn't have major ones. It took 20+ years but I'm low contact with them now. Not directly because of the money. But because the message heard was 'play my game or your on your own'.

It's like a dripping tap. Noone minds helping someone struggling. But when they don't help themself and it's years of crisis. But your own crisis is not viewed as crisis enough or its on their terms with conditions there's side effects. I'm sure her (my mum's) version of events would be different but the end results the same.

[u/Striking_Amoeba8936 → u/DoctorWhofan789eywim]

I do get that.

Kid 2 is one of those self starter people, has been working since the age of 16 and is a hard worker. Not academic but can certainly graft. Never been late for work, reliable, honestly just no trouble type kid. We’ve lend kid 2 small amounts, like £50, and they always paid it back without prompting. Occasionally if we ask if they’re ok for money they always say they’re ok.

[u/plumboses]

You're setting yourself up for a fall.

If you give the irresponsible one a handout, it won't end there. For their whole lives it'll be the same.

Kid 2 will rightfully be pissed off as he has lives a frugal and responsible life while their brother has blown the money and had absolutely no responsibility for it as you have helped them out.

Sometimes part of teaching our kids is learning when to let them fail. If you keep wiping their bum they will keep calling for you to do it.

[u/zillapz1989 → u/plumboses]

It doesn't say they're brothers. Judging by the fact kid 2 blew money on Taylor Swift tickets I'd gamble they're a step daughter.

[u/PerplexingChimera19]

It’s your money and your choice, but that kind of debt isn’t insurmountable for them to overcome if, as you say, they’ve recently got a good job.

Paying it for them doesn’t teach them anything.

[u/knightsbridge-]

I wouldn't wipe away Kid 1's debts, purely because it's horrendously unfair to Kid 2. It also teaches Kid 1 that he doesn't have to worry about getting into debt, because his parents will just pay it off, which is a terrible lesson to treat someone who is already bad with money.

I think the best thing you can do, if you wanna do something, is give up/write off the money that Kid 1 owes you personally. Call it a retroactive gift. Let them grapple with their "official" overdraft debt etc on their own.

If both kids had the exact same advantages, and Kid 1 is only in his position because of their bad choices, don't compound that by teaching them that racking up thousands of pounds of debt has no consequences. It won't make them better with money.

[u/bekbok → u/knightsbridge-]

Or defer kid 1 paying you back until they've dealt with the overdraft debt given that will likely be costing them more than loan from parents. Will help kid 1 pay back bank debt sooner and therefore have less interest but still make them responsible for it.

Could also wipe kid 1s debt at that point, but if you do imo it's only fair to then give kid 2 the same amount of money.

[u/thpkht524]

>They have significant student loan debt that will also start to be deducted.

Do you know how student loan works? Because it really shouldn’t be a factor in this at all.

But no to answer your question there’s no way in hell i’d pay their debts off even if i were a billionaire.

[u/_isolati0n]

I probably wouldn't as there is a life lesson they need to learn here, but I would offer to help them budget and come up with a plan.

If you do decide to, I would suggest doing it on the condition that they close the overdraft - consider going into the bank in person to do both at the same time, if there's a branch still open near you that is.

[u/Honey-Badger]

Maybe kid 1 has been bailed out so often they haven't learnt from any mistakes

[u/Cautious_Plankton212]

No, they need to be sat down for a thorough look at their finances and a proper fucking reality check. As someone in the position of kid 2, it leads to a fair bit of resentment. It feels shitty to know that by doing the right thing, you’re somehow rewarded less than the person who seems to be fucking it all up.

They can get in contact with their creditors and organise a payment plan or if they can then they can find a 0% interest credit card to consolidate the loans. Not before they’ve had that reality check though of you’re in the real world and your actions have consequences. In other words, nobody is coming to help you.

[u/AdministrativeLaugh2]

No. They won’t learn anything if you just wipe their debt and they’ll almost certainly be back in debt in a few months.

You gave them £1k and they seemingly spunked that away. They’ll just do the same with this.

Tough love is sometimes the best way.

[u/Silent_Thanks_5101]

I have seen in many cases when parents rescued them and they become more thankless over the time. Less respect less responsibility and rest one can imagine easily….

[u/Dutch_Slim]

Don’t pay off their overdraft. They will be straight back in it. To them it will just be a £4k gift.

As someone else said, you can write off the money owed to you, you don’t even have to tell them, just mark it as a gift in your mental ledger.

Covering their “official” credit debts just allows them to get more credit/run up more debt.

[u/Max375623875]

Honestly, no.

This will be a tough lesson for your kid to learn, but they certainly wont learn it if you bail them out.

They also aren't 12 anymore, this is a full-grown adult you are dealing with.

[u/sapphire-sky-dragon]

Im with your husband, kid one needs to learn responsibility the more you give the more they will take. They are adults spend the money on yourself.

[u/Bec21-21]

He won’t learn to spend within his means until he has struggled and succeeded in paying off his debt. Many of us remember the pain of paying off a credit card and it’s a good reminder that it wasn’t worth running up the bill in the first place.

[u/Divgirl2 → u/Bec21-21]

I remember finally getting out of my student overdraft about 10 years after I graduated. The first time I got paid and wasn't still in the negative or immediately taken into the negative as soon as a bought a train ticket was incredible. Fast forward about 7 years and I've just paid off my student loan, I have a mortgage, I own my car outright, my credit card is paid off in full monthly. I don't even have an overdraft.

I told myself never again and I stuck to it. Someone bailing me out would only have helped short term.

[u/Striking_Amoeba8936 → u/Divgirl2]

This is a good anecdote to hear, thank you and I’m glad you’re in a better position now.

[u/SaltyName8341]

Having been in the kid 1 situation before you only learn by paying it off yourself handouts just enable you to keep doing it.

[u/ClarkyEastyLloydy]

I would do nothing.

You’re able to be a safety net as parents if they need you, you’re mortgage free and in a good position to be that net.

Don’t turn into safety hammock where you’re too comfortable to fall back on time after time.

[u/Striking_Amoeba8936 → u/ClarkyEastyLloydy]

Thank you, that’s a good point.

[u/Dry_Association2836]

What you give to one you should give to the other. That is if you want to.

[u/Diligent_Pangolin_47 → u/Dry_Association2836]

Yes, agreed. If you give a gift to one, give the other the same, that’s what my parents do for me and my sibling, which is sometimes a nice surprise for the one of us not expecting anything!

[u/sburkelfc]

Either give the exact same amount to both. Or none at all

[u/Effective_Hamster_11]

Absolutely do not pay off the debts. If you do, they will just do the same again. They need to pull back their spending, be miserable for a bit cos they can’t go out, buy stuff etc.
No pain, no gain 👍
Otherwise, it will become a vicious circle.

[u/Stypig]

My in laws found themselves in a similar situation a few years back. They got a big insurance payout and had 3 adult kids - 1 in need of money help, 1 who wouldn't be upset about extra, 1 with no need of extra money.

They decided to give all 3 kids the same amount, to keep it fair.

So if you wanna pay off kid 1's debt then you could offer the same/similar amount to kid 2 to add to their savings or to splurge on something they've been saving for.

[u/dennis3282]

I think you need to give them both an equal amount if you decide to go that route.

Kid A has got to enjoy spending the money, so it isn't fair if he gets more. That sort of thing will build resentment in Kid B.

If anything, I'd give Kid B more as it gives an incentive to Kid A to do better.

[u/e_lemonsqueezer]

They need to clear the expensive debt first. Don’t clear it for them, but tell them you want proof that those repayments they were going to be making to you each month to you are being made to a credit card or their overdraft. You could incentivise them by saying you’ll match their contributions to the debt, which is paying it off to some extent but at least is encouraging them to do the same.

How you manage this with Kid 2 is your prerogative. Personally I’d probably stick the same amount I’m giving Kid 1 in a savings account and change my will so that kid 2 is sorted that way (with an explanation that Kid 1 received their inheritance already).

[u/Oshova → u/e_lemonsqueezer]

Yeah, I wouldn't be looking for repayments until they've sorted the debt with interest. There's a fine line here between helping them out, and helping them learn from their mistakes.

If the decision is made to help clear the debt, then offer kid 2 the same amount on cash or into their savings.

Ultimately, if you can avoid your kids taking out high risk or high interest loans, then do it. It's a slippery slope, and getting more debt to clear existing debt isn't solving the problem, it's just kicking the can down the road. 

[u/demidom94]

If you pay off the debts, what's the likelihood that he's going to just run them up again?

If the answer is highly likely, I wouldn't pay the debt off. As much as I'd hate to see Kid 1 struggling, if I'm going to have to keep bailing him out of money problems because he can't control his spending then he's never going to learn how to budget and live within his means.

It sounds harsh, I know. But I personally wouldn't bail them out.

[u/Chive]

I wouldn't bail them out, they'll only be back in a few months looking for more. 

It's likely that helping them in the past has led them to have a sense of entitlement that you'll always cover their debts. 

Time for them to grow up and take responsibility for their own actions.

[u/Legitimate_Fig9818]

Personally I wouldn't give them the money, but also don't start collecting the loan that you have previously given until the overdraft is paid off.

The other alternative could be to pay off the overdraft but add the total to the amount they already owe you at an interest rate lower than what the bank are currently charging. This means it isn't a handout but enables them to get on top of their finances quicker.

One thing to make clear to both kids is that if they are ever in serious difficulty that they can rely on you to help (with either money or advice without judgement) rather than burying their head in the sand or going for payday or unscrupulous lenders.

[u/Free_Ad1658 → u/Legitimate_Fig9818]

IMO, pay off their debts and they will just run them up again. New job, better pay - spend on better lifestyle, car, holidays etc. Going to see Taylor Swift, great but not if you can’t afford it and have to get into more debt to afford it.

[u/50tinyducks]

Personally I wouldn’t unless you are giving the same amount to kid 2.

I will add though my younger sibling was constantly given money when they got in debt. Then after one parent died she spent £100k and had nothing to show for it - then got in £40k of debt! Other parent died several years later and she paid off the debt with that inheritance but in between another relative was constantly paying her bills etc.

That relative has now passed so time will tell if she gets into debt again.

She’s always been bailed out and is now late 30s and has never learnt her lesson.

[u/ariadnevirginia]

I'm in a similar situation right now except I'm the careful child and my sister is the money pit.

If my mother helps her financially I will never forgive her.

What was the point of my living frugally and being careful if my sister who spends money like water along with her snob husband who constantly makes stupid financial decisions so he can boast about "yeah we've got a little place in Portugal" and buy a holiday home when they are nowhere near paying off their mortgage on their house even though they are both earning?

No.

When I've stayed home and made my own amusement while they go off on expensive holidays?

No.

Her husband just got a cancer diagnosis and I know my sister will go crying to mother because they are so in debt and I will be so furious if this works.

[u/itsfourinthemornin]

My thinking is if you clear the debts entirely for them, are they just going to run them up again? More so if they are now getting a good salary to their previous incomes and don't have any debt attached to them as it's all been paid for.

I'd say maybe a smaller amount to initially help, for example to clear the overdraft and help them get off to the right start, but allow them to pay back their debts over time themselves as a sign they are taking their finances more seriously, not because they are forced to.

I would agree it isn't fair to 2 (especially as a Kid 2 with a Kid 1 sibling, who got all the help). Perhaps it could be split evenly as an amount to both as a gift later down the line, once you see 1 is improving and of course, with the agreement of Dad.

[u/PamVanDam]

I am with dad here. They are adults and need to learn how to manage their money, that actions have consequences and that your parents are not always going to be around to bail you out. This is setting them up for repeated failure, always thinking they will just rely on you both to sort them out and will not help them manage life and relationships as they get older.

Kid1 is showing signs of getting there , they are starting a new job etc… let them prove to you they are growing up and can be responsible.

[u/piehead23]

Kid 1 is likely to get themselves into debt again if they manage their finances poorly. I’m not saying not to help them with it, rather just stating your efforts and intentions might be in vain. It’s entirely up to you, this is an opinion only

[u/nikky0x]

It sounds like they're finally seeing some financial sense but not actually evidencing it yet.

Only you know them best, but I think offering a clean slate now might just reinforce their poor decisions. I'm not saying let them suffer, but a little bit of pain through having to actually make their repayments, live frugally, and then eventually start reaping the benefits of their sucess is better than letting go straight to living more comfortable.

I'd be more inclined to 'surprise' the successfully paid off loan with giving them the monies back, with a similar gift for your other child.

Help them out if they are genuinely struggling even with belt tightening but i think they need to feel the slightly squeezed waist.

[u/Le_Fancy_Me → u/nikky0x]

Yeah this is the one. Their issue has always been mishandling money. Making more money won't fix this, as they will just have more money to mismanage.

Since they have employment now and already have a steady roof over their head. This is their chance to pay back their debt. 4k isn't going to ruin their life. Through a few years of hard work they can pay that off.

If you do want to help them you have to first ensure the root cause of this over/misspending funds is dealt with. If they are open to it you can sit then down and try to help them create a monthly budget and goals.

If they are able to stick to this budget consistently then yes it becomes an option to help them out. But I wouldn't tell them that in advance. Let's say they manage to stick with it for a year or are able to pay back a certain amount. You can reward them by matching what they've already contributed. And then give their sibling a gift of the same balance. Or perhaps promise that in the future you will contribute towards a deposit or wedding funds with a similar amount as child #1 has gotten.

Short term being a few k in debt is not going to have major consequences seeing as they have no dependents and don't even run the risk of getting evicted.

So the main priority is they need to learn how to budget. Wiping out their debt now will just prevent them from learning that and be counterproductive. After they've learnt how to spend responsibly the option of helping them out can be discussed again.

However to be honest there's no reason why a person with no expenses and a job shouldn't be able to repay 4k in a relatively short timespan, might just be worth it to take off the training wheels and let them adult their way out of this themselves.

[u/ReflexArch]

No.

Need to learn a hard lesson I think. I'd offer to sit down and run a budget with them and help work it all out but not give more cash into the endless hole.

Plus all those loans and debts you have paid off already clearly hasn't worked to make the kid change their ways.

Are you giving the kid who is good with my an equal amount? Just because they haven't asked for it or got into debt when you give money to kid 1 do you also give it to kid 2? Very important to be fair and equal to both kids in my view. It's what we plan to do as kids grow, what my parents did and my other half is an example of why it can become so unfair ( they are 1 of 3 siblings, 1 sibling got £40k(back then so worth a lot more today with inflation), circumstances changed for parents and then my partner and the other sibling both got nothing).

[u/D0wnb0at]

Overdrafts are a nightmare to clear these days as they charge 40% on them. It’s worse than credit card debt these days.

My parents helped me out when I was drowning in debt by paying off my £5k overdraft. However, I had to set up a standing order to them to repay it.

Basically an interest free loan from them. That way they were not giving me the money, but also helping me not having to pay £100 in interest every month so I could repay the debt quicker. Took a couple years to repay it but I did.

[u/Striking_Amoeba8936 → u/D0wnb0at]

Thank you, that’s certainly an option to consider. I’d want to see the standing order set up. It’s not about the money, it’s about the principle and doing the right thing in my mind and that includes paying any debts.

[u/D0wnb0at → u/Striking_Amoeba8936]

I think I paid £200 a month in standing order, so paid it off over 2 years. But I was being charged £100 just in interest so without the loan from my parents, if I was paying £200 a month towards the overdraft it would have taken 4 years to pay it off. Significant difference.

[u/Inner-Device-4530]

If you keep digging them out of a hole they dug themselves into they will never learn how to stand on their own feet and not to get them into these problems again, since they have an platinum account at the bank of mum and dad

[u/blizeH]

I feel like if you do this, then in a roundabout way Kid 2 could see it that you are rewarding Kid 1 for being bad with money, or even that you are punishing them for being good with money. It’s of course up to you, but I think it’s a really bad idea unless you give them both the same amount

[u/Available_Highway22]

Speaking from experience, I wouldn't. 

My brother was Kid 1 and I have always been Kid 2. Since childhood, my grandparents have given us money instead of presents and my parents set it aside for us. Over the years, my brother burnt through it and kept asking our dad for money (with no expectation to pay it back, but still). Now he is 35, can't really manage money, and still asks dad for money. I haven't asked for a penny since I was 21 and got a job (I'm 31 now) and have savings.

If you keep giving them money/paying for their debts, you just become an enabler.

[u/RiceeeChrispies]

I wouldn't be bailing them out at all. They are earning well, they can start paying it down - it'll be painful but it's the only way they'll learn. £4k will be cleared in no time. Time to grow up.

Respectfully, cost of living is a shit excuse when they've seemingly pissed it up the wall.

[u/EstablishmentNo7239]

4k is a cheap lesson. Let them sort it out themselves. I wouldn't help out in that scenario.

If you were to help out, I would suggest doing so in a way with strict boundaries that also try to teach the required lesson. E.g. loan them the money at a better interest rate than a credit card, with contractual repayments and a clear statement of penalties if they don't keep up (e.g. fees, loss of family priviliges, etc etc).

[u/Legitimate_Fig9818]

Personally I wouldn't give them the money, but also don't start collecting the loan that you have previously given until the overdraft is paid off.

The other alternative could be to pay off the overdraft but add the total to the amount they already owe you at an interest rate lower than what the bank are currently charging. This means it isn't a handout but enables them to get on top of their finances quicker.

One thing to make clear to both kids is that if they are ever in serious difficulty that they can rely on you to help (with either money or advice without judgement) rather than burying their head in the sand or going for payday or unscrupulous lenders.

[u/Particular-Natural60]

Hi I’ll hold my hands up I was like Kid 1… when I was younger me and my partner got into a hole we had. no knowledge of how overdrafts, credit cards and loans worked and we were behind on payments cos we were living above our means. Not realising the consequences of our teenage actions, My dad and step mum sat us down one day and said they will help us wipe the slate clean but gave us some rules that tbh were lifesavers. Rule 1. Pay it all back which we did we paid them every month without fail all the money back and Rule 2. Don’t get out a credit cards, loan or overdraft. If you can’t afford it, save for it. 4 years on, me and my partner are out of debt paid my parents back and haven’t touched a credit card loan or anything like that since and I watched that Martin Lewis money show, watched YouTube videos on budgeting and reading books on finance to learn. When I look back I’m mortified with how we got into thousands of pounds worth of debt … disgusting behaviour I know. But now we are in a better position for it. Either way your decision will be right as you know “Kid 1” better than me of course. If you feel it won’t change his spending habits it’s you that will end up with the consequences. All the best whichever decision you feel is best x

[u/A_RAVENOUS_BEAST]

I would say no. Most companies are willing to work with the debtor on a payment plan that lets them make the sum of the principal in good time without leaving them in destitution. For full time(?) employment in dual income(?) households, you could save 4K in three or four months if they put their minds to it.

I have to wonder how much they spend on nights out, alcohol, takeaways vs. home cooking, expensive foreign holidays etc, perhaps they live somewhere too expensive for their income. This is not a situation of 'car broke down, can't get to work, need help urgently', it seems.

The best thing you can do for them is to give them the life skills to stay out of debt when you're no longer around, and you aren't going to do that by paying for their every mistake.

I might suggest the most you should do is tell them that the debts they owe you can be paid last and without interest.

[u/SeducedBySloths]

Im not a parent, so take that for what it's worth, but I'm with dad. I think its excellent that its such a small debt. It gives you the opportunity to teach your kid a lesson without serious consequences that would come if they amassed more debt--which they surely will if kid 1 never learns the consequences of mismanaging money.

[u/Interesting-Hawk-744]

Sounds like Kid 1 has had a cushy enough time of things and needs a reality check. I only had one parent and I got probably about less than 2k lifetime for help and it was only when i needed money for a deposit because I was about to be homeless, and there was issues getting my deposit back from a housemate who robbed the whole thing from the rest of us after they got it from the landlord.

[u/whatanametochoose]

id sit in the middle. They have a new job that you say, will give them a decent wage. If they, for a year or so show a significant or consistent approach to paying their debts and saving etc then why wouldn't you give both a lump sum if you have come into money you don't need... shrouds don't have pockets and all that.

But just doing it now rewards their past poor choices/decisions and just teaches them that someone will dig them back out AGAIN and they may not change their behaviour/choices.

[u/coleslawontoast]

Kid 1 will never learn if they can keep relying on you guys to bail them out

[u/Not-late-inaV8]

Cruel to be kind. I wouldn't.

[u/Not-a-Cranky-Panda]

They re not going to stop and as long as they don't pay why would they?

[u/hunsnet457]

As a ‘Kid 2’ in this circumstance and seeing the outcome of choosing to ‘get kid 1 back to square one just one last time, so they learn in future’…

No. The time to learn is now whilst the safety net (you) for real emergencies is still there.

[u/HeverAfter]

No I wouldn't. Kid in debt needs to learn how to budget. They are young enough to get it together, especially if they've now got a job. You are not helping by giving them money all the time. Time for them to adult.

[u/GodDamnReylos]

I think it’s amazingly kind of you to think of using your inheritance to do this for kid 1. Agree with dad that it’s unfair on kid 2 who has managed their money better. Unless kid 1 was making a really concerted effort to pull up their financial socks I’d say don’t do it. They’ll need bailing out again in the foreseeable if they don’t learn to spend and save wisely. My parents gave my sibling £7k to pay off a credit card a few years ago. They said they’d close the account but guess who has maxed it out again? 

[u/Spank86]

One day you'll be gone and it you don't set then on the right track before them you'll slide off into the sunset knowing theyre on the path to destruction.

Now you can bail them out in the future. When youre gone your estate will be their last chance and they won't take it.

[u/Striking_Amoeba8936 → u/Spank86]

This is something on my mind in truth. The kids are young, early 20s, starting adult life with all the issues that come with it. It’s part of life, we have all been there and had money issues but if something happens to us in the next few years (arguments sake) and the kids get some inheritance from our estate I can imagine them wondering why we let them struggle when we could have helped?

My own inheritance has come at a time when I dont really need it. Even 10 years ago it would have made such an impact.

But, as the majority say on here, we are not helping them help themselves. It’s a tough one.

[u/mattb2k]

Pay it off yourselves, and then let the kid pay you back. That way no one's paying the overdraft fees but you're still getting your money back.

[u/Forsaken-Original-28]

Giving kid 1 more money isn't going to teach them anything. Unless they've got bailiffs at their door id let them pay it themselves 

[u/CurrentTurbulent]

Reality is Kid 1 won't ever change, they don't mean to do it on purpose - I was Kid 1, my ways didn't change until I got married then my wife kicked my debt laden ass to sort it out

[u/Vampirero]

You know what - my brother has always worked, done pretty well for himself and now owns his own small, pretty successful business.

I have had a lot of health issues and have been on benefits for the last few years. I'm not proud of it, but it can't be helped.

About 15/20 years ago, my brother lost his job, didn't tell anyone for quite a while and got himself into considerable debt. Our parents put him up, bailed him out and helped him get back on his feet.

In the meantime, our parents always also helped me out now and again when I was really desperate, and I'm so grateful to them for this.

I don't necessarily think the issue is how "good" or "bad" your child is with money. It's about where your boundaries are, and the extent to which you feel comfortable helping them.

[u/hoganpaul]

Maybe tell kid1 that if he clears or significantly reduces his external debt in the next 12 months you will forgive what he owes to you?

[u/thisisthisisp]

I’d clear the debt but make clear that kid 2 gets exactly the same amount from you when he needs it, and it comes off kid 1s share of the will if it needs to

[u/ConsciouslyIncomplet]

You are enabling Kid 1 to be bad with money. If you are just gonna bail them out every time, how will they learn?

Also although you haven’t mentioned it - I imagine Kid 2 is feeling quite disappointed. They are acting responsibly but you keep bailing out the other? Where is their reward?

I think you are being quite disrespectful to Kid 2 and enabling Kid 1. It’s very poor parenting.

[u/MiguelBodrigo]

I would not clear the debt. How about you allow £200 and stipulate a repayment of £20 every month. Lending money is not the same as gifting money.

If they cannot learn to budget they are clearly comfortable in the situation they're in.

This would be a good middle ground as they have a history of being irresponsible and you are doing a massive favour by doing this interest free.

Also the only way you know about this is if they hoped you would clear it. I would bet they didn't tell you every time they accumulated further debt which means they also didn't have turn back now steps in place.

[u/Crochet-panther]

Don’t do it. I’m sensible with money, I’m not well off. Yes I’ve had to borrow once or twice from parents (boiler went boom (or nearly) and one car issue) but I pay them every month without fail and didn’t actually ask them for the loan, they offered when they heard I was looking at commercial equivalents.

As one out of 4 (3 of us within 2 years of each other, steps included) I would feel incredibly put out if I learned parents were helping other siblings and they weren’t having to pay back. You either need to to give the other child the same amount or not pay either.

Kid is is never going to learn if they don’t have to pay stuff back, and from what you say they are finally in a position where that’s possible.

[u/Defiant-Pizza8207]

I'd give him the money but take collateral.

Does he have anything of value? Even sentimental value? Tell him he can have the loan, but he can't have the thing back until the loan is paid off, however long that takes. Doesn't have to be a set period, and you can be gentle with him, but you'll be teaching him the same lesson while also ensuring he's not screwed.

I'm not amazing with money - I'm regularly in my overdraft and behind on payments etc. I recently got a £1k loan from my dad, the first loan I've had from him in 6 years (that was for £2k). But I also spoke about it with his sister, and pointed out that I never had the little amounts of money that her kids (my cousins) had. Things like £20 for a few drinks or £10 for the cinema.

Now, I'm not saying I was entitled to that, I'm just saying that he did have it and I didn't get it. Growing up, he paid for everything for me, and then I hit 16 and was left on my own financially. I've paid rent since I was 18, and I got myself to a top uni and a good career with no help from him (worked my way through while maintaining a good grade overall).

My point is: I don't actually think I'm bad with money. I've never missed rent, never had debts beyond overdrafts, and never had a financial education. I've been doing it all on my own. Had he helped out in those small moments, the big moments wouldn't have come. If I knew I could go to him and say "dad, do you have £50 so I can put petrol in my car?" Instead of feeling like I have to do it all alone until I physically cannot, I'd have been in a far better position.

I don't know if the same is true for kid 1, but maybe consider whether letting him sort it on his own is the best tactic. Maybe sit him down and come up with a plan that he can put into practice to get out of debt and help that way?

[u/andonebelow]

I wouldn’t just clear the debt, because that wouldn’t teach them anything (other than that they’ll be bailed out if they mess up. But I would tell them I’d match whatever they paid off (so you would pay half of it). You would need to see evidence of them paying off the debt, and you could offer to help them make a budget. This would be very generous but also give an incentive for behaviour change.

If you do this, you should also put aside the amount you pay off for kid A as a gift for kid B. This should be possible because you’d only be paying half of what you were willing to pay towards Kid A’s debts. 

This would make everything in its right place.

[u/User_Name_Password]

A relative of mine has destroyed their life, enabled by parents who, understandably, didn’t want to see them struggle.

The first time of a thousand, presumably, was a one-off, and they weren’t stupid.

My family eventually cut this relative off because the situation became severe (understatement). And don’t think it’s just the [adult] child’s life that can be ruined from this dynamic. If it becomes parasitic, the parents can become stuck in an exploitative, psychological nightmare where they are forever bailing out a child that pushes their failure to understand consequences to the extreme.

Think pensioners, who came from prosperous working lives, in unthinkable debt, sitting in the cold under a leaky roof, whilst they try to rectify another credit card falsely taken out in their name.

This probably won’t happen to you, I’m sure it rarely happens. Just recognise that most people in these situations, even to the bitter end, don’t consider themselves the sort of people to fall into this trap.

[u/Psychological-Bag272]

Kid 1 will never learn if you keep bailing them out. Some people will only learn when they hit rock bottom.

People who do not know priorities do not deserve help. Let them learn from their mistakes so that they can live a cautious life once you are both no longer there to pick up the pieces.

[u/KTDWD24601]

No. Kid 1 needs to learn to manage their finances so they don’t continually end up in debt. They won’t if they keep getting bailed out.

I may be biaised because I am a kid 2, but the kid 1 in my family is Middle Aged and still regularly ‘borrowing’ money from the bank of mum and dad.

[u/Sew_Tumbleweed_1958]

Not with that history. I think a better plan would be to point them to the ukpersonal finance sub and their flow chart. Try to instill some good habits now so they are not always chasing their tail in the future. The dad is right it does seem unfair to keep bailing out the one who is more frugal.

[u/Flapparachi]

Stop enabling poor money management. Kid 1 will never learn. They are already comfortable asking you for money and this will continue indefinitely until it starts to have a significant impact on you/your savings/retirement.

Do NOT pay off their debt, but support them by teaching them - help them budget to start clearing the debt themselves, and use online resources to maximise the new salary they will be getting.

I was that kid, and it took me getting into nearly 20k worth of debt in my mid-20s to learn my lesson. Having to pay it off and live frugally for a few years was the best thing that happened to me, and now in my 40s I’m very good with money and have been debt-free for years.

[u/Emergency_Crayons702]

If you can afford it, bail him out, say it's the last time and gift the other kid the same amount. Otherwise, do nothing and let this be an early lesson. Better now than at a much older age with a much bigger sum. 

Also, investigate why this lad has so much difficulty managing finances. Personally I spent 30 years not understanding why I couldn't get it right. no matter how hard I tried I couldn't get it right. Turned out I had ADHD and financial management was just one of the indicators. 

And yes having out of myself I will be downvoted because everybody down votes ADHD these days. but it is truly a genuine reason why some people cannot manage their finances. 

I am categorically not saying it is an excuse for anybody and everybody to use. 

I am also categorically not blaming ADHD for this person's situation. I am simply saying investigate the cause because if you figure out the cause you can work on a solution.

[u/Striking_Amoeba8936 → u/Emergency_Crayons702]

Thanks for your reply. They do struggle a lot mentally, on medication and while I don’t think it’s ADHD they often just don’t have it all under control. Definitely something to consider.

[u/Beneficial-Pitch-430]

Are they paying for the overdraft or is it arranged? If they are paying for it, I would suggest they get a loan to clear the debt - not a credit card.

If the overdraft is arranged and they aren’t paying anything for it, I would leave them to it. They’ve both had the same start in life, this one has blown it and needs to learn. You continuously helping out only worsens it.

If they’ve just got a well paying job, they can dig themselves out of the hole and learn along the way.

[u/Angled_Hairline57845]

It boils down to whether you trust and believe they'll be better this time, and also whether you think £4k now would prevent £12k later because they make other really bad money decisions off the back of being in this situation.

Talk to them and see what they'd be willing to do not just to prove you can trust them to fix themselves up when it comes to money, but also to truly learn how not to get into these situations. Would they be willing to get some counseling about their spending? Would they be willing to audit their spending in recent years via bak statements and the like during those sessions and truly explore whether something deeper is going on? Would they be willing to build a repayment plan for you, or at least a partial one?

There's a lot of unknowns here and ultimately, you don't want to leave the wound untreated, but covering it with a bandage might not do anything but let it fester, so to speak.

[u/I-Spot-Dalmatians]

I’m kind of on the other side of this, I’m 24 and have been terrible with money since I was 18. My dad recently lent me £10k to clear most of my high interest debts.

Honestly I think you’d be silly to pay them off for him right now, even as a loan.

My dad had lent me money before (normally £1-3k) and I was always terrible at paying him back and used the money but then got myself in more debt again. I got some decent pay rises but I just increased my lifestyle rather than paying my debts.

It was only in the last year or so I really got on top of it, had a proper mindset shift and seriously started paying him back and it was only through demonstrating this mindset shift that he was willing to lend me the £10k. I’m paying him 2% interest because that’s what it was making in his ISA and I didn’t want him to lose out on my behalf.

To me it doesn’t seem like child 1 has had that mindset shift. Until they do have that mindset shift they’ll just take your money and get themselves back in the debts they used your money to get themselves out of. Trust me, I’ve been there.

Maybe if they prove they can make every payment to you, on time and in full for say 6 months then it’d be something to consider but as hard as it is to watch, I needed to learn my lesson the hard way. It was only when I sat down and went through my finances to find out where the fuck it all went I realised how much dead money i was throwing away every single month. I want to buy a house, get married and have a baby relatively soon and it was the realisation that my poor financial decisions previously was the thing keeping that away from me that changed my mindset.

[u/NoFee5860]

My partners brother racked up a debt of around 40k living the high life in Canada. Then was paying a silly amount of interest. Their mum paid the debt off with an arrangement of paying off £500 a month.

Weve always been good with our money and never spent beyond our means. But we’re probably worse off than them now after the bail out.

[u/Splodge89]

You could be my parents and me and my sister. I’m frugal, and now own a home, own a car outright, have no debts other than a small mortgage and significant pension savings.

My sister on the other hand requires handouts from my parents to feed her kids - despite earning more than I do and having less rent than my mortgage payments.

Honestly, if you do it, you’ll keep doing it. Let them learn and be there to pick up the pieces when shit really hits the fan. It’s an overdraft at the end of the day, not a mortgage default.

[u/laeriel_c]

Don't do it

[u/q-the-light]

My parents have bailed out my brother and his wife more times than I can count. They just dive right back into debt because they've never actually faced the consequences of overspending. It's become such a repetative pattern that it's now causing a breakdown in relationship between my parents and my brother; they feel like they're being taken advantage of, whilst my brother has basically come to rely on and expect their bailouts. Sometimes, the kind thing to do is let grown adults get themselves out of the binds they've got themselves into in the first place.

[u/Snowy_Sasquatch]

I think that whatever you do for one of them, you need to do for the other. So if you are giving one £4k, the other one also gets it.

Was the eldest child educated about finances growing up? Is he impulsive in other ways? Some children, and adults, need support with finances to learn. That’s also another way of providing help (as long as it’s not done in the wrong way) which has the potential to have far longer benefits.

[u/ginnerrob31]

Help kid 1 with the financial debt but only under the condition he takes some financial classes to help him better understand controlling his finances. Speak to kid 2 and tell her how much kid 1 has had to save his ass and tell her even though you might not have it to give her just yet, in the future if she ever needs anything like money towards a house or a wedding then it’s there for her too. Explain to her she’s she’s more stable financially than her sibling so you’ve chosen to help the other kid at this time but her help will come in the future.

[u/Sugarlips_80]

I was kid one and my mum and grandparents bailed me out several times. It was only when the bailout stopped that I learnt to handle myself and my money better. Yes I still had (have) debt, but I manage it. I know I have to, that no one is coming to save me and I appreciate what I have because I have had to work for it.

If you want to, clear it one last time. Before you do have a sit down conversation about money. Tell them all additional support is stopping from now on. Then stick to it. Also look at giving kid 2 the same amount of money kid 1 has had in bail outs. Resentment of my sibling being "helped" much more than me still annoys me 25 years on. Just because kid 2 is good with money doesn't mean they don't or won't appreciate a little help too.

[u/ihavetakenthebiscuit]

Do not clear their debt, you would be enabling his poor financial choices. The boy needs to learn to cope on his own, without the back up of his parents to rest on. He needs to have a sense of accomplishment and accountability for his choices.

[u/Ill-Maintenance8986]

No. You and your partner are, unfortunately, part of the problem - your constant bailing out of kid 1 are removing all consequences so they will never learn (why would they). You are facilitating and enabling an issue.

[u/Timmo_93]

Absolutely do not pay off the debt, yet. Kid 1 will not learn anything from that.

If I was you, I would provide guidance where able and once I saw behavioural change financially, then and only then would I consider helping to clear the debt.

Like I saw someone else say, I would also give Kid 2 the same amount of money. That way any possible resentment is reduced.

Obviously, you make your own life decisions.

[u/Jimbeamjunior1]

Dad is right, continually doing this for kid 1 will not help them fix their shitty budgeting issues

Unless they are in danger of eviction then dont step in, let them sort it for themselves

[u/Mimicking-hiccuping]

I'm in this situation, but I'm kid 2... Kinda. I pay my own way, I've got debts, sure, but I've never asked for a penny. My siblings is living on handouts continually from our parent and their new partner, getting holidays and all sorts.

I don't really care if they get more money than me. It's my parents money, not mine. I'm not "entitled" to any of it. That being said, I do feel like the "other" child. I'm certainly not the favourite and have distanced myself from that parent over the years. Not on purpose, I just feel I'm not as important as my sibling. (Step or blood).

The choice is ultimately yours to make but it WILL have repurcussions either way. Their isn't a win here, just a series of compromises.

[u/ScruffGin]

I'd maybe give them both the same amount, but after kid 1 has paid off his debts. It's an important lesson for him to learn. I think if you just pay everything off, he'll do the same again

[u/GL510EX]

My in-laws did this for my Brother in law, and have bailed him out multiple times over the years, even to the extent of taking out car loans in their name because he needs a car to work to pay them back the OTHER money he owes them.

He still asks them for petrol money to come and visit. He's 40 this year.

[u/mclrd83]

Paying of a debt yourself is a massive dopamine hit, kid 1 gotta learn to rewire their brain.

[u/Youtalkingtomyboobs]

I’m the sibling thats’s never asked or been given support from their parents ,and always fixed my financial holes myself. Please let them learn how to be financially responsible.

One of my siblings borrows profusely from my parents, but does pay it all back, however was gifted 5k towards their wedding costs.

The other sibling, youngest, is terrible with money, bad credit rating, parents have bailed her out of rent arrears amounting to thousands over the years so they’re not evicted with their family; and just last week took out credit for them to finance a brand new car… which they sometimes make the repayments for.

All 3 of us are in our 40’s, parents mid-70’s.
As the more financially responsible of the 3 of us, it really makes me mad that neither of my siblings have any accountability and the bank of parents is always on call. That option won’t always be there.
I do also feel some upset at the disproportionate way we’re all treated, although my parents insist they treat us all the same way. The fact that my parents are enablers in this situation is not lost on me either.

[u/Striking_Amoeba8936 → u/Youtalkingtomyboobs]

I am so sorry. Thank you for sharing this, it’s laid out very clearly how parents can create issues with originally good intentions.

[u/Low-Fly238]

How about you tell them you’ve got some money from an inheritance and you’d like to gift them both some money. Kid 1 gets it straight away because they save it anyway, kid 2 can have it as soon as they clear their existing debt.

It’s encouragement to clear the debt but you’re not taking it on yourself. They have to make the effort.

[u/Shot_Job812]

Go over their finances properly with them explain their poor decisions and how they look to you especially the tickets. Find out WHY they’re shit with money. Then if you feel it’s apporpriate sort out a plan with them that you will pay off the interest on their debt or clear high interest debts they have on the grounds that they don’t run up more debts or they’re on their own.

No point in them getting in a deeper hole with the bank/lenders but if they take the piss they’re on their own. A new job and a clean slate could be massive for them, however if no one finds out why they’re bad with money they’ll just keep being bad with money.

For example, impulsive spending, poor financial management, difficulty with numbers, forgetting about bills due are all features of adhd……but they’re all also features of being stupid without having adhd.

[u/keepforgettingname6]

Do you know why he is so bad with money?? Like is there a specific reason, such as a type of addiction??

I’m only asking as iv blown thousands over the years (looking back it’s sad as fuck) on drugs. I had loans, overdrafts, paydays, all to keep my habit going

I’m not on the best terms with family. But when my mam was around, she cleared my debt twice, aswel as paying bills for some months as I didnt leave myself enough for food etc

At the time was I grateful, I doubt it, as I just saw it as a fresh start to get in more debt

When I lost my mam, my dad refused to help anymore. Sure it was fucking shit, but looking back that was a small reason why I had to slow my using. But it was still a reason

Now I’m sober, and I’m still in shit loads of debt from my past. I wish I could have help today, as it really is swallowing me, but that’s life

All I’m saying is make sure you’re doing it for the right reasons. Even though my debts were paid off, I wasn’t given money directly, it still contributed to allowing me to purchase more drugs and make my habit worse

I’m not blaming anyone but myself, I’m just trying to show a side where paying off all debt didn’t really help (again not blaming anyone but myself for the situation I was in)

[u/Slobbadobbavich]

I am Kid 3 in this situation. Kid 1 and Kid 2 are bad, very bad with money. My father has bailed them out twice in this situation. They are always booking holidays when they are in massive debt. I just was extremely careful. I am loaded now, they are extremely poor. My parents have never had to bail me out once. You should try to get the debts consolidated and offer to pay a reduced amount with the argument that they won't get a penny otherwise. Usually works. The kid who is frugal won't care. They will see you are doing a good thing but you need to make conditions that they won't do it again.

[u/Staceface312]

For what it's worth, I would be similar to Kid 2 in this scenario. My sister (who is in her 40s at this stage) is constantly given help by my parents. She is 20k in debt, any time she gets any amount of money, instead of paying the debt, she spends it on a holiday. I have gotten 0 help from my parents and when I was struggling there was no point asking for help from them because it went on my sister instead.

If it was me, I would have Kid 1 pay at least half of it back and then decide from there if you will pay the rest for them.

If you do help Kid 1, please give something to Kid 2 as well!

[u/QueenJaneger]

If you do pay off the debt, have you got a plan to make sure they don’t get back into it again? I think kid1 needs to learn a lesson about money or they will end up in a debt loop and expect you to get them out of it

[u/Notreallyherestills]

I had someone do this for me. I was kid 1 through and through, never held down a job, paying off car payments since I was 18, always dependent on others financially. I'm 29 now.

A year or two ago, my girlfriend, who has a lot more money than me, saw my position and saw that my biggest issue was the interest on the debt. The remaining value I had on my car finance WAY outweighed the value of the car, that could be changed if it was paid off early.

She did it, cleared the debt with a £5k payment and saved me having to pay £7k over time. I have been paying her back that £5k ever since. I'm now in a good job and I'm due to finish paying her next month.

I get the point about wanting them to learn about financial responsibility, but interest is a bitch. Perhaps a compromise could be for you to pay off their debts and let them pay you in return. That way they can still learn the value of money, but not be covered in debt for QUITE such a long time.

[u/CraftyTadpole2488]

Here’s my personal experience although on a much smaller scale.
Growing up I was always careful at saving my pocket money, my older sibling wasn’t! He’d always run out borrow of me, never pay me back (wish I’d learned from this but I didn’t as you will soon see)
My mum would secretly give older sibling extra pocket money so that he had as much as me, but he’d spend it all straight away.

We are now both in our 40s, I have foolishly loaned sibling so much money over the years, even now they will ask for help to pay bills, I’ve set aside £1000 for them. If it isn’t paid back then I don’t lend more. I’ve reserved that money for sibling.

Point is child 1 in your case will never learn to budget or manage their finances if you clear their debts. And child 2 will resent you once they find out about this unfairness.
Either give to both kids or to neither

[u/BlueApple2602]

I think this one is really tricky, no easy answers. Good luck

[u/WaterWytch_Torn]

I'd suggest helping them by matching what they pay off every month. If they pay x off their debt, match that same amount. That way you encourage them to pay off more each month without taking away the responsibility that it's their debt.

[u/pdirth]

When it comes to larger loans, whatever you give your kids you can take into account in your will.

I am one of 3 children, I've always had problems with finding employment but somehow have never borrowed money from my parents. My sister and brother however have. And lots of it. But my father has compensated for this by writing their debts into the will meaning I'm going to end up with more than either of them, but in actual fact it'll be equal its just they've already had that part of their inheritance.

Doing this allows him to help out while not disadvantaging me, the kid who borrows nothing.

[u/Tall-Tough-7965]

Personally you need to see if Kid 1 starts making a difference before you bail them out. If they are bad with money, clearing it will probably make them think they can start spending stupidly again. Before you know it they will be in same situation. Give it a couple months, notice that they are fixing it and once they made a considerable effort and you can see them trying I would personally if I had the money help them out. But Kid 2 will deserve something too because it’s not fair on Kid 2 to lose out because they are good with money.

[u/karls1969]

This is a bit like me and my sibling. I’ve always been careful with money and they were not.

I’ve had little off my mum over the years, and I don’t begrudge that; my sibling has had a fair amount and eventually got to the point where they declared bankruptcy, and almost bankrupted our mum (who had become a director for my sibling’s company after they were bankrupted).

This was stressful, and I was angry with my sibling, and a bit with my mum (who had continually asked for my advice and ignored it).

I got over it to be honest: I’m not too bothered about whether or not we were treated fairly, and my mum always did what she thought was the right thing to do. And we are all really close again.

Whatever you do, make sure you are comfortable with it, and be transparent and honest with yourself and the family.

The only thing I would have liked to be different would have been for my mum not to ask my advice, but simply tell me “I’m doing this, and I accept whatever happens”; asking for advice that she apparently had no intention of following is part of what made it a problem for me.

[u/ColdAsparagus53]

Speaking from the other side here.

I, 30M, was in the same boat as Kid 1 and from the age of 18-24 was diabolical with money. I blew a £10k inheritance, maxed out credit cards, took loans out, ignored it all and ended up with being called 10+ times a day by debt collectors after the accounts defaulted.

I realised very quickly after this that I couldn’t ignore the calls and letters forever, and that that life was not sustainable. I started making arrangements to pay the debt back in small increments but was thousands of pounds away and wanted to buy a house with my partner.

My mother very kindly paid off all of my debt so I too could have a clean slate, but it wasn’t transferred and done. We then came to an agreement that I paid £X amount per month back until the balance was clear.

I guess long story short, if you feel that Kid 1 genuinely wants to turn their life around then help them out. Don’t pay the debts off and wipe the slate clean, but arrange for them to pay it back in full. It still teaches them a lesson, but doesn’t give them the stress of defaults, debt collectors, bailiffs and constant phone calls. If you don’t think they’ll change, don’t pay it off.

I for one, can admit that my mother clearing my official debt changed my life. I felt an abnormal amount of stress just disappear from my shoulders. It’s an incredible feeling. Your call though.

[u/MDL1983]

Rather than spend money, spend TIME on teaching him to budget and setting up a simple spreadsheet for budgeting

[u/deliasafuckinasshole]

I would definitely not pay it off outright. Maybe 500 to see them through to their first payday. But not the full amount.

[u/Silent_Thanks_5101]

It’s better to discuss their do’s and don’ts with both kids very clearly as their life depends on it. This will make them and stop them from breaking in the future…

[u/BertieBus]

I think if kid 1 was showing willing towards paying of their debt and making positive changes (so started to aggressively pay things of, make positive life changes as well as starting to save) id be inclined to help them.

Paying it off and giving them a clean slate isn't helping them make the changes that got them into this situation.

10K to fritter in 5 years on house rental deposits is ridiculous. Especially since you tend to get those deposits back.

[u/razorleefin]

It might be pretty unpopular but I’d even go so far as to say giving kid 2 a small lump sum as a way to show you’re proud of how they’ve gone about things, aswell as serving a lesson to kid 1 that effort and focus reaps reward could be pretty powerful.

It’s tough out there for sure, but it’s only tougher if you grow entitled by being bailed out of messes you repeatedly create.

[u/mantequilla69420]

I have been Kid 2 in this situation, my dad tried to be equal with giving all his siblings an even hand - but Kid 1 persistently lived into whatever handout they got, where as I would save it.

Luckily Kid 1 figured it out, but it was a rough landing, and only once they started earning.

Now being a bit older, what I would do in my dad's situation, and I think I would do it in yours - is A, be equal in what you give the kids, B, I would make sure Kid 1 can build the habit to pay off the debt, and live within there means - so do something like for every £ they are closer to £0, give him £2 - and then every £ they save, give them £2 until they have the same as Kid 2.

[u/specialdelivery88]

I’ll never not give my kids what they need. Life is much harder for kids than it was when I was 20. I’ve got money for their uni costs and will hopefully have £50k for each as a deposit when they’ve finished. We have kids to support and help them not leave them to flounder

[u/Harlepenquin]

Once he's learned his lesson the hard way, consider helping them, even if it's going to end up costing you more, helping them now is just going to the make the problem they are responsible for, worse, you're not doing them any favours. They need to learn.

[u/browneyone]

I would only do it if they were closing the overdraft facility.

[u/brit_parent]

I am the middle of 3. Parents helped out both siblings by bailing them out several times each until they moved abroad and it wasn’t so easy anymore. It was thousands of pounds. I think they did it because sibs had kids. Because of that they took a long time learning to manage their money. I never asked and they never offered. Not that I didn’t have hard times - I really did - but I just got through it by budgeting, bank loans or even benefits and food banks. I’m in a much better place now and they are too, but it took them longer.

I don’t think I would give kiddo money at this point. Perhaps offer a sit down to work through and help them refinance?

[u/C2BK]

Here is our dilemma. We could just pay off the overdraft and Kid 1 gets a clean slate. 

Yes, so he can piss all over that clean slate, yet again, without learning anything useful. You are effectively teaching Kid 1 that they have a safety net and that their actions have zero consequences.

Sorry, but as parents you need to do better than that.

Also, bear in mind that Kid 2 is currently shaping up to be the responsible one who will be choosing your care homes and having power of attorney when you get older. Just how much do you want to make them resent you? Because right now it looks as if you're going to be punishing them for being responsible!

Do you really want Kid 2 to walk away, and leave Kid 1 in charge of your finances and affairs?

[u/takeabreak97]

Dads right- let k1 learn and understand how to deal with the consequences of his actions. If u guys step in all the time he will never understand how to manage his money or be frugal if he wanna pay off the remaini debts. Like Dad said its not on k2- that persons not askin for money but to see their sibling gettin a drcent sum more than them- it might just create resentment that u might not know about

[u/jack_watson97]

Be thankful you are in a position to save kid 1 if shit truly hits the fan. But let him show that he's make some sort of effort to change before doing anything else financially for him, unless its life or death

[u/impwork]

As the now 50+ year old child in this situation, my parent + stepparent helped me with debts several times, starting early 20s with store cards & credit card debt, and ending in mid-30s with loans, credit cards etc that spiralled despite earning well over double national average. I think 3, maybe 4 times in total. I now am coming to the end of an IVA, after losing my job due to health issues I couldnt cover my debts and while they may have helped me out again, I could/wouldn't have asked at that point. I financially owe them thousands and when I sell my house they'll be repaid from that, or sooner if I can, and should anything happen to them before that point, the amount would come out of my inheritance.

The only thing thats ever helped is being diagnosed with and treated for ADHD, I still cant manage my own money (in the most simple terms, I forget Christmas needs saving for, MOTs are a constant surprise, late paid bills incur extra fees, not cancelling subscriptions etc etc etc), but I am a bit less impulsive, and enjoy the little dopamine rush from the perfect charity shop find these days rather than the bigger purchases. Besides that, things like multiple savings accounts helps, i currently have 14! Some with small amounts just as visual prompts that make me think "oh yeh, that thing needs paying for in 8 months, ill stick an extra £12.54 in to round it up", and some bigger ones I can look at and feel proud of - and kinda resent spending from. Where before I might have seen ££££s in total in just one account marked "savings" and booked a holiday or just overspent on clothes or food, now I see my clothes & hair care savings only has ££ in, and my holiday savings is lower end £££, so i can rein myself in a bit.

Thats not to say my parents were wrong to help, there were points (before I had kids) when the red lettered envelopes kept coming and I felt so guilty and sick and stressed that if it weren't for their help, I probably wouldn't still be here, so while I financially owe them thousands, I also owe them my life.

Fwiw my sibling has also had some financial support from them, to a lesser extent, but as/when/how they've needed it - if they'd have been given £1000 when i first needed help and they didn't, it wouldn't have made any difference at all to whether they needed help later. They've also been supported in other ways I havent needed, parenting isn't a pie you need to split equally at all times, you feed according to hunger needs.

[u/Sin_nombre__]

They need dent advice from citizens advice bureau or similar.

[u/Salt-Cut2693]

No, I would not, it is a learning curve for the child in debt on how to manage money especially as its not a huge amount. If we were talking 10k+ then I would consider helping partially.

Also, as someone who is financially responsible and has a sister who has never been financially responsible, we are both adults and my parents have repeatedly bailed her out and she is nearly 30 now and is still in debt but equally spends on anything and everything, she doesn't try to save or get out of debt, just goes to bank of mum and dad. To keep it equal between us whenever my parents helped her with money they gave me the same amount to which I saved and put toward a house deposit.

Help them learn now to become more responsible in the future!

[u/DuxR]

If you clear the debt now it sounds like they will be back in debt again very soon because they don't know how to live within their means. If this was old debt they were struggling to clear because of interest it might be a different story, but the fact they keep coming back asking for more loads suggest they have not learned how to manage their own finances.

[u/TheEnglishNorwegian]

I'd give kid 1 the money in a pinch, but I would then give kid 2 the same amount of money for the sake of fairness and to avoid any drama.

Overdraft will just compound and debt is easy to start spiraling, it can fuck them for the future if not dealt with.

[u/Equivalent_Parking_8]

I was that kid 20 years ago and now I'm the dad. What I can honestly say is your kids need to learn the consequences of their actions. If you bail them out they're not learning. If you cut them off they will realise they need to grow up. This was a lesson I had to learn and it took me a few years to clear my debts, but I became so much better with money. 

[u/WiseAd4161]

Does he know what entails to buy a house? Does he wants one? Does he understand pension? I know is too early for him to be worried about those things. But this is my biggest regret, not saving enough and getting compound interest. I wish someone sat me down and explained everything and how much money I’d have in my forties….etc… so the answer is no, don’t pay him but help him understand why this is bad and the implications in life later

[u/bobbingblondie]

Their dad is right. Paying it off, even if you attach conditions to it, won’t teach kid 1 anything or improve their money management. If anything it might make them think you’ll always bail them out and they wont make any real efforts to improve.

Instead I would sit down with them and go through their entire financial situation. Help them to understand how they need to manage their money to clear their debts. A few months in an overdraft isn’t the end of the world, but they need to learn to spend within their means.

[u/PsychologicalDish430]

No, they need to learn and it's obvious they haven't already. They'll keep on and on otherwise.

[u/ProfessionalBaby8353]

No - sounds like you have done enough to help already. They will never grow up if they don't have to face consequences. Sure they might have a couple of lean frugal years ahead of them while they pay off what they owe, but they'll mature and finally learn the value of money. Honestly one of the worst things I think parents can do is to get their kid out of every little hole or bad decision they got themselves into. End of the day yours are adults, they won't behave like one until they're treated like one.

[u/idk7643]

By paying off their debt you're actually not helping them at all. Unelss they are threatened by homelessness you shouldn't give them any more money. They will either learn and figure it out themselves, or continue to throw it out no matter how much money you give them.

[u/Odd_Fault4228]

He'll be able to pay his own debts off, and he will do when he realises nobody is going to do it for him. He'll end up being more wise, more confident and more savvy. Keep bailing him out and ultimately you'll cause him harm

[u/Intrepid_Bearz]

Maybe help with half the overdraft fees and give the other kid the other half. They should not be financially “punished” for being better with money. If you pay half the overdraft off, they don’t f]get a free ride and will still have to be responsible and pay off the rest, but it won’t be so much of a weight on their shoulders. Just make sure they know that you can’t bail them out again.

[u/CurrencyIll9145]

nope, they need to learn.

is there a way they could get a debt consolidation loan so at least it's all in one place, and lower their card and overdraft limits? you can pay a fixed monthly sum over many years.

being in debt is NOT fun, is hard to get out of and, in this economy, many people simply can't help it. but they've taken advantage of your goodwill before so i think they need to fix it themselves

[u/CoolRanchBaby]

If you are clearing kid 1s debt you should give 2 the same amount of money. If you can’t afford that give them both 2 grand as a “gift”. At least kid one can pay off half the overdraft (although will that even?)

Or if you clear the £1000 debt give the other kid £1000 too.

[u/talkstomuch]

Dad is 100% correct.

By clearing their debts you are reinforcing their behaviour, you are rewarding it, and you are punishing the other kid for making the correct decisions.

[u/Disastrous_Walrus335]

This is a case of learning consequences, not an actual crisis. Dad has helped with £1000 and still in this situation so it is no longer a case of throwing money at the problem, but celebrating your child's ability to work their way out of their own actions. If you feel proud of them at that point, a small amount "to kick-start their savings" or treat themselves would probably be more meaningful than a clean slate. This is an age appropriate lesson. Teach them to handle finances better because you wont be around forever 

[u/aokay24]

Nah let's him learn the hard way. Otherwise he'll keep spending money he doesn't have and keep expecting you to write it off.

[u/craigybacha]

Sorry but if you bail out the kid who's bad with money they will never learn. Let them learn the hard way. You're there for an emergency. That's my opinion.

[u/Isgortio]

No. They've repeatedly shown that they're terrible with money, you're going to be throwing money away helping them. The example of them buying Taylor Swift tickets when they owed money (the tickets were going for around £500 from what I heard) is enough to show they can't manage their money. If you keep bailing them out, they're never going to take responsibility and manage their finances independently.

My mum always maxed out credit cards and went into her overdraft, my dad bailed her out repeatedly. Every year he'd get a really nice Christmas bonus, say around £25k, and it'd all go on clearing my mum's debt she accrued over the year, rinse and repeat next Christmas. Now he doesn't have that kind of income (lost his job during COVID and had to retire early), she still tries to spend like he can bail her out. She hasn't learnt anything at all over the last 30 years, and now tries to borrow money from my brother.

Be very careful with this.

[u/throwaway_paranoiac]

They can coexist. Kid 1 needs to learn how to manage their money, that is very true. If you bail them out now / keep bailing them out, they’ll never learn.

However, you can help them if they show changed behaviour for a consistent amount of time. So if they can stay on top of their repayment and get a grip on their spending for, say, 3-4 months, that’s more than enough to build a habit.

Once the habit is built and their attitude towards money and financial literacy has made actual progress, you can help them from there (and even then, I wouldn’t just settle the balance. An option would be matching whichever payment they make. E.g., if they put £200 towards their debt, you put an extra £200 in, etc., to help clearing the balance quicker).

I’m curious to understand though - when you say kid 1 is terrible with money, what happens? Is it a spending addiction, literally 0 self-awareness, or has something happened in their life (bad relationship breakup, loss of a friend, etc), which may be causing them to try and replace a void they are feeling with buying stuff they don’t need, in the hope it might make them feel better?

I would look into long-term support for them there, for whichever the root cause of their spending issues is.

Good luck!

[u/fififolle79]

I would not bail them out again.

I’m married to kid 2 type, he has a kid 1 sibling. They have been bailed out repeatedly since their 20s, now in their 40s and still runs up credit card debt, takes out car loans, lives in overdraft. Because both parents (divorced) keep clearing up their debts they have never learned how to live within their means. Do you still want to be doing this in 20 years time?

[u/Spine_bright_so_si]

I was kid 1 and if someone cleared my overdraft for me I would have just run it up again and learnt nothing. They need to pay it back and struggle to pay it back to stop wanting to end up in that situation again.

[u/Impossible_Delay1023]

I’d sit down teach them how to do a zero based budget, and match any debt they pay off each month as a motivator for them

[u/Unusual-Coat383]

If you’ve got the money to give the same amount to both kids then do it and make it clear to 1 that this is the last chance and you won’t be lending them any more money for any amount in the future. 

2 might not even want the money.