Dilemma

[Scam]

Unless she learns from this one way or another - that will just leave her thinking she can turn to dad to bail her out of her own irresponsibility in future

EDIT: I know you aren't asking for advice - but watched my sister go through this and my parents bailing her out didn't really help her in the long term until she started to take more responsibility of her own accord later in life.

Paying off the debt with premium bonds money is probably the right thing for the debt but not the right thing for her.

She needs to learn so you should make her pay it back. If she has a job and living at home with you it should not be too hard. It can easily be cleared in less than a year with a full time job.

I will 'third' the above opinions. My sister is 3 years older than me (in her mid thirties) and to this day is absolutely terrible with money to the point where she still comes to me to borrow occasionally. She hardly ever gets any though - obviously.

My parents bailed her out so many times when we were growing up it's not even funny. You absolutely need to make this her first lesson in adult financial skills. If you don't it'll haunt her for the rest of her life. By paying off the loan for her you're telling her that for the foreseeable future (until you're dead?) you'll be there to bail her out. She won't be able to shake that belief.

You need to make her contact the loans company herself, arrange a payment plan and stick to it. Considering she is working 30hrs per week, living at home and has all those premium bonds this whole situation is not a big deal at all. If you pay it off for her and try to make her pay you back, I'd guess that'll last about 4 months before you start getting excuses. Honestly, I feel quite strongly about this because if I'd have had the financial help/favours my sister had growing up I'd own my own place by now and be living the life of riley.

Unless you want to fast-forward to when she's 35 and still asking to borrow money, you need to take the correct approach now.

 

[Abyss]

I will 'third' the above opinions. My sister is 3 years older than me (in her mid thirties) and to this day is absolutely terrible with money to the point where she still comes to me to borrow occasionally. She hardly ever gets any though - obviously.

My parents bailed her out so many times when we were growing up it's not even funny. You absolutely need to make this her first lesson in adult financial skills. If you don't it'll haunt her for the rest of her life. By paying off the loan for her you're telling her that for the foreseeable future (until you're dead?) you'll be there to bail her out. She won't be able to shake that belief.

You need to make her contact the loans company herself, arrange a payment plan and stick to it. Considering she is working 30hrs per week, living at home and has all those premium bonds this whole situation is not a big deal at all. If you pay it off for her and try to make her pay you back, I'd guess that'll last about 4 months before you start getting excuses. Honestly, I feel quite strongly about this because if I'd have had the financial help/favours my sister had growing up I'd own my own place by now and be living the life of riley.

Unless you want to fast-forward to when she's 35 and still asking to borrow money, you need to take the correct approach now.

Great advice and I really hope the op follows it.

Having a payment plan with SLC is a far better approach in terms of learning life skills than being bailed out and her potentially feeling she doesn't have to pay it each month.

Living at home and having no bills means she can easily pay it back over a 12 month period.

I would however agree you need to reassess premium bonds. A help to buy ISA will put far more money towards a house. Transfer £12k at £200 per month into a help to buy ISA and that £12k will become £15k.

 

[kinetic747]

I've told my wife and we've come up with a plan. We will clear the majority of the debt with some of the premium bonds money leaving £1000 for her to pay back at £100 per month. We've told my daughter to pay the money back into the premium bonds, also at £100 per month. If she gets extra hours or a full time job then she will try to pay it back at a faster rate. She has further investments that fortunately she does not have access to and it will remain that way until it goes into bricks and mortar. Thank you all for the advice, it means a lot even if we haven't actually followed most of it. The main thing is we have agreed on a course of action.

 

[Cleisthenes]

Good job telling the wife, that was the most important bit!

 

[subbytna]

Tell your wife!

Your daughter need to realise that the real world isn't all smiley faces and blue thumb facebook likes. She needs to be accountable for what she did without putting your marriage under pressure from lies.

 

[subbytna]

...just seen you told her. Good.

 

[Lima]

I've decided to let her pay off a large chunk using premium bonds that her grandad has accumulated for her but keep this information from my wife. She has over £15000 in premium bonds

She is a 22 year old adult..... you shouldn't be deciding to let her or 'give her permission' to use what is essentially her money/ savings.

You also mention later in this thread she has other investments and she's not allowed access to them? Are they hers or not?

Don't mean to be mean but this thread is odd.

Relatively small debt causing massive family panic

Daughter is an adult and has a job

Daughter has premium bonds savings and also investments that her dad won't let her access as if she were a child / under 16 or 18.

 

[Scam]

To be brutally honest. A 22 year old with 15k in PBs and more in "other investments" sounds like she will need a lesson taught about money more than most. No offence intended, but if she's going to end up with a house deposit before the ripe age of 30 without really saving it herself, and without learning about the world of money -- then she's going to have problems in the future.

Just trying to underline my earlier point.

 

[dowie]

I've told my wife and we've come up with a plan. We will clear the majority of the debt with some of the premium bonds money leaving £1000 for her to pay back at £100 per month. We've told my daughter to pay the money back into the premium bonds, also at £100 per month.

that sounds pretty cool in principle, not wanting to nit pick too much but premium bonds are a fairly naff investment, might be better off getting her to pay back the amount it cost into another investment... also if she's going to be paying back the full amount at £100 a month then why not pay off the whole loan in one go - I don't see the logic in leaving £1000 of it, presumably it is incurring interest at a great amount than the premium bonds are expected to earn.

IMO right idea but pay off the whole loan and get her to dump 100 a month into building up a small stock portfolio or some tracker fund or some investment other than premium bonds

 

[kinetic747]

She is a 22 year old adult..... you shouldn't be deciding to let her or 'give her permission' to use what is essentially her money/ savings.

You also mention later in this thread she has other investments and she's not allowed access to them? Are they hers or not?

Don't mean to be mean but this thread is odd.

Relatively small debt causing massive family panic

Daughter is an adult and has a job

Daughter has premium bonds savings and also investments that her dad won't let her access as if she were a child / under 16 or 18.

It's complicated but I agree it does sound odd. The money she has invested was given to her exclusively by my father-in-law. He has always insisted the money was to be used wisely but obviously she is now an adult and the money is legally hers. My daughter knows the sum of money involved but has never mentioned using it until now. That is why she was so upset, she knows that the money isn't being used for its original purpose.

 

[kinetic747]

that sounds pretty cool in principle, not wanting to nit pick too much but premium bonds are a fairly naff investment, might be better off getting her to pay back the amount it cost into another investment... also if she's going to be paying back the full amount at £100 a month then why not pay off the whole loan in one go - I don't see the logic in leaving £1000 of it, presumably it is incurring interest at a great amount than the premium bonds are expected to earn.

IMO right idea but pay off the whole loan and get her to dump 100 a month into building up a small stock portfolio or some tracker fund or some investment other than premium bonds

I know what you're saying makes sense, we'll think it over, thanks.

 

[Destination]

Aye if the bonds were from someone else, naff investment or not, i would recoup their amount to full, just on principle. Then choose to invest otherwise, good idea telling your wife.
Plan seems sound.