What to do if your children are in debt

If your children are struggling, it's natural to want to help them. But rather than throw money at the problem, what other things can you do to help them get out of debt?

We recently carried out research that found that 42% of under 25s approaching us for advice were unemployed. With jobs so hard to come by, it’s easy to understand why many of the younger generation struggle to keep on top of their finances.

After years of bringing up your children it’s scary when they go out into the world on their own. No matter what their age, they’re still your kids and it’s natural that you want to look out for them. So how can you help your child if they’ve got into debt?

Don’t throw money at the problem

This might sound like a strange piece of advice. Surely giving money to your children is a great way to help with their money problems, right? Well, it’s not usually that straightforward.

Often paying off debts on behalf of children doesn’t address the real issue. If the debts came about because of poor money management then a cash gift could lead to a vicious cycle of continuing bailouts. So if giving your kids money doesn’t always help, what else can you do?

Help them plan a budget

Sitting down with your child and helping them plan out an income and expenditure budget could be the most valuable piece of financial help you can ever give them.
It doesn’t have to be anything fancy, just one list of all the money coming in and another of all the money going out, and then review. We’ve got a useful article on our MoneyAware blog that talks through how to plan a budget and stick to it.

Encourage them to cut back

OK, so you might think that your kids didn’t listen to you much when they were little, so why would they start now? However, it’s fair to say that your children are likely to respect your advice and even if they might not show it, they’re likely to take your suggestions on board.

After you’ve planned a budget you can work through the outgoings and see what’s essential and what can be cut back on. While opinions might differ on what’s an essential cost, encourage them to reduce everything that they can without being too drastic.

Your children will be better placed to deal with their debts if their expenses are kept to just the most important costs (with perhaps a small allowance for entertainment).

Teach them some of your old recipes

My idea of cooking when I was in my early twenties usually involved poking holes in cellophane and shoving a plastic tray in the microwave. If you’ve got kids with a similar outlook then they might benefit from your experience.

With a bit of parental guidance your offspring will be able to cook meals for themselves that work out much cheaper than the ready-made alternatives. It’s easy to think that anyone can knock together a spaghetti bolognese, but everyone has to learn somewhere.

Suggest they get professional debt help

The tips above might be enough to help your children to straighten out their finances and manage their debts. For many it might not be enough though, and that’s when it’s worth getting some free and impartial debt help.

Taking the first steps towards getting debt help can be very scary, so some gentle encouragement from you might just be enough to nudge your son or daughter towards getting the help they need.

We have an online service called Debt Remedy, which can help your children make sense of their finances and explain all the available debt solutions. If they’d prefer to talk to someone then they could give our helpline a call and talk to an advisor.

It’s also worth mentioning that we regularly speak to parents who call on behalf of their children. This could be another way that you could help your children, if the prospect of taking the first step is just too scary for them.

If you’ve got any more suggestions for how parents can help their children with their debts then please pop a comment below.

More on debt:

Where to get free debt advice

Demand for debt help rockets

Debt schemes that prey on those in need of help

Kerry Katona: the latest celeb to flog a dodgy financial product

Bankruptcy: handing back the keys to your home

Huge rise in number of women going bankrupt