Tuesday, February 8, 2011

Advice from a parent to an adult child on debt

As a caring parent, I am willing to help you make the payments on all your debts that I or your mother are co-signers on until you and your wife are in a position to do it on time yourselves.

I will agree to this under these conditions:
• You pay a full tithe.
• You live a thrifty lifestyle.
• You work on finishing your formal education.
• You completely reject incurring new debt on new or existing accounts including pre-paid credit cards.
• You pay all your current debts and obligations that have no cosigner.
• You send me what you can after paying your normal living expenses and making payments on debts that I and your mother are not a cosigner on.
• The word "you" includes each member of your family.

If you agree to these conditions, make up the difference to ensure the debts which we co-signed are paid on time.

I hope you understand that you are in your current financial situation primarily because you have used debt to live a lifestyle far beyond your income. Just like the government's wild spending, it is not sustainable and the debt always catches up and overwhelms. Blaming your situation on the lenders or on the economy will never solve your problem. Taking ownership of the problem is the first step in fixing it.

In the past, we have repeatedly helped you consolidate and pay your bills only to see you pile up new debt. For your family's own welfare, that cycle needs to stop. You have reached a condition similar to what is called critical mass in nuclear physics -- when sufficient uranium or plutonium (ie debt) is accumulated to result in uncontrolled fission and a nuclear detonation.

I will soon retire and my income will drop precipitously. Your mother and I are struggling to be debt-free ourselves by then so we can live on the reduced income. We will no longer have the resources to bail you out.

But, more importantly, you need to become independent and self-reliant. We'll help you as much as we can if we can see that our help is getting you to the point of independence. That's our job -- up to a point. But, as long as you are dependent on anyone other than God, especially on parents or the government, you give up your sovereignty to that person or entity (meaning you are not self-governing and that person or entity has power over you).

When you become sovereign, nobody needs to nag you about your decisions nor do they have the right to do so. Your older brother, for example, has been sovereign since he left home to serve a mission. We will always give him advice when asked (that will always be the role of a parent -- including our Heavenly Father, but in his case, it's very rare he asks us for counsel). We see no need to give him unsolicited counsel because we see him consistently make good decisions on his own. The sooner you get there, the happier and freer you and and your wife will be.

Church leaders consistently urge us to get out of debt and stay out of debt. That is what I'm working to do. If family members will use some good judgement regarding debt so that we don't have to constantly bail them out, our entire family will be fine no matter how bad the economy gets. It is debt -- not the ups and downs of the economy -- that destroys our resilience and self-reliance.

Provident Living

Christian Financial Concepts

Clark Howard Financial Tips

Dave Ramsey Financial Counseling

Suze Orman on Managing Debt

Cost of Paying the Minimum

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