Sister committing financial kamikaze-Advice/Resources/Suggestions sought-Credit Cards / Travel / Young Dumb & In Love????

save my dollarydoos on 12/04/2016 - 23:00
Last edited 12/04/2016 - 23:06

Hi guys and girls - wasn't quite sure of the appropriate forum to put this in but here goes.

Some context:

My much younger sister and her bf split up. Furniture was split up and distributed to friends etc, sister got the dog and the flat screen and ended back up at the parents house. After a several months apart. They are back togethe …. kinda…. I think?

My sis recently had a car accident, generally doesn't have money , feeling like a burden with her horse of a dog inconveniencing mum & dad now. She feels like shes suffering depression. Counselor agrees apparently. Not sure what she said exactly. But the sister feels she needs a break from it all….

As the bf has decided to go to Europe during their time apart - the sister has decided to go with him and experience all the fun he had planned/saved up for ages.

Her problem? No Savings!
Her solution? Credit Cards!

She earns $1400 odd a fortnight, and already $20k odd in debt in a car loan for a vehicle whose rapid depreciation is ensured due to a seemingly annual tradition of pranging it.

She has already been approved for $6k - for this http://www.nab.com.au/personal/banking/credit-cards/nab-prem…. She is looking at (and nearly maxing this out) on her flights / contiki tour and excess to get her vehicle back on the road.

She's also looking at another credit card to ensure she has some spending money (If she doesn't save enough until she leaves in 8 weeks time) So there's cash advances / international purchases etc.

I didn't try to dissuade her from doing it. There's no point. I simply pointed out the level of debt she would be in and while the trip would be amazing, 4 weeks on that kind of holiday will go by quickly and the circumstances shes trying to get away from will be waiting for her to get back. And she accepts this…

I guess I don't know what I am asking for exactly. I guess links / resources / advice from anyone with a black belt in travelling cheaply or perhaps ideas on how to minimise the interest. I guess both and anything perhaps I haven't thought of.

I'm all ears.

Financial

Comments

  • mmd on 13/04/2016 - 01:55
    +12

    She sounds like a recipe for disaster. Get her an ozbargain membership ASAP!!!
    Things that will cost people money:
    Car loans, pets (loveable but unfortunately very expensive), paying rent (why not live at home to save?), and credit card debt.

    I hope (for her and your family's sake) that she goes with travel insurance. I would hate to end up in a non-reciprocal country and pay the hospital bills which could run into the thousands!

    It's all about common sense and being smart with your money, and minimise most if not all expenditure.
    She can start with her credit cards and use 28 degrees/ Bankwest Platinum (check out this forum
    You/r family could enforce kindly suggest her to choose the lowest amount of credit possible. She is not the type that saves and TBH 6k is just asking for trouble.

    The most practical thing is to NOT go (minimise expenditure), but then I assume she will feel insecure with her bf going on contiki by himself.
    Then again she could possibly leech off her bf? or she could get a second job for additional income?

    How is she going to pay her car loan and credit card bills when she comes back? Credit cards are great now but wait 55 days for the 20% interest to hit her.

    Maybe its because I'm getting older and more cyanical, but if you cant reason with these ppl, you'll just have to sit back and watch them make mistakes.

    • holdenmg on 13/04/2016 - 03:38
      +3

      You don't even need to wait 55 days on Cash Advances for clock to start…

    • Randxyz123 on 13/04/2016 - 12:56
      +4

      pets (loveable but unfortunately very expensive),

      What is with the attitude that pets are really really expensive? They just aren't.

      Food is like $100 every couple of months

      Vet is $150 a year for injections/checkups.

      Some of you probably don't understand the joy of having a dog or even a cat.

      I do kinda agree you shouldn't get a dog or a pet with your partner of under say 5 years because if you do break up it is awkward.

      • RyanMK on 13/04/2016 - 13:03
        +1

        I agree with the general sentiment that pets aren't expensive (I have a pet dog myself).

        I guess it can get expensive if you have a large dog, say a Great Dane. Larger dogs do tend to have more medical issues, not to mention they go through a lot more food.

        • Randxyz123 on 13/04/2016 - 14:09
          +1

          I have a golden retriever she isn't exactly small!!

          Food consumption well https://youtu.be/5iTTNRE-njM?t=50s sums it up pretty freaking well.

          Anyway my point is that they aren't that expensive which is kinda off topic but also on topic in that she should make sure she can afford to keep feeding the dog and have someone look after it when she is in Europe.

        • mmd on 13/04/2016 - 23:43
          +2

          @knick007:

          Depending on your luck, but if you end up with a pet with a disease/disorder then thats additional costs, on top of food, vet checks, and grooming.
          If they break a leg, you'll be looking at a huge medical bill which won't subsidised.
          We have a dog and she's been healthy so far (touch wood), but our friend's pup broke it's leg jumping off the couch.

          In this specific case, it is unwise to own a pet due to its outgoing costs and the sister's financial issues.

  • gomertose on 13/04/2016 - 02:16
    +18

    Tell her to ditch her bf and get a sugar daddy.

    • eatwell365 on 13/04/2016 - 06:21

      looking good only if good looking.

      any good?

      • airzone on 13/04/2016 - 10:05
        +4

        Required attractiveness is inversely proportional to bank balance

  • holdenmg on 13/04/2016 - 03:36
    +2

    Does she even need a Car?

    Then there is the Insurance and Excess, Petrol, Servicing, Crash Repairs, Rego etc.

    Maybe sell it and then she isn't forever servicing a Loan on a depreciating
    mobile disaster.

  • Ughhh on 13/04/2016 - 04:50
    +1

    What does the bf think about digging this hole for herself?

    I think one of the problems these days is having the mentality that "that's tomorrows problem"

    • eatwell365 on 13/04/2016 - 06:22
      +1

      mentality that "that's parents' problem"?

      parents are getting smarter these days.

  • eatwell365 on 13/04/2016 - 06:35
    +1

    enjoy jokes from me - for now.

    seriously I would do if in your shoes:

    1. ask your sis "R U OK?"
    2. tell her " I love you. We will be with you no matter what."
      3 "that she is a responsible person, and she may have already understood she will be responsible for her action"
    3. "if she needs advice because she is confused at the moment. You cannot help but someone may. and you will help to find that person/s together with her."

    When she keeps applying cc and max out in relative short period of time, she will hit a dead wall soon and cc application will get rejected.

    Consolidate all her credit card debts to Citibank Ready Credit with lower interest rate.

    She may claim insanity to make Credit Card Application for leniency, but think banks are pretty much protected with the T&C.

    But this is her problem. Don't make this yours or your parents.

    • whooah1979 on 13/04/2016 - 06:49
      +4

      you need to literally slap some sense into her. Maybe she'll snap out of her depression.

      you're saying that op should tune up his sister and that'll cure her depression?

  • tassieeagle on 13/04/2016 - 07:36
    +3

    There's some really crappy opinions about depression in this thread, obviously some of you have never experienced it or you wouldn't be making fun of it or making stupid suggestions like "slap it out of her". She obviously needs help both financially and emotionally and should be directed to professional help in both areas.
    Grow up, depression ain't no joke.

    • juventino on 13/04/2016 - 07:50
      +9

      kids these days use the word 'depression' and 'love' like drinking water.

      depressed people won't have time to think about getting a four week holiday with no money whatsoever.

      She's just young and perhaps a bit frustrated and or stressed out. Big difference between that and being depressed.

      • blitz on 13/04/2016 - 08:58
        +2

        depressed people won't have time to think about getting a four week holiday with no money whatsoever.

        Are you medically qualified to make such a diagnosis?

        • [Deactivated] on 13/04/2016 - 10:25
          +7

          juventino might not be, but I asked Dr Pepper and Dr Dre and they both agreed

  • the-mal on 13/04/2016 - 07:38
    +2

    You can lead a horse to water…

    Good luck, hope your sister sees sense. Remember, young people know it all and are invincible. Many young uns spend their later 20s paying the debt of their former stupid self.

    Most of us grow out of it, but boy is it frustrating to watch others go through it!

  • [Deactivated] on 13/04/2016 - 08:18
    +3

    She'll hardly get taxed on earnings that low - about $620 per week stays in her pocket. If she's living with parents (presumably rent free) what is she spending her money on? Car I'm guessing will be roughly $250 pw for loan repayment and running costs) leaving $370 which is still a lot of money if it's all disposable.

    I think you're doing the right thing not prohibiting her from doing anything - at the end of the day she's an adult who needs to take responsibility for her own decisions. But spend some time with her and draw up a budget of the trip costs and work out how much she'll need for the trip and how long it will take her to pay off all those cards including interest, and it may open her eyes to the opportunity costs.

  • PJC on 13/04/2016 - 08:42
    +3

    The boyfriend is not in love.

  • shaybisc on 13/04/2016 - 09:00
    +3

    Thank god I was never stupid enough to get a dog with a lover. Why do people do that? Is it a practice baby?

  • Islund on 13/04/2016 - 09:12
    +1

    Get a new sister? :o)

  • inherentchoice on 13/04/2016 - 09:22

    Your sister is being fiscally foolish but I think you don't need to worry about it so much.

    Probably can't talk her out of Europe now, just let her go and then when she gets back hopefully you (and others) can try help her to find the best way to pay down the debt. Maybe she can start with one of those balance transfers with an interest free period?

    The credit card statements nowdays have clearly printed information on them about how much you would be paying if you only paid off the minimum each month versus a higher amount.

  • BuyoTheCat on 13/04/2016 - 10:17
    +3

    I would draw up a list of potential situation she could get into. Think the worse case scenarios. Plan for the worse, hope for the best. It aint all sunshine and lollipops in life.

    If she is depress, this will hard to TELL her what she should do. She needs to come to the conclusion herself. Generally, clinically depressed people find it hard to see beyond today and they are constantly looking for external ways to make them "happy". You need to present information for her to help her see the possible outcomes of their choice.

    It is possible that such a trip won't break her bank that badly. However it could help her see that trying to live on $100 a week in a foreign country is not as attractive as it looks. it can also help her work out a plan for what she wants to do when she gets back.

    Be supportive, not judgmental. Good luck buddy.

  • shaybisc on 13/04/2016 - 10:46
    +1

    Is she going to quit her job or does she have some kind of leave to go on the holiday?

  • freemoneyhunter on 13/04/2016 - 11:11
    +1

    I think the best course of action is to simply max out all her available credit, go on the holiday and when she comes back just default on the debt and give the creditors the car. Good solution right? :) Good thing too nobody will lend her money again for a few years so she will will then have to be responsible.

  • mskeggs on 13/04/2016 - 11:16
    +2

    Kind of surprised at some of the reactions here with slaps recommended or OMG EMERGENCY MEASURES.
    Her actions fall very much in the mainstream financial approach of the average 23yro in Australia. These are the people that are funding the dividends on your bank shares and keeping Flight Centre in business. This is, sadly I think, just normal.
    Yeah, it is poor financial planning, but she is effectively insured from disaster because she can rely on the support of her family.
    My suggestion would be to ask her to consider future approaches that get her what she wants in smarter ways.
    This might be a cheap second hand car, taking a working holiday trip to the UK, building up a pool of savings against unexpected problems or opportunities, looking for ways to grow her income via study or promotion.
    As for her mental health, we obviously cannot judge, and a counsellor is much better positioned, but being depressed over a sad event like a break up is different to being clinically depressed, and a trip might be a good cure for the first. A trip might also give her a chance to reassess her relationship, good or bad.

    FWIW, my little sister was a tear away in her late teens and early twenties, but she is now settled down, we get on great, and while she doesn't have a lot of cash, she lives a low cost lifestyle so she is very happy. It is pretty likely your sister will grow up to understand financial realities too.

    • qazwsx on 16/04/2016 - 00:30
      +1

      "Her actions fall very much in the mainstream financial approach of the average 23yro in Australia."

      The lowest common denominator achievement award for falling standards of mediocrity.
      Because everyone else is doing it, it's ok right? Such a bs way to justify the things that you want when you actually can't.

  • Randxyz123 on 13/04/2016 - 12:49
    +2

    So there's cash advances

    Tell her NOT to do this… Cash advances are only for SERIOUS emergency circumstances…

    Apart from that she should be ok.

    When she gets back to Australia unless your parents have a big problem with it she can continue to live at home repay her debt and move on.

    Maybe she can sell her $20K car for a older , cheaper one? That way she might have some spending money?

  • samprofs on 13/04/2016 - 19:11

    Cash advance as already mentioned will be charged from DAY ONE. Maybe something like ME BANK FRANK credit card is a better option. 55 days interest free and cash advance is 9.99% p.a. Quite a bit cheaper.

    Biggest problem of current generation her age is that they have never had any hardships/recessions and they feel like this money never has to be paid back.

  • shaybisc on 14/04/2016 - 09:49

    Lose the car.Walking will do her good.

  • bluedufflecoat on 14/04/2016 - 10:02
    +1

    Make sure she gets a local SIM when travelling - don't get hit by international roaming fees unexpectedly. I've found that buying a local one is still a lot cheaper than the $5/day offered by Voda or $10/day offered by Optus. As an example, was in Malaysia for 2 weeks, spent RM50 on a local sim / top ups - comes up to less than $20. Lots of data etc. Your previous whatsapp number etc would still work with the new sim.

  • bluedufflecoat on 14/04/2016 - 10:03
    +1

    Don't forget travel insurance.

  • [Deactivated] on 14/04/2016 - 17:24

    How about a Cheap fight to Bali/Thailand, travel insurance and some condoms to help get that travel bug/bf out of her system. You never go travelling with an ex.

    • captobvious on 14/04/2016 - 19:28
      +1

      Bali/thailand vs europe. No deal.

  • stevensx on 14/04/2016 - 17:28
    +3

    Experience during my travels:

    So a few years ago I did work in a factory, usually night shifts. Expected young people to be working there (uni students etc.) and to my surprise there were lots of older men and women. After getting close to a couple I found out that they did their day job 9-5 and then came to the factory straight from work to begin a 6-10 shift. I asked why and of course it was due to a crazy debt accumulated in their 20s and interest that got out of hand. Talk about paying off a never ending debt; these poor people were in their 40s 50s and 60s. Saddest bit is that they missed out on spending time with their kids at night :/

  • Dr Techno on 14/04/2016 - 21:10

    Soemtimes its hard to tell someone that they are doing silly, until they learn themselves from first hand experience (hopefully). Just try to minimise damage..

  • SteatoLegato on 14/04/2016 - 22:31

    this thread is useless without pics

  • drfuzzy on 14/04/2016 - 22:33

    How old is she?
    If she is 19 then this is part of growing up
    If she is 29 then I hold little hope

    • save my dollarydoos on 15/04/2016 - 15:59

      Closer to 19 than 29

    • [Deactivated] on 23/04/2016 - 18:16

      I wish I could have racked up a 30k debt, come out okay with no permanent harm to my life all while learning the lesson as part of my growing up.

  • a2swin on 14/04/2016 - 23:08

    I guess your sister is not even 21 but I agree with her on taking the trip. Hell yeah you only live once. You can live slow, paying bills and again die slowly. Or you can enjoy a month of joys and there's no money can buy you Europe experiences. Sooner or later she will grow up, this is the lesson she needs. I remembered 5 years ago when I really wanted to go to singapore i did work as a cleaner for 3 months, as much as i hate the job the singapore memories are unforgettable. i would hate myself if i didnt go because right now when i have a baby, i cant even go to movie.

    • velleyy on 14/04/2016 - 23:57
      +2

      Difference between being that you're actually working to pay for your trip.

      She's taking out a loan when she's already in debt to go on a trip to feel good, to come back to an even worse situation.

  • velleyy on 15/04/2016 - 00:02

    If she's really under depression, it's a good idea to go on a trip. Depression is a really scary thing.

    But I'm not sure if she is from what you said OP. Maybe it's just me, but taking a loan just to enjoy life seems to be the wrong approach. If anything, the good time spent overseas, will only make it worse when she came back to the grim reality of being close to 30k in debt? Then it would make her even more depress, and probably an even longer time to get out of it.

    Yes, maybe years later she will regret that she didn't go on this trip. Or you know, she could be regretting that she did.

  • Handsoff on 15/04/2016 - 00:52
    +3

    She needs to completely sack her BF. A boyfriend that allows her to make these type of financial decisions is 1. not very wise himself, 2. only cares about himself, 3. there for the short term.

    When she comes back to face 30k debt and he realises that she's a financial burden at such a young age (no freedom to enjoy daily/weekly activities) he's going to be out the door before you know it.

  • TheMatrix on 15/04/2016 - 06:58

    I agree with most of the post above that it us unwise to take out a credit card loan to go on holiday etc, however, as a last resort she can declare bankruptcy when she come back.

  • Peck on 15/04/2016 - 09:28

    Sadly, if they broke up once, then, in all likelihood, they will break up again. That lesson, and the financial lesson will be painful ones, but they will be the lessons best remembered. It is almost impossible to save people from themselves.
    If she is clinically depressed, then encourage her to put decisions on hold until medication kicks in and levels out (usually takes 6 weeks to be certain). A counseller will help too, both for the depression & financial planning/control. A referral from her GP with a treatment plan will get her counselling most of the cost of which will be covered by medicare.

  • save my dollarydoos on 15/04/2016 - 15:59

    Thanks for the help everyone.

    A lot of you are confirming what I said and have reiterated to her. I'm tempted to send her the link to this thread but think a summary of all this from me might be better

    • mmd on 22/04/2016 - 01:08

      It might be better for her to read this as she will see multiple replies from randoms offering sensible advice.

  • [Deactivated] on 23/04/2016 - 18:13

    Probably from the same group of people who complain that the cost of living is too high.

    Not qualified to comment/diagnose but as far as I know, sadness and depression is different.
    (Unfortunately for those who are less vulnerable to getting depression, it is less likely that you will get the chance to be in the morally dominant position of claiming that you have depression.)

    Tell your sister "I hope you have some way of paying all that money back eventually because you will have to be responsible for your debt" Date and Sign as an early i-told-you-so.

    I predict that "Help-I-can't-cope-because-of-things-beyond-my-control" will happen.

  • maximum on 25/04/2016 - 13:36

    As someone who has witnessed a contiki bus break up I can assure you this will not end well. Travel together can place stress on even strong relationships add in an only recent reconciliation , no money and obviously the fact he thought he was going solo - what is going to happen when they break up 2 days into a four week tour - awkward.
    If she needs a break and she is young what about camp counselling in USA. http://www.ccusa.com.au/PROGRAMS/Camp-Counselors-USA. Looks interesting something to look forward to and save for - a break from the everyday but meals and accomodation paid.

    That being said sometimes you have to let them make their own mistakes. My brother bounced from bad relationships , financial decisions etc for ages and still came out on the other side - I can't tell you the nights of sleep I have lost (funny enough I don't think he ever worried) but it didn't make any difference. I think my tightarse ways are better than his high roller ways but I'm sure he looks at my lifestyle just as disapprovingly. Good luck.

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