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The talk...

October 1st, 2015 at 01:00 pm

I couldn't sleep. I am waiting for my son to wake up so that I can have the talk with him before he leaves for work at 7:30 am pacific.

My son will be 20 in 30 days (Halloween baby in the house!) And so far, so good. He has saved $1000 dollars in the last 45 days. He is pretty much set with his Emergency Fund. His job has changed slightly - he does piece work with no salary now (he had salary before, which made it possible to save that much money in that short amount of time).

So, $1000 in savings and $800 in debt.

He has a Kay Jewelers card with a balance of $500 and a USAA CC with a balance of $300ish.

I currently pay his $100 a month auto insurance bill (explained this in a previous post - he does a lot of the heavy driving for me, getting his sister to school, etc).

His phone bill is part of our family plan and costs me $15 a month.

Other than that, he has the Kay bill at $25 a month and the USAA bill at $25 a month.

I am of the mind that he should pay off the debt, then rebuild his savings. He's proven that he can hustle (in the most white, suburban way possible), and can save when needed... so I am not concerned with him being able to rebuild his emergency fund. In fact, I kind of feel like I'm still his emergency fund for now. He hasn't had any emergencies; he just replaced all four tires on his truck, his truck is paid for, his registration is set for the next two years, he's under my medical still... So, I don't see a reason for him NOT to pay off those cards.

I think he can completely do away with Kay, but keep the USAA card to continue to build his credit.

Now I just have to convince him. He's holding on tight to that savings account... Which makes me proud; it means he understands the value of paying himself first. But at the same time, he needs to get rid of the debt.

So... that's first on the docket this morning. I'll let you know how it goes!

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Updated to Add:
We had the TALK! And it went well. So well, that I didn't realize his balances were lower than they actually were and he paid both accounts off, while in bed, with me perching next to him. (Hmmm. Maybe he just wanted to get me out of his room?). After both accounts being paid off, he still has $500 in savings. NOT BAD!!

6 Responses to “The talk...”

  1. PatientSaver Says:

    I agree with you about the debt. He may not understand how quickly credit card debt can escalate out of control due to interest and late payment fees. When you talk to him, you should show him one of those charts that shows how many years it takes to pay off a modest debt if you only make the minimum payments. I think this would be very compelling, especially when you point out the very very high interest rate he's likely facing, like 17% or something in that range.

    http://www.creditcards.com/calculators/minimum-payment.php

  2. creditcardfree Says:

    I would guess that Kay card has a very high interest rate, too. Good luck, and I agree, you are likely a sub emergency fund at this point. I made my daughter save at least $500 for emergencies before she left for college. I think she had over $1000!

  3. Elle [is for Lemon] Says:

    Patient Saver and CreditCardFree - I've updated my post. He paid off both accounts! Agree about Kay... His USAA card (I thought it was Cap 1, forgot it was USAA) is much better with only a $300 line. I told him to use it for gas 2x a month, and pay in full, no matter what. And not to use it for anything else. We, personally, do not have any credit cards. We use cash or debit. But we have years on him...

    Thanks for the advice and comments!! Big Grin Big Grin

  4. Livingalmostlarge Says:

    Aww. Another halloween baby. Glad you are being open and honest and telling him how money works.

  5. FrugalTexan75 Says:

    That''s great that your son listened and followed your advice!

  6. rob62521 Says:

    Glad you talk went OK -- I bet he realized you knew what you were doing and followed your advice. Bravo!

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