Barefoot Investor Scott Pape’s tough advice for couple after son’s shock act with their $30,000 loan

The Barefoot Investor has advised a couple to never again loan their son money after their child squandered $30,000 intended to help with a deposit for a home. 

A distraught mum wrote to finance guru Scott Pape explaining her family’s financial predicament. 

She explained her and her husband had loaned their son and his partner, who have two small children, $30,000 to be used towards a deposit on a house. 

‘We explained to them that we were not well off, that we were still paying off our own mortgage, that the money was to help them secure a home, and that they could eventually pay us back using their own house as collateral,’ she wrote in a column for the Daily Telegraph. 

However, the young couple squandered the loan, with the mum unaware of what they spent the money on.

‘My son is very remorseful, though his partner not so much. So no house and $30,000 gone,’ the mum wrote. 

The issue has since driven a wedge between the family, with the parents’ marriage suffering and their relationship with their son damaged. 

The mum explained her husband wants their son to ‘be accountable and pay it back’, however she feels inclined to ‘write off the loan as a gift’ so they can restore their relationship. 

The mother explained her and her husband had loaned their son and his partner, who have two small children, $30,000 to be used towards a deposit on a house (stock image)

‘Hubs says a firm no. So, should we forgive and forget, or make them scrimp and save to pay it back over countless years?’ the woman wrote. 

In his reply to the ‘loving mum’, Mr Pape said he felt for the pair’s predicament as their efforts to help their son had strained their marriage and cost them $30,000. 

Mr Pape advised the couple to sit down and talk about the situation, claiming it was time for the pair to put themselves first. 

‘After all, this is clearly eating you both up inside (a lot more than it is your son, or he’d be paying it off!),’ he said.

He then suggested it was best for the pair to ‘forgive the loan and move on’, but to never loan their son any more money.  

‘I would also suggest to your hubby that the quickest way to get rid of this ugly angry feeling is to forgive the loan and move on – not for your son’s sake, but for yours,’ Mr Pape wrote. 

‘After all, you’re still grandparents to his kids, and he’s still your son. But never, ever loan him another cent.’