DEAR SOMEONE ELSE’S MOM: Our youngest son still lives at home. He pays us rent, usually within a week of when it is due. He is also good about helping out with incidental expenses around the house, especially if it has to do with the apartment we made in our basement, first for his older siblings, and which he now uses.
He is a good and generally responsible young man. He makes okay money, and has even managed to put a little away in a savings account he started back when he was in high school.
What worries me, and he just does not seem to comprehend why, is that because he doesn’t have good bill paying habits, his credit score is not what it should be. As a matter of fact, it has gone down nearly 70 points in the past two months because of missed or late payments.
My ex-husband, our son’s girlfriend, and I have all offered to help him figure out how to stay on top of his bills. He refuses to set-up automatic on-line payments, which I can kind of see, because he works for a modest base pay and quarterly commissions, which are usually good money and make up the bulk of his income. However, the commissions can post anywhere in the payout month, and he doesn’t want anything to bounce if the payment comes due before the commission is deposited and clears.
He and his girlfriend are starting to talk about buying a place of their own, and since she is working fulltime on her masters, she can only work parttime, and has never yet been in a situation to build decent credit on her own.
What arguments can you suggest to help get my son on track with his bill paying before he attempts to buy a house? We are out of ideas. --- HAVEN’T GOT THE ANSWER
DEAR HAVEN’T GOT THE ANSWER: From what you said, it sounds like at least part of your son’s bill paying troubles stem from a cashflow situation over which he has little to no control.
One thing he might do is to put some of his savings into his regular checking account to boost its balance, and then immediately replace that amount with his bonus payments when they come through.
That’s just one idea, and since neither I nor any of the people currently advising him are experts in this field, he should consider sitting down with someone more knowledgeable in financial management to see what strategies can be offered to help him stay on top of his cash flow issues.
If your son has his money in a brick-and-mortar bank, perhaps he could make an appointment to speak with one of the bank’s customer service representatives to get better, more specific direction in managing his finances both now and in the future, especially if he’s considering applying for a mortgage.