Jerk that little blackmailers leash and jerk it hard.
One does not EVER EVER EVER give in to blackmail.
Sit the entitled little madam down and explain she is free to start failing her courses however it will not mean she gets anything, it will mean she will not go to college and it will mean you will save a bundle for her college expenses. Explain to her that in her blackmail attempt she blew any chance for getting a car, new or old.
Then point out that she has 2 years to get her shit together, get a job and become self supporting by the time she turns 18 because you are not interested in supporting a criminal. Blackmail is a crime, and she is really inept at it. Smile at her like a shark and tell her “dear you have no leverage, good grades are for your future and if you choose to throw your future away it is your choice doesn’t hurt me at all, in fact it will save us a lot of money we might use for a cruise or a really good vacation”. I would suggest you point out there is going to be a penalty for her action. Her allowance stops NOW. She needs to get an after school job since she won’t be studying to get good grades. Recommend fast food or convenience stores as places to apply.
If you really want to get her attention I would mention that it might be that she can also lose her phone, why should you pay for the phone of a blackmailer.
You never give in to blackmailers and your little princess is attempting to blackmail you.
