Author Topic: Paying for parent's stupid  (Read 3636 times)

kelvin

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Paying for parent's stupid
« on: September 08, 2017, 06:42:55 AM »
My parents are suckers for the twin pitfalls of optimism bias and denial.

Dad: I don't know why you're so worried about money. You only need $3000/month to pay all the bills.
Me: I make min wage, Dad.
Dad: So?
Me: Min wage pays $1300/month.
Dad: *falls over in shock*

Mom: I don't understand why you haven't bought new clothes/new furniture/a car.
Me: I'm so sorry I'm not middle class yet.

Dad's situation: His wife owns the home he lives in free and clear, which is the only reason he has a roof overhead. He has a good pension that is paying him ~$35000/yr. He likes to buy shiny trucks and RVs and ATVs on loan, especially if he can justify it with "for the grandkids". He has nine grandkids that he regularly babysits. He's been on the verge of bankruptcy three times in his life, at which point he acts as his own "credit counseling loan consolidator". He calls all the lenders, shows them how much he owes to whom, they write off the loan for a fraction of what it would've cost him to actually pay the damn thing off. He avoids bankruptcy and the hit on his credit score.

Mom's situation: Mom decided to get her MDiv at 53. She's currently receiving ~$9000/year from her retirement "nest egg". She works as a priest in a small community. The parish pays for her rent, she's paying student loans on the MDiv. She needs a car and is appalled that a V6 SUV type thing will cost her about $36000. I think she was willing to pay up to $10000.
(Rural Ontario car prices do not match anything you see on /r/usedcars. I'm trying to convince her to drive to Toronto for a good deal. )

Both parents have repeatedly told me "don't worry, we've got it covered. We'll be fine in our old age". I don't think they've factored in the cost of living in a nursing home, or the cost of getting a walker/hearing aid/whatever. I don't think they've factored in that cost of living is going to increase while their income stays flat for the next 35 years. (Family history: they will live well into their 90s.) I know they want to die on a rural farm in the sticks, which, fine, but then don't whine at me that you have to drive 3 hours to get to a doctor. What happens when they can't drive anymore? They can't afford life in the city.

I'm starting to make real, reliable money now. I'm paying off my student loans and setting a FIRE date and all that stuff.  I know I need some sort of "bail the parents out of trouble" fund. I also have many relatives who are working poor and I'd love to be able to pay for the odd car repair or help them with tuition.

What works for your family? Once your house/spouse/kids are covered, how do you deal with the extended family? Is there a percentage of your investments that you consider "money for charity" or "money for healthcare" or "money for car troubles"? I'm not talking about buying a brand new SUV for anyone who wants one, I'm concerned about my family not being able to afford reasonable expenses.  I want to automate away these kinds of expenses so I don't have to worry about them.

Laura33

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Re: Paying for parent's stupid
« Reply #1 on: September 08, 2017, 07:20:25 AM »
I think this is more about you than about them.  You are a good person to want to help your family.  At the same time, you can't let yourself assume the responsibility for keeping them financially afloat, or they will just take you down with them.

I would recommend approaching this not as "how can I figure out what they will need" but instead as "what can I afford to give without messing with my own plans too much?"  Sit down with your own plans and budget, and run scenarios to figure out how much your FIRE date/'stache amount changes if you dedicate $X/month toward a "family support" fund.  Figure out the amount of $X that you are comfortable with -- the amount that is "enough" (to satisfy your emotional obligations) but not "too much" (to delay FIRE too long or make you resentful).  That answer is going to be unique to you; no one else can really tell you what that is.

FWIW, my BIL is dealing with something similar - very poor family in Appalachia who have made and continue to make many bad financial decisions; he loves his mom, but he busted his butt to escape and is desperate not to get sucked back in.  So he and my SIL talked and thought and basically decided that they were willing to give up the idea of a vacation condo at the beach and would instead put that savings toward buying his mom a small house in cash when she ultimately got to that point, so he would at least know that she had a roof over her head. 

Not saying that is the answer for you -- BIL/SIL make multiple six figures and are not remotely Mustachian, and like I said, you need to figure out what level of support suits your own relationships and circumstances.  But I thought their analytical approach was a very useful way to address the issue (BIL is a CFO), because it helps take some of that emotional "worry/guilt" response out of the equation.
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kelvin

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Re: Paying for parent's stupid
« Reply #2 on: September 08, 2017, 07:33:54 AM »
But I thought their analytical approach was a very useful way to address the issue (BIL is a CFO), because it helps take some of that emotional "worry/guilt" response out of the equation.

This is exactly the type of thing I'm looking for, thank you. The idea of funding family instead of a second home seems like a reasonable approach, and I hadn't thought of it.

Everyone on this forum can agree on "pay off debt, save money now, expect ~4% payout per year from the investments, plan to live on that". I'm looking for a variety of approaches/summations to dealing with the extended family finances.

Gin1984

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Re: Paying for parent's stupid
« Reply #3 on: September 08, 2017, 07:49:51 AM »
We have this with my in-laws.  And we do have a small fund but it is fund they have funded, but they just don't know it.  Every time they send my husband money for something, we put a portion in "their" fund.  We attempt to find a better deal for whatever they wanted to buy us, and put the remains in their account.  We've put almost a thousand dollars together that way. 
However, a fund for helping because I want to, like car repair or tuition would be different in my mind.  We are the boring relatives who started each kid a 529 as their one year old present. 

kelvin

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Re: Paying for parent's stupid
« Reply #4 on: September 08, 2017, 07:58:21 AM »
Tuition would be for my cousins - four kids growing up below the poverty line. I hadn't considered asking if someone else in the family has something set aside for them, it's possible one of my grandparents has done this. I'd be happy to contribute to that, thanks for mentioning it.

ooeei

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Re: Paying for parent's stupid
« Reply #5 on: September 08, 2017, 08:08:45 AM »
I will give you one warning. The more you bail someone out of trouble, the less they worry about avoiding trouble in the future. Another way to put it, if you "pay for someone's stupid" that means they got to be stupid for free.

Keep in mind that the $500 you give them to fix a car, is actually $500 you're giving them for the boat payment they had which sucked up the $500 they could have used to fix their car.

Retire-Canada

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Re: Paying for parent's stupid
« Reply #6 on: September 08, 2017, 08:28:07 AM »
I know I need some sort of "bail the parents out of trouble" fund.

You don't. You really don't. Save money for retirement and unless you have a firehose of cash coming your way that you have so much you can fund your own needs and help others just keep that money for yourself.

That said for sure you should "help" your parents if you can, but that doesn't have to mean cash infusions. Especially if they have been poor money managers and could have avoided their problems. It means spending time with them, cooking them meals, helping them navigate Gov't financial aid programs. etc...

If they ask you about money I would say "I have no money to give you. I am just able to pay for myself." This is true because your retirement savings are not optional and they are not available to spend.


okits

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Re: Paying for parent's stupid
« Reply #7 on: September 08, 2017, 08:31:35 AM »
First, find out what the Ontario social safety net offers impoverished seniors.  Low-income housing, OAS, GIS, drug and medical benefits, aides to help them live in their own homes longer, covering the shortfall between what they can pay and the cost of basic long-term care (nursing home).  Sure, on the government's dime it won't always be their first choice or luxurious, but they won't be on the street.

Next, decide how much financial assistance you will provide as no-strings-attached handouts (e.g. "hey, I bought unnecessary X so now I need money for necessity Y") and how much you'll provide if a parent opens his/her finances to you, budgets and behaves responsibly.  Maybe you decide to save an extra $100K, so every year you'll disburse $4-5k in support.

Decide what you consider a reasonable standard of living.  This will be important as your parents may try to maintain their standard of living beyond what they can afford, and you'll need to know to what extent you'll support that.

For your cousins, see if Ontario will be footing their tuition bill for them.  If they're low-income enough, there are extra grants for contributing to an RESP for them.

Good luck finding the right balance!
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kelvin

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Re: Paying for parent's stupid
« Reply #8 on: September 08, 2017, 09:23:26 AM »
I will give you one warning. The more you bail someone out of trouble, the less they worry about avoiding trouble in the future. Another way to put it, if you "pay for someone's stupid" that means they got to be stupid for free.

Keep in mind that the $500 you give them to fix a car, is actually $500 you're giving them for the boat payment they had which sucked up the $500 they could have used to fix their car.

If you're talking about my father, absolutely. If you're talking about my cousins? I'd be happy to give them the money, they're going to spend it in a fairly mustachian way.

How have you helped out your family? What balance works for you?

I know I need some sort of "bail the parents out of trouble" fund.

You don't. You really don't. Save money for retirement and unless you have a firehose of cash coming your way that you have so much you can fund your own needs and help others just keep that money for yourself.

That said for sure you should "help" your parents if you can, but that doesn't have to mean cash infusions. Especially if they have been poor money managers and could have avoided their problems. It means spending time with them, cooking them meals, helping them navigate Gov't financial aid programs. etc...

I'm not talking about prioritizing my parents over my own retirement. I'm looking for what has worked for other mustachians when it comes to taking care of extended family. My family is a priority for me, and I chose to go into IT specifically so I will have the means to take care of myself and them. (Also I love it.)

I should mention that I am not, and will never be, any sort of caretaker. I refuse. I got out of poverty by insisting on being paid for my work, rejecting the small town "duty to the family" free labour. If you want me to cook/clean/drive for you, you will pay me the market rate for my time as an IT professional.

I am much more comfortable with, say, throwing $2000 towards a new car (that my mother had already saved towards and was going to buy anyway) than I am with giving up my career + moving to the middle of nowhere to parent a grown adult.

I can't afford to move my parents to the city at this time. I don't know if that's something I could save up for, I wanted to see if other mustachians had done something similar. It could be great for my parents towards the end of their lives - healthcare is much better here, and there are better residences for seniors. I would hate to see my parents housebound in the country when they could be walking/busing to social events in the city.   

First, find out what the Ontario social safety net offers impoverished seniors.  Low-income housing, OAS, GIS, drug and medical benefits, aides to help them live in their own homes longer, covering the shortfall between what they can pay and the cost of basic long-term care (nursing home).  Sure, on the government's dime it won't always be their first choice or luxurious, but they won't be on the street.

Next, decide how much financial assistance you will provide as no-strings-attached handouts (e.g. "hey, I bought unnecessary X so now I need money for necessity Y") and how much you'll provide if a parent opens his/her finances to you, budgets and behaves responsibly.  Maybe you decide to save an extra $100K, so every year you'll disburse $4-5k in support.

Decide what you consider a reasonable standard of living.  This will be important as your parents may try to maintain their standard of living beyond what they can afford, and you'll need to know to what extent you'll support that.

For your cousins, see if Ontario will be footing their tuition bill for them.  If they're low-income enough, there are extra grants for contributing to an RESP for them.

Good luck finding the right balance!

I'd forgotten that Wynne recently changed the tuition payouts! This is all excellent advice.

Is there some kind of way to make the payouts fair? "Oh, I gave mom $2k for a new car, so I'll pay dad $2k for his stepdaughter's car" or something? Does anyone do this sort of thing with their family? I mostly see ways it could go wrong...
« Last Edit: September 08, 2017, 11:31:57 AM by kelvin »

GizmoTX

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Re: Paying for parent's stupid
« Reply #9 on: September 08, 2017, 12:31:12 PM »
We learned a long time ago that payments to family members need to be considered gifts. Even so, the family member usually ends up resenting you in the process, even though this is completely unfair & unjustified. It is rare that a family member ever repays a loan.

We gave one of my brothers $10,000 after he had open heart surgery for a valve replacement & aortic aneurysm. His "plan" after surgery was that of course he'd go back to work, so he had zero savings put away for his recovery. His spouse had been unemployed for 3 years, although able to work & there are no children. I was fearful about this situation but my brother's health issues were in fact a bonafide emergency. What actually happened was that he was never able to return to work, which was an office job doing hotel accounting, & that was over 5 years ago. After his release from the hospital, we provided $1K at a time over 3 months, but stopped altogether when it became very apparent that he expected this to continue on a regular basis in perpetuity, while making no attempt at living frugally. Of course he was furious. Instead of promptly selling a house he could no longer afford & a car he could no longer drive, he did nothing & eventually was forced to declare bankruptcy, which meant he also lost the house. He continues to believe that we failed to support him according to some notion of what family is supposed to do.

We invited my mother to live with us after she developed terminal lung cancer. This was a blessing to have so much time with her at the end. In-home hospice was a great help, as DS was just a toddler at the time, & she passed in our home.
« Last Edit: September 08, 2017, 12:35:48 PM by GizmoTX »

brightblade81

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Re: Paying for parent's stupid
« Reply #10 on: September 08, 2017, 05:44:35 PM »
Thank you for posting about this topic, I may face a similar situation when my parents retire so its good to read all the various input.

As others have mentioned, be careful not to get pulled under yourself. 

Laura33 mentioned her BIL bought a house for their parents although that reminds me of an article by J. Collins:
http://jlcollinsnh.com/2014/02/20/case-study-10-should-josiah-buy-his-parents-a-house/

My philosophy has been, I will provide free labor, advice on how they can help themselves(occasionally sneak in some MMM), any government or local support programs, but I almost never flat out give money.  Basically trying to teach them to help themselves.  I have a fairly extensive family and they all have their issues and none are mustachian, so if I tried to help financially even half the time, I'd be in financial trouble...I wish I could save/help everyone but I cannot.  Plus as GizmoTX pointed out, giving people a steady cash inflow, when it becomes time to stop, it may get messy.  But if you must, always consider it a gift, never a loan, if they don't pay you back, then there is the whole drama around it.  My parents are still mad about the $3K they loaned my sister who never paid them back, they like to bring it up when she annoys them.

okits

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Re: Paying for parent's stupid
« Reply #11 on: September 08, 2017, 08:15:29 PM »
First, find out what the Ontario social safety net offers impoverished seniors.  Low-income housing, OAS, GIS, drug and medical benefits, aides to help them live in their own homes longer, covering the shortfall between what they can pay and the cost of basic long-term care (nursing home).  Sure, on the government's dime it won't always be their first choice or luxurious, but they won't be on the street.

Next, decide how much financial assistance you will provide as no-strings-attached handouts (e.g. "hey, I bought unnecessary X so now I need money for necessity Y") and how much you'll provide if a parent opens his/her finances to you, budgets and behaves responsibly.  Maybe you decide to save an extra $100K, so every year you'll disburse $4-5k in support.

Decide what you consider a reasonable standard of living.  This will be important as your parents may try to maintain their standard of living beyond what they can afford, and you'll need to know to what extent you'll support that.

For your cousins, see if Ontario will be footing their tuition bill for them.  If they're low-income enough, there are extra grants for contributing to an RESP for them.

Good luck finding the right balance!

I'd forgotten that Wynne recently changed the tuition payouts! This is all excellent advice.

Is there some kind of way to make the payouts fair? "Oh, I gave mom $2k for a new car, so I'll pay dad $2k for his stepdaughter's car" or something? Does anyone do this sort of thing with their family? I mostly see ways it could go wrong...

If both parents are making regular demands, open two savings accounts, deposit $2k in each every Jan 1st, and pay out from each parent's account for eligible expenses until the balance hits zero.  Eligible expenses should not include your parents gifting the money to other people.  If they're broke enough to be taking handouts from you, they're too broke to be gifting cash to others for big ticket items.  DO NOT TELL THEM THESE ACCOUNTS EXIST.

You asked for stories about how others have handled their situations.  Two members come to mind: wenchsenior (I think) and CheapskateWife.  I believe wenchsenior's family is supporting her mother and MIL in different ways, precisely due to transparency and reformed financial behaviour (or not).  CW has an old journal (you'll have to dig for it) that's a longer read but very illuminating.
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cacaoheart

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Re: Paying for parent's stupid
« Reply #12 on: September 08, 2017, 10:12:32 PM »
This is something I think about more as my mom has begun showing early signs of Parkinsons. For all of my life my parents have been focused on helping my older brother while I essentially, in their words, "raised myself". After my dad passed away 7 years ago my mom asked my brother and I to sign our partial ownership of our dad's mechanic shop over to her so she could rent it out, maintain it, and help cover her living expenses. I did so, and soon my brother moved into the shop after quitting a well paying programming job. He kept her from renting it out, junked it up, and hasn't had much of a job ever since.

When my mom finally got a life insurance payout for my dad, I encouraged her to use it to move close to me so she could get better healthcare, a better job, better social scene, and be nearby for if/when I had kids. Instead she slowly gave it all to my brother. Now that her health is declining and I have an infant daughter to focus on, I'm inclined to let my mom rely on my brother. I essentially gave her the money she needed to be ok, she let him burn it, refused to move to an area where I could help her, and now I'm inclined to be done. She's welcome to visit but I won't be lending any money and won't be taking on any responsibility to care for her.
« Last Edit: September 08, 2017, 10:17:27 PM by cacaoheart »

Playing with Fire UK

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Re: Paying for parent's stupid
« Reply #13 on: September 09, 2017, 12:16:37 AM »
My rule used to be that I didn't give money to people who were more wasteful than me (my definition is final, there is no court of appeal). I will not do without a boat so that someone else can buy one. When I got financially entangled with my SO and in-laws, I broke that rule because they seemed to need emergency help.

It has been a non-stop nightmare and I wish I could go back in time and say no the first time.

These people have had a lifetime to learn how to be custodians of their resources and have failed. If I had an infinite amount of money it still wouldn't be enough because they will always spend more than they have. My story is here.

We learned a long time ago that payments to family members need to be considered gifts. Even so, the family member usually ends up resenting you in the process, even though this is completely unfair & unjustified. ...

We gave one of my brothers $10,000 after he had open heart surgery for a valve replacement & aortic aneurysm. ... He continues to believe that we failed to support him according to some notion of what family is supposed to do.

So true. The way that such a generous gift gets turned around is absolutely brutal. 

Giving/lending/helping my in-laws and money has seriously damaged our relationship. We talk about money more than anything else, the conversations are tense and unpleasant, and somehow we're the bad guys for giving them less than we did before.

My advice is: don't do it. Don't give the first dollar, because the request for the second is just around the corner. They think they are fine, the last they heard you were working minimum wage and they weren't lining up to give you money. Fix your own oxygen mask first. Once you are sorted and have wealth beyond what you can spend and are giving your money away, then consider giving people more wasteful than you money.

Gone_Hiking

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Re: Paying for parent's stupid
« Reply #14 on: September 09, 2017, 09:06:03 PM »
DH are in a similar situation are helping MIL.  I happily share our resources with her, and no, there is no end to it.  There is a limit on the transfers, however.  DH and I have agreed on the monthly amount to contribute without endangering our future.  Seems to me that you might be able to do something similar.   Figure out first how much you want to improve your financial feature, you planned savings and the rest of the budget, subtract that from your take home pay, and the difference will be the family assistance.  If it comes to $100 a month or less, so be it.  Make yourself solvent first.

kelvin

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Re: Paying for parent's stupid
« Reply #15 on: September 10, 2017, 06:20:07 AM »
In my case, no one is currently asking me for money. The reason I'm asking this now is so I can avoid the horror stories mentioned in this thread.  I'll be checking out the journal entries listed above. Thank you for your input!

I had a really, really rough time graduating from college due to a lack of financial planning on my part and my parents. I've learned from that mistake, and I know I need some kind of plan for how to help out other relatives going forward. Everyone here has a plan for financial freedom, and for me, financial freedom will include some level of care for my extended family. I know that if I help out one relative, the others will hear about it. I'm thinking I should make some sort of definite rule that I can communicate to the whole family. "Help is only for tuition" or "I will only payout up to $X in a year for the whole extended family" or "You can only borrow a second time after the first has been paid off." There is a family tradition of interest free loans on my mom's side, and with one exception, everyone pays them back just fine.

Some of the things in this thread (and site) have helped me think differently about my father's finances. He's much more irresponsible than I'd considered, and there's a lot of good advice here for dealing with this type of person.
« Last Edit: September 10, 2017, 08:58:23 AM by kelvin »

Playing with Fire UK

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Re: Paying for parent's stupid
« Reply #16 on: September 10, 2017, 07:21:00 AM »
When you set the rule, bear in mind that you can always choose to make it more generous, but it will be more difficult to explain to family that the free-money-tree has become more stingy, even if it is still exceptionally generous. So start small, or start with "I can't afford that" or "I will help with applications".

I'd strongly caution against $X for the whole family - it could cause a grabbing race when the new year rolls around!

wenchsenior

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Re: Paying for parent's stupid
« Reply #17 on: September 10, 2017, 12:18:18 PM »
First, find out what the Ontario social safety net offers impoverished seniors.  Low-income housing, OAS, GIS, drug and medical benefits, aides to help them live in their own homes longer, covering the shortfall between what they can pay and the cost of basic long-term care (nursing home).  Sure, on the government's dime it won't always be their first choice or luxurious, but they won't be on the street.

Next, decide how much financial assistance you will provide as no-strings-attached handouts (e.g. "hey, I bought unnecessary X so now I need money for necessity Y") and how much you'll provide if a parent opens his/her finances to you, budgets and behaves responsibly.  Maybe you decide to save an extra $100K, so every year you'll disburse $4-5k in support.

Decide what you consider a reasonable standard of living.  This will be important as your parents may try to maintain their standard of living beyond what they can afford, and you'll need to know to what extent you'll support that.

For your cousins, see if Ontario will be footing their tuition bill for them.  If they're low-income enough, there are extra grants for contributing to an RESP for them.

Good luck finding the right balance!

I'd forgotten that Wynne recently changed the tuition payouts! This is all excellent advice.

Is there some kind of way to make the payouts fair? "Oh, I gave mom $2k for a new car, so I'll pay dad $2k for his stepdaughter's car" or something? Does anyone do this sort of thing with their family? I mostly see ways it could go wrong...

If both parents are making regular demands, open two savings accounts, deposit $2k in each every Jan 1st, and pay out from each parent's account for eligible expenses until the balance hits zero.  Eligible expenses should not include your parents gifting the money to other people.  If they're broke enough to be taking handouts from you, they're too broke to be gifting cash to others for big ticket items.  DO NOT TELL THEM THESE ACCOUNTS EXIST.

You asked for stories about how others have handled their situations.  Two members come to mind: wenchsenior (I think) and CheapskateWife.  I believe wenchsenior's family is supporting her mother and MIL in different ways, precisely due to transparency and reformed financial behaviour (or not).  CW has an old journal (you'll have to dig for it) that's a longer read but very illuminating.

You are correct.  Both of our mothers were flat broke as they approached retirement age.  No savings, no home equity, no assets, crappy old vehicle, some credit card debt.  One of them is stubborn and refuses to go into state-subsidized housing (though she qualifies) and we don't trust her to spend the money only on her own needs.  Since she will not be transparent about her finances and lives far away, we budget several thousand per year for the panicked phone calls where she's homeless or whatever.  That's all we are willing to do.  The other was willing to turn over all financial information and have me as a co-manager of her money.  We bought a second house and gave her our beater car.  For the first 5 years we paid all the utilities, mortgage, insurance, etc.  She used her small SS check to pay for daily expenses.  After about 5 years, she got a small inheritance, and from that she has taken over utilities, and some periodic expenses for home repairs etc that we used to have to do.

So all told, we spend between 5-10K extra per year on parental support.  The only way were are able to do this is because we live in a VERY cheap area...you can get decent 2/1/1 houses here for <70K.  It's tough, but it's what we can live with.

There are many many threads on the board covering this topic...lots of us have faced this situation.  Everyone handles it differently...but the most important advice I can give is that you need to not ignore the prospect.  Figure out in advance what the situation really is, and what you are willing and able to do and not do...make sure it is something you can live with psychologically as well as monetarily.

clarkfan1979

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Re: Paying for parent's stupid
« Reply #18 on: September 10, 2017, 07:11:51 PM »
Figure out what you are willing to do for your parents in an emergency and focus on that. You can't stress over trying to control their behavior. Most likely it will not happen.

When I got my first job out of grad school, I was 31. I bought a small fixer upper house in a blue collar neighborhood and was also paying off my student loans. My parents made fun of me for buying my work clothes at Goodwill and just being "cheap in general" However, I would like to think that I was being responsible with my fiancés. I was making sure that I had money to pay my student loan bill and also finish fixing up the house.

Fast forward 6 years and my parents complain about "always being broke". Over the last 6 years they have had a million excuses of why they don't have any money, mostly focused on bad luck. However, I have come to realize that they are consistently broke because of the choices that they have made. 

They inherited about 300K about 5 years ago and 50% of it is gone. Give it another 5 years and it should be completely gone. My dad has a pension and they both have social security. That should be enough, but their expenses continue to be higher than their income.

However, I have already decided that I will only give them free rent. They can move in with me. I will not give them money. I don't think I worry about it because I already decided what I will do.

ooeei

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Re: Paying for parent's stupid
« Reply #19 on: September 11, 2017, 08:16:40 AM »
I will give you one warning. The more you bail someone out of trouble, the less they worry about avoiding trouble in the future. Another way to put it, if you "pay for someone's stupid" that means they got to be stupid for free.

Keep in mind that the $500 you give them to fix a car, is actually $500 you're giving them for the boat payment they had which sucked up the $500 they could have used to fix their car.

If you're talking about my father, absolutely. If you're talking about my cousins? I'd be happy to give them the money, they're going to spend it in a fairly mustachian way.

How have you helped out your family? What balance works for you?

Luckily I haven't had to help out my family, they've got their shit pretty well together financially.  My girlfriend's family on the other hand, is a bit of a mess.  They tend to share resources and money and housing for awhile without ever explicitly talking about it, and then all get pissy after a few years when they feel like things aren't fair.

She used to bail them out pretty regularly, then I pointed out  they replaced their 5 year old car with a brand new one, while her car is 9 years old. She basically made the decision that she's not going to help somebody financially who spends more money than she does on frivolous things. Then we found out they spend ~$1000/month on groceries, most of which is thrown away, and who knows how much on restaurants. They're actually making good steps now, but it's very easy to fall into the trap of helping someone who claims to be having a rough time and actually is just making poor choices.

Another example is our current roommates. Before we were roommates my girlfriend would always try to pick up the check if we met up with them at restaurants, because they always seemed to be having a tough time saving enough even though they hit all their bills fine because their jobs were relatively low paying.  Once we moved in together we found out they waste money on all sorts of stupid stuff, and are both pretty lazy when it comes to work and career advancement.  They always talk as if they really want to save more and be frugal and get a higher paying job, but their habits say otherwise.

alewpanda

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Re: Paying for parent's stupid
« Reply #20 on: September 11, 2017, 11:00:03 AM »
This is a super sensitive and personal decision to make.

If you already believe that you will be giving/spending money in the future to take care of your family, then certainly plan for additional funds per year to adjust for that. 

You will also want to take into consideration some "boundaries" that you can agree to in advance.  For instance, we are still in our late 20s, so MIL is nowhere near retirement age, but she is already regularly in dire straits.  She regularly has cable tv, buys dollar store junk, smokes, and on and off refuses to have a roommate or share an apartment with family.  Thankfullly, we are not local to her, so any requests or "hints" have to be communicated via phone calls. 

We have, in the past, agreed to spend 100 here or 150 there to keep her electric on or to catch her up on health insurance premiums.  She complained about the costs of prescriptions once, we did the research long distance and arranged a discount card for her that she qualified for and found a pharmacy that would let us pay over the phone for the most important of the meds if she ever couldn't get it (heart medication).  She took the discount card, but so far we haven't had to pay for the perscription.  I still don't know if what she actually wanted was cash (perhaps she just didn't want to ask directly for it), or if she actually needed the discounts and can now afford the meds.  We almost never send her cash...we call up the company she owes and work something out if at all possible.  We have also told her no if she has made requests more than once or twice a year...so our costs so far have been relatively negligible.  DH's brother has helped a few times, but generally they speak to one another about it beforehand.

Recently, MIL asked for a hefty amount in comparison to past requests.  She was moving in with her mother to share living costs and needed 1000.00 to settle with some bills she had gotten behind on with the other apartment and utilities.  We talked to her for a bit, found out she was giving up her cell phone plan for a prepaid, letting the rent to own furniture get picked up, and would be helping her mother with bills.  We said we could help if she did the following. We wanted her to sign up to be a member of the local community center, which provides free budgeting classes and free or nearly free weekly activities like bingo, art and pottery classes, exercise classes for a buck or two a class, ect.  Much of her issues are emotional...and she seldom leaves the house unless she is working or blowing her money, she has no community.  We also told her that if we gifted the 1000.00, it would be last in a while.  She spoke with her mom about it, who encouraged her to do it because our desire was simply to be happier, healthier, and to have relationships outside of her family (who she milks to death).  Instead she called us back and turned down the funds.....





Penelope Vandergast

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Re: Paying for parent's stupid
« Reply #21 on: September 11, 2017, 09:59:24 PM »
I don't know how old your parents are or what the situation is in Canada, but in the U.S. you sometimes have to be on wait lists for years before a spot opens up at the better assisted living/senior living places. Depending on their health and age you might want to think about getting them on wait lists now, maybe and especially if you can talk them into doing it near where you live (it sounds like you'd much prefer them coming to you rather than the other way around). It's not like they are forced to drop everything and move in if their number does finally comes up. This is probably a very tall order though...

rockeTree

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Re: Paying for parent's stupid
« Reply #22 on: September 12, 2017, 05:22:32 AM »
One thing I haven't seen mentioned is that hiding the assistance can reduce resentment and follow up requests. I have a mentally ill in law with a chaotic life and we've given them a grand a couple times to keep them off the streets. Another relative who is a minister (and can't afford it) says someone at church heard they were in need and wanted to help. This person is... challenging and the layer of pseudo anonymity makes it easier.


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kelvin

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Re: Paying for parent's stupid
« Reply #23 on: September 13, 2017, 06:41:05 AM »
Okay that church fund thing is genius. Kinda difficult to pull off in a small town without them finding out about it, but even if they found out about it later, it will help. They'll know I don't directly reward bad behaviour.

Lulee

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Re: Paying for parent's stupid
« Reply #24 on: September 13, 2017, 12:41:02 PM »
For your cousins, could you do something like offer matching funds for any scholarships/grants/savings they get towards college costs, up to a fixed yearly amount?  This encourages work on their part and rewards it.  Some other thread, another poster was doing a cool thing with nieces/nephews where they gave a reward for each of an agreed upon set of financial books (maybe online courses too I forget) that the kid reads and then through a discussion or book report, prove to have studied.  That rewards the learning and would emphasize to your cousins the kind of things you wished you'd learned at their age

As far as your folks, you've gotten great advice on boundaries so I can't add much except they may actually not need much real help, especially your Dad who sounds very talented at getting what he wants.  Maybe research their options for them as things stand now and breach a conversation with each one by stating how you're worrying about some things like their desire to be out in the country at an age where they may become isolated and would they be willing to set your mind at ease by giving you a bit more info about their plans.  This tack allows them to open up without feeling like you might be criticizing them or being "nosy" and you can offer any insights that might help based on something you "just happened to be reading" about.

kelvin

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Re: Paying for parent's stupid
« Reply #25 on: September 13, 2017, 03:54:01 PM »
For your cousins, could you do something like offer matching funds for any scholarships/grants/savings they get towards college costs, up to a fixed yearly amount?  This encourages work on their part and rewards it.  Some other thread, another poster was doing a cool thing with nieces/nephews where they gave a reward for each of an agreed upon set of financial books (maybe online courses too I forget) that the kid reads and then through a discussion or book report, prove to have studied.  That rewards the learning and would emphasize to your cousins the kind of things you wished you'd learned at their age.

I don't really see this as helping my cousins! They're all voracious readers/tinkerers, always learning something new. They only have one computer between the four of them, so they mostly work with their hands doing mechanical work/tradeswork. My concern for them is tuition, of course, and cars. A family of six people, four of them drivers, and only one vehicle for the whole family.  On a dirt road. I'd like to be able to pay for repairs, or preferably a vehicle for each driver (they all have jobs, I have no idea how they managed that. I had to move to the city to get a job.)

I know they're not interested in a career outside of the trades, but I'd like them to have the option. I don't want to pressure them "oh you have to move to the city and work in IT", but I also don't want them to feel like they're stuck on that dirt road. (Like I almost was. *shudders*) I know that if I gave them a million dollars right now they'd be spending it in ways that would make everyone on this forum proud. The biggest challenge with them is that there are four boys. Any gifts/assistance that go to one, will have to be replicated for the others. (Unless I give it to the parents, but honestly, I kind of hate the parents. Long story, not getting into it here.)

As far as your folks, you've gotten great advice on boundaries so I can't add much except they may actually not need much real help, especially your Dad who sounds very talented at getting what he wants.  Maybe research their options for them as things stand now and breach a conversation with each one by stating how you're worrying about some things like their desire to be out in the country at an age where they may become isolated and would they be willing to set your mind at ease by giving you a bit more info about their plans.  This tack allows them to open up without feeling like you might be criticizing them or being "nosy" and you can offer any insights that might help based on something you "just happened to be reading" about.

Yea, I should probably learn how to have some kind of conversation with my parents and with my brother about this sort of thing. I think my parents will be okay in terms of income, but not great. I've seen them be completely blindsided by perfectly normal expenses (like my rent in the city) and I could see that happening again in the future (Do they have any idea what a nursing home costs? I don't. Maybe I should.)

I'm still young enough that this isn't my problem yet, which is why I'm planning now. They're still young enough and in decent enough health that they're in denial about the whole thing.

I like the idea of "I don't have a cottage, I have a stash of money for relatives". I like the idea of giving through a local church, instead of giving directly. I like the idea of having a yearly budget for these types of expenses. These are the kinds of ideas I was hoping to get from this thread. The relationship part of it isn't something someone on a forum can help me with. The money formulas are what I came here to see.

If anyone has any statistics/data/pretty graphs on this subject, I'd love to see them. If anyone has any links to journal articles about ageing populations, I'd love to see them. I know how to calculate my own retirement needs, but I have no notion of "how much is Enough for my extended family". I wish it was as simple as the 4% rule.

seathink

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Re: Paying for parent's stupid
« Reply #26 on: September 13, 2017, 05:31:41 PM »
Glad you are getting good ideas here. An idea for your cousins - could you do the "someone at church" route for them, but with individualized educational help? Like, oh, 3rd youngest cousin, someone at church/school/library/your job heard about your backyard robot fights and wants to sponsor you to go to a summer robotics camp, or what have you.

That way maybe you could circumnavigate the "same thing for each one" stuff, circumnavigate the parents, and be helping them see that alternate future that doesn't end in a dirt road. Also, ideally these experiences would bring them in contact with other adults who can also mentor/support/encourage. And hopefully as each comes home they can share what they learned with the others.

I think, too, getting them (the cousins) good but beater used cars is an awesome thing to do and will help a lot.
“Keep what is of no use at the moment, and later you will find what you need, one of her grandmothers had told her, the water in which you soak them will also serve to cook them, and whatever remains from the cooking will cease to be water, but will have become broth. It is not only in nature that from time to time not everything is lost and something is gained.” ― José Saramago, Blindness

The stockmarket is the worst place you grow your money passively except for every other alternative.

kelvin

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Re: Paying for parent's stupid
« Reply #27 on: September 14, 2017, 12:00:45 PM »
Glad you are getting good ideas here. An idea for your cousins - could you do the "someone at church" route for them, but with individualized educational help? Like, oh, 3rd youngest cousin, someone at church/school/library/your job heard about your backyard robot fights and wants to sponsor you to go to a summer robotics camp, or what have you.

That way maybe you could circumnavigate the "same thing for each one" stuff, circumnavigate the parents, and be helping them see that alternate future that doesn't end in a dirt road. Also, ideally these experiences would bring them in contact with other adults who can also mentor/support/encourage. And hopefully as each comes home they can share what they learned with the others.

I think, too, getting them (the cousins) good but beater used cars is an awesome thing to do and will help a lot.

These kids are homeschooled until Gr. 11. Getting them in contact with adults is difficult, in part because the parents feel the need to thoroughly vet everyone who interacts with their kids. (They're very controlling. The use religion as an excuse, but honestly, it's just control.) I wonder if there's a robotics competition in the nearby city.

These kids would love beater cars, and take good care of them. I can't afford it right now (just buying my own car) but I would love to be able to do that.

Accidental Miser

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Re: Paying for parent's stupid
« Reply #28 on: September 14, 2017, 02:22:41 PM »
Some of the things in this thread (and site) have helped me think differently about my father's finances. He's much more irresponsible than I'd considered, and there's a lot of good advice here for dealing with this type of person.

Excellent thread.  Much of the time, the situation is flipped.  Your parents are grown people.  You are not responsible for them.  Your cousins are absolutely not your responsibility.

If your father is irresponsible, don't enable him by giving YOUR money to waste.  We help our sons in various ways but only in ways that help move them toward responsible full adulthood.  Just be careful about becoming "First Family Bank". 

seathink

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Re: Paying for parent's stupid
« Reply #29 on: September 14, 2017, 07:22:06 PM »
Quote
These kids are homeschooled until Gr. 11. Getting them in contact with adults is difficult, in part because the parents feel the need to thoroughly vet everyone who interacts with their kids. (They're very controlling. The use religion as an excuse, but honestly, it's just control.) I wonder if there's a robotics competition in the nearby city.

These kids would love beater cars, and take good care of them. I can't afford it right now (just buying my own car) but I would love to be able to do that.

Dang, that's tough. Thanks to your thread I looked up Rasberry Pi and besides something cool to learn to code with for yourself, you might be able to get some for all 4 guys. Maybe to help with science? (If that's kosher...)  Also maybe some TreeHouse accounts? At the least, you could have some conversations about what you are thinking about learning. As the cool, older relative, that might spark some interest in different activities than they've been exposed to previously.

Once you yourself get a good car, then you can scout around. Good luck to you! I feel you have a good handle on some concrete ways to show love to your family, not random economic outpatience to be repeated ad nasium. :)
“Keep what is of no use at the moment, and later you will find what you need, one of her grandmothers had told her, the water in which you soak them will also serve to cook them, and whatever remains from the cooking will cease to be water, but will have become broth. It is not only in nature that from time to time not everything is lost and something is gained.” ― José Saramago, Blindness

The stockmarket is the worst place you grow your money passively except for every other alternative.