I'm recently converted, and am starting to implement changes in my life. I'm seriously worried about my parents, and wondered if anyone had any suggestions to help. I can't see much long term hope, so am hoping someone can!
Facts:
Me - 29, hair on fire, negative net worth, student loans/car loan/cc debt. I'm an accountant. I'm new to MMM, so be kind.
Sister - 26, even worse, and with pitiful income prospects once she actually earns an income.
Parents:
Dad is 62, working FT, earns I think about $50k per year.
Mom is 58, self employed, earns about $20k per year
Assets/liabilities:
Duplex house, they live in half, rent out half. Occupancy is difficult to keep due to local market. They need the rent to make mortgage payments without stress. The house is underwater, ARM, currently good rate, with a cap on the annual increase. It's actually gone down.
Student loans - for both myself and sister. I plan to pay off my share in the future (see above about my hair on fire). Sister will probably never make much money, but don't know her plans.
Credit cards, medical bills (mom had cancer a few years ago, but doing ok).
1 car, 2013 Chevy eco cruize. Dad takes the bus to work, mom limits driving due to gas costs. Special thing on the loan where if anything happens to dad's job, the loan is wiped out and they'd own it free and clear.
401k - dad has a few scattered about which I will consolidate and deal with somehow (advice on investments?), I'd be surprised if he has $100k though
Maybe a few thousand in savings.
In general, they're pretty frugal for non-MMM lifestyle, with some exceptions. Both don't like to cook much, so they go out 1-2 times per week, but to the local low cost places. Both smoke. They don't buy things much. 3 cats.
The elephant in the room, which will not get better or go away and will be a huge problem later, is that dad is in the early stages of dementia. It's not public knowledge yet because it isn't that bad, but it will get there eventually. Right now it's moving slowly, though this could change at anytime. However, he can't do things around the house anymore that he used to, can't do maintenance on the car, has to be supervised when cooking. Gets a little irrational at times, easily confused, etc. No family in the area, not a lot of local support.
Both are now turning to me for financial/tax assistance. Dad is responding better to me in this area, so mom is using me as a bridge to get through to him. I've fired him from doing their taxes due to the IRS problems this past summer where they ended up owing $2k due to a stupid mistake (the dementia showing there). Mom handles all finances, but is terrible with math and doesn't understand much beyond the basics. Dad has always done everything car related, mom just pays the bills.
I expect that they'll owe on taxes for 2014 and nothing I can do to change that via tax planning. Luckily, this will be their grace year so no penalties/interest from the IRS.
Any suggestions so I can help them avoid a flaming meltdown at some point in the future? Basically, as long as dad can still work, I can help improve things, once he can't it'll be damage control and picking up the pieces. I'm assuming that I will be significantly assisting to support them at some point in the future.
Thanks in advance for any suggestions!