Author Topic: Back to the drawing board with my parents.... and still don't know what to do.  (Read 29589 times)

nyxst

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I had written on this forum before about a year ago, I think, about my parents and their terrible financial problems and gotten feedback that improved my clarity.  Hoping for more of the same now....

Well, they had some problems through the last year (a few trees fell on their house and destroyed a good portion of it) and the insurance payments didn't cover everything (tree removal wasn't covered except for the tree that landed IN their living room, for example) and they desperately needed cash to get through the ordeal...   Long story short, they were supposed to pay me back when the insurance check came.  But, in order to get the final payment from insurance, all the work needed to be finished... the work couldn't get finished until they paid the contractors to finally finish it all...  so they needed to borrow some more cash.... sigh.... anyway, the final check came and it wasn't for much, but they gave it to me, and promised that they would give me their tax return.

I know that when you give money to family, you should consider it as a gift and not as a loan, but I am not exactly in a position to give away that much money (it is my emergency fund and I am a single parent of three kids that I need to provide for.)  So, unfortunately, I need that money back. 

Anyway, tax season comes around.... they are expecting a $4000 return.  Turns out they OWE $1500, because my mom got Obama-Care insurance and took a premium discount that she didn't actually qualify for.... and, of course, they don't have the money to pay the taxes.... and need to borrow the cash.

I insisted that they disclose all of their finances to me (I am out  $6500 now... I am tapped out and I wanted to see if there was an ETA for getting the money back).  They did so begrudgingly. 

Ok, here is the depressing part.

They owe
$130,000 on their house (not bad, but not great)
$14,000 in credit card debt (making minimum payments)
$23,000 on a HELOC (they are making interest only payments)
No car payments (wooohooo!)
 
$38,000 per year income.

When it is all said and done, they are short almost $700 per month.  I can only figure out how to squeeze them down by about another $300 per month (cut cable, get rid of a car...etc etc.) And all of that short fall either goes onto a credit card or onto the HELOC.  They got the HELOC to consolidate their credit card debt 2 years ago and it was only $14000 then. 

Anyway.  I am trying to show them there is a better way to live.  They are depressed, they are angry with each other, and at this rate, they will be bankrupt and homeless in a very short time.   My mom seems to think that everything will be fine once my dad can get his social security.  He is 57.  He works a hard job as a laborer and has no education.  My mom watches my kids so I can work and I pay her for it.  She is an artist and hasn't had a job since I was a kid.

I work hard and I save a lot of my income, but I don't make a ton of money either. I am putting myself through school and am doing my best to avoid incurring debt in the process.  Their situation is dragging my household down along with it, since, even though I cut them off and will never offer cash again, they have so much already with no hopes of repayment.  I am making them apply for welfare, which is a sever pride shock for them.  I made them a budget and I intend to sit with them every week and pay their bills and work on their weekly spending allowance...  I am an only child and I feel that taking care of my parents is mandatory, but taking care of my kids and household is MORE important... I feel incredibly guilty saving money for my future......

Stachetastic

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Wow, that is a lot for any adult child to deal with. I can commiserate with you somewhat, having to contribute to my mother's financial wellbeing lately. It sucks any way you look at it.


~Can your mother find a part time job on evening/weekends? As long as she is physically capable, she should be looking at all means of bringing in extra income.
~Do they have any assets they can sell?


ShoulderThingThatGoesUp

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Move to a less expensive house? Theirs has a new roof...

waffle

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Not really any advice to offer here, but when I first read your topics title I thought it meant that you had to move back in with your parents.

Apocalyptica602

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I might have missed it, but whats their financial situation re: their house? You posted that they owe $130,000, what is the house worth?

It might be worth them downsizing, settle up their mortgage and as much of their debt if possible, and then rent a modest 2 bedroom apartment or something. Their income is low but from a cash flow perspective they might come out ahead, no property taxes to worry about, no major maintenance, less stuff to do around the house so maybe it will allow mom to pick up a part time gig she can work around your kids.

My parents currently have way too much mortgage remaining on too much house, and are in their mid 60s. Selling their house and downsizing would set them up to live like kings with no debt even as average consumer sukkas (who like to gamble too!).

So I understand firsthand that you may end up dealing with significant pushback from them to the idea of downsizing, even if it makes financial sense.

MayDay

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What is the timeline for all your kids getting in full day school?

Your mom obviously needs to continue bringing in income.  More, if possible.  Otherwise they need to majorly downsize housing costs.

Do they have a bedroom they could rent out in their house?

nyxst

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~Can your mother find a part time job on evening/weekends? As long as she is physically capable, she should be looking at all means of bringing in extra income.
~Do they have any assets they can sell?

I am trying hard to make a list of options for her to make extra income.  I have about 10 options so far.  She is depressed and extremely negative (not sure which is cause and which is effect...)  but I want to have a list that she can "choose" from.. I am going there on Sunday to try to re-situate them as much as possible... I am hoping to get her to see it as choosing her best option...

Pigeon

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Could your mother watch a couple of additional kids with yours to bring in some cash? She would probably need to get a license depending on your area but it might be enough to bridge the cash gap each month.

GizmoTX

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At some point they will lose the house and/or go bankrupt. Would it be better to sell now & see if they qualify for low income housing?

nyxst

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I might have missed it, but whats their financial situation re: their house? You posted that they owe $130,000, what is the house worth?

.....

So I understand firsthand that you may end up dealing with significant pushback from them to the idea of downsizing, even if it makes financial sense.

My best guess for their house worth would probably be $300,000, give or take $20,000...  It is a small 2 bedroom in a nice older neighborhood.  They have a pool, which provides summer entertainment for my kids and saves me on summer camp costs... I talked to them about downsizing last year, or combining households, but it was like running into a brick wall.  I will bring it up again with them on Sunday.

mtn

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Ideas, some may be possible, some not:   
 +Sell the house if they're not upside down 
 +You move in with them if they have space, and pay them rent (and either rent your house or sell it if you own) 
 +Mom takes in more daycare kids 
 +They take on a boarder 
 +Mom gets a job on weekends/nights. As a teller, cashier, shit-shoveler, whatever. $10 at a time. 


And if they say no to all this, sadly, bankruptcy. Which means that you will not get paid, and a good chance they lose the house as well.

mtn

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I might have missed it, but whats their financial situation re: their house? You posted that they owe $130,000, what is the house worth?

.....

So I understand firsthand that you may end up dealing with significant pushback from them to the idea of downsizing, even if it makes financial sense.

My best guess for their house worth would probably be $300,000, give or take $20,000...  It is a small 2 bedroom in a nice older neighborhood.  They have a pool, which provides summer entertainment for my kids and saves me on summer camp costs... I talked to them about downsizing last year, or combining households, but it was like running into a brick wall.  I will bring it up again with them on Sunday.

Good Gravy. Sell the house, collect $150,000, pay off HELOC and Credit Card and you, rent for a year while saving up more for the next house.

nyxst

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What is the timeline for all your kids getting in full day school?

Your mom obviously needs to continue bringing in income.  More, if possible.  Otherwise they need to majorly downsize housing costs.

Do they have a bedroom they could rent out in their house?

Renting one bedroom or the basement is on my list of options for them.  My youngest is going to kindergarten next year, so they will all be in full day school.

tarheeldan

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They need to cut spending by the $400/mo in cuts you identified.

On top of that they need to either increase income or further cut spending by another $300/mo, and that's just to break even.

If they're ever to pay you and their other creditors back, they'll need to do more. I don't think renting out their basement or a room will cut it.

You shouldn't feel guilty about saving. Your obligation to them could be met by sheltering them and providing food, like the old days. Maybe cohabitating is a good solution for all.

nyxst

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My parents live with me (not for financial reasons).  From my reading of your posts, I don't see cohabiting as a great option; if they are not capable of making financial choices on their own, and you feel they are taking your household down with them now, I don't see how that would change.  (Behaviour / choices might trump cash flow wins.)

That's not even touching on all the emotional issues that could arise (on your part or theirs).  Which are real (though to some extent unknown in advance), even when you are the one making the offer to assist.

Just my 2c.

Yes, the idea of trying to live under one house is terrifying for me... haha!  Neither of our existing homes would really fit us all anyway.  They have a couple of things they can sell, so that will be a part of my "choices" conversation on Sunday... 
I am going to do my best to force a change, but I know I can't make them.  If I can get my dad on board with a big change, then my mom will have one less excuse... my mom says my dad NEEDS x,y, and z... my dad says my mom NEED a, b, and c..... so I am making us all sit in the same room and figure out what they really NEED... I have no idea how much longer my dad's body is going to hold up for this kind of physical labor. 

I love this forum... it's like my own personal think-tank :)

nyxst

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They need to cut spending by the $400/mo in cuts you identified.

On top of that they need to either increase income or further cut spending by another $300/mo, and that's just to break even.

If they're ever to pay you and their other creditors back, they'll need to do more. I don't think renting out their basement or a room will cut it.

You shouldn't feel guilty about saving. Your obligation to them could be met by sheltering them and providing food, like the old days. Maybe cohabitating is a good solution for all.

I wish I could figure out how to remove the guilt.  I think by forcing my "solutions" on to them and doing my best to re-set their ideas and how they run the house, maybe some of the guilt will be removed... if I have done everything I can to help them change their ways, at least I tried my best.   
You are right, even if they rent a room, they will not be breaking even.. and my calculations don't even get out of the very basics, like food, shelter, debts, etc. If I start adding in other items they think they need... my dad ruins clothes at work, but my mom buys him new pants... I went to a second hand shop to show her he could have 5 pairs to ruin for under $20, and she just would rather not leave the house and order online..... very frustrating to watch and hard to keep the anger from boiling up.

GizmoTX

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It's so sad to watch the denial, knowing what will eventually happen as they refuse to believe reality. I went through this with one of my brothers after he became disabled. I "lent" him $10,000 that I know I'll never see again, & insisted that he tell me his finances. He was angry when I refused to give him any more. Although he could no longer drive, he & his partner refused to sell even 1 of their 2 cars, "just in case he could miraculously drive again". He had too much house with a ridiculous mortgage interest rate, but had already wrecked his credit, making it impossible to refinance. Then it needed repairs, so he didn't want to sell it at break-even, even though he was no longer able to cover the payments. He went on SNAP. Two years later, he & his partner declared bankruptcy & then lost the house. Had they jettisoned the house, car, & other spending much earlier, they wouldn't have horrible credit now & might even have some savings. My brother & his partner still try to sell some high priced MLM products that few people want & it's not enough to sustain them.

Renting out a room is like rearranging the deck chairs on the Titanic. Selling the house appears to solve their debt problems very nicely, & maybe they could find a neighborhood to rent an apartment where a car is much less important. Social security is too far away to save them.

Megma

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I just wanted to say I'm so sorry you're going through this. I think you have a good plan and there are some good ideas being offered. I hope you're "choices" conversation goes well and if not, you need to look out for yourself and your kids first, don't feel guilty about that. Your kids are young and the need you, your parents are supposed to be adults and able to take care of themselves.

Good luck!

TrMama

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I have a MIL who is not in good financial shape. It's hard to watch her struggle when theoretically we could "help" more. However, I feel much more strongly about making sure I never put my own children in the dilemma of "Help mom? Or help myself?" I never, ever want my kids to have to worry about my finances. I want them to be able to live their lives and do their own thing and look after their own children. This line of thinking helps immensely with the guilt.

I think you're on the right path. Just be aware that at some point you will be "tapped out" of being able to offer advise and at that point you will have to let them live the life they have created for themselves and suffer the consequences.

okits

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Unfortunately, I see no outcome without some hard parts to it.

Are things like "you need to go on welfare" and "you're going to lose the house" not wake-up calls for them?  Situations involving insolvent parents are very emotion-filled, with parental ego and feelings that they always know best, and children who refuse to let their parents fail, thus sacrificing their lives and finances looking after their parents.

Your duties to both your parents and your children are similar; to the best of your ability you will always provide:

  • food,
  • a place to sleep if they face homelessness,
  • encouragement and emotional support.

Furthermore, you will be independent and not a burden to either your parents or kids.

I think you should do your absolute best to educate and convince your parents to take action and to suggest all viable options. Then, you are the back-up food-and-shelter. Trying to force anything will probably not work and just ruin the family relationships.

I would probably say a few things, like:

  • you don't earn enough to cover your costs or repay loans
  • you are borrowing to cover your costs
  • once your lenders see you will never be able to repay, they will no longer lend to you and want their money back.  That means they will go after the house.

There is a lot of pride associated with living in your own house, which may be a huge reason they don't want to sell.  But if they may be forced out by creditors, it would be much less embarrassing to preemptively sell, tell their friends and neighbours they are cashing in/moving to a carefree condo lifestyle, and save face that way.

I'm sorry your family is going through this. I think you are a great (adult) kid, to do so much to help your parents. Hope this weekend goes well!

frugaldrummer

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Is there any possibility of them refinancing the house?  If they could bundle all of their debts into a new mortgage (including repaying you!) it might keep their monthly payments under control (although decreasing their long-term equity).

Of course, their income is so low, they might not qualify for a larger loan.

nyxst

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Of course, their income is so low, they might not qualify for a larger loan.

Exactly... I'm not sure how their credit score is survivng, but I know they are nearly or totally maxed cards and some bill juggling happening, meaning skipping paying things some months. Between that and their small income level I highly doubt they can refi... Still, it is an option that we can discuss, so thank you!
« Last Edit: April 10, 2015, 08:17:24 PM by nyxst »

nyxst

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I'm sorry your family is going through this. I think you are a great (adult) kid, to do so much to help your parents. Hope this weekend goes well!

Thank you. I really want them to succeed.. I know there is no easy fix, and I feel like I have a good list of viable options that they need to look over. Its a really tough topic, but I feel like if I don't try to do something now, and really stand firm that they make changes now, it will cross the line into almost unfixable very soon. 
I feel bad for them.. My mom just wants people to help them by lending money... My dad is a proud man, and he tried to ask his brother for a loan but couldn't get the words out and ended up just small talking and then hanging up. 
If they make changes and can show a lot of progress, he can start feeling better about their position... Maybe if they get on track and moving in the right direction, he will be proud again.. His brother isn't close, but he's got money and could help them out, but at this point, my parents would basically be asking the brother to shovel cash into a burning building.... My $6500 already went up in smoke.... 

nyxst

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However, I feel much more strongly about making sure I never put my own children in the dilemma of "Help mom? Or help myself?" I never, ever want my kids to have to worry about my finances.


I know that mindset.... Most of the reason I save so much is so my kids wont ever have issues with worrying about supporting me....
My oldest is 16 and I think its a good lesson for her to see... She sees that they are so unhappy... She got a little job after school a couple days per week and saves her money and even opened a Roth, so maybe she will be able to retire early and enjoy life.
Its a good lesson for me too, since I've learned basically everything NOT to do by watching my parents :) I swear my moms ideas are so terrible sometimes, and she is so sure of herself.... I argued for a week with her about getting the HELOC.... It was a bad idea because it was just a patch and they didn't fix the spending/income that caused the credit card debt... She was sure that it was going to fix everything and she wouldn't listen.  It's probably because I'm a kid in their eyes still.  Im just hoping I see a chink in the armor this weekend and get them to see the light.

MsGuided

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Your parents are fortunate to have such a responsible and caring child. I admire your commitment to do whatever you can to help them right their ship. And I hope your efforts impact their poor habits and decision-making. But I'm not very optimistic they will be willing to take your good advice. If they continue on the path they're on, it's not a pretty picture and, I'm sure, as an only child especially, being their financial woes worsen will cause you much stress and heartache. As you said, at least you'll feel reassured that you did everything you could.

I would write off the loan you gave them as a gift/loss. And unfortunately, from my own experience and other similar situations I've observed, when it comes to helping family financially more times than not the adage "no good deed goes unpunished" rings true. They will likely be angry if you won't loan them money anymore, but that's a boundary you need to hold firm I believe. Loaning them money you need to use for other vital purposes will just prolong the inevitable unless they change something drastically. So you wouldn't really be helping them at all and you'll surely grow to resent it.

Both my and my DH's parents are elderly and not in the best financial shape.  We've helped my parents and I anticipate both sets needing help in the coming 5 years. Not looking forward to that at all.  I wish you the best and commend your integrity.

mozar

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Unfortunately I think the best thing would be for you to step back and stop making suggestions. Things are probably not going to get better, and definitely not at your suggestion. You may find that once they realize you are not going to bail them out, they will suddenly become resourceful.
And this is why we all pay into social security. It's an anti-poverty program for people like this.

Rural

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Are you paying your mom market rate to watch your kids? If not, they're subsidizing you at their expense. Even if they want to do it, they can't afford it.

nyxst

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I have looked up market rate and I'm pretty close and likely over-paying her. If I payed a daycare for half a day ( my youngest is in half day pre-k) it would be $350 and for after school (2 hours for my son) I would be paying $250. I pay her $600 per month, but I also pay her when they have no school and I take time off of work to be with them (I pay her over the holiday breaks and during my vacations...) and half of the time she leaves the kids at my house after school with my teen daughter babysitting.... (A large part of the reason I had my teen set her work schedule to right after school, so my mom couldn't take advantage so much...) So I think I am actually overpaying her.

nyxst

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I'm so sorry you're dealing with this. My MIL just called -- last night! -- and asked my husband for a substantial "loan."

I hope this all works out for your family!  Its so hard to say no sometimes :(

rjack

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You have received some excellent advice already. I think you should have one or more conversations with your parents ASAP. However, you should realize that getting your parents to see reality more clearly is very difficult because of their egos and fixed ideas. Some people hate change.

If they have an issue with you (their child) giving advice, then you may want to offer to pay for a Personal Financial Adviser to meet with them. This would be the last ditch thing that you would try before you accept the fact that it is beyond your control. You have done everything that a good child should do for his/her parents.


Pigeon

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I have looked up market rate and I'm pretty close and likely over-paying her. If I payed a daycare for half a day ( my youngest is in half day pre-k) it would be $350 and for after school (2 hours for my son) I would be paying $250. I pay her $600 per month, but I also pay her when they have no school and I take time off of work to be with them (I pay her over the holiday breaks and during my vacations...) and half of the time she leaves the kids at my house after school with my teen daughter babysitting.... (A large part of the reason I had my teen set her work schedule to right after school, so my mom couldn't take advantage so much...) So I think I am actually overpaying her.
Chances are excellent you would be paying a standard daycare for these vacation times times, too. You pay for a spot with most places. They have staff to pay whether or not you choose to have your kid there. Even the in home daycares around here operate that way.

Zamboni

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You are doing your very best and I commend you for that.

Taking a gigantic step back, it makes no sense to me that an elderly couple making $38K a year (say $44-45K with what you are paying your mom right now, but you won't be paying her that next year) live in a $300K house that is not paid off. Between the first and second mortgages, the bank is the majority owner of this property. It would really be a stretch for them to qualify for a mortgage on a house in this price range if they were young and just starting out with a huge amount of time to pay down the mortgage.

So it's not a surprise that they can't cover all of their bills.  The mortgage has become a trap that severely limits their options. The mortgage on this particular house probably has always been a trap but the closing trap claws are finally cutting into their flesh.  "Predatory lending" and "slave to the mortgage" are phrases for a reason. The HELOC was just them falling deeper into the bank's snare, and you tried to warn them but they don't want to listen. Because they can't possibly pay off their debts on the home before retirement, and social security checks will be low particularly if they start to draw at 62, then they are in fact effectively renting from the bank while paying all of the maintenance, insurance, tax expenses with the illusion of home ownership. How long have they lived in this house? 

I agree with other posters:
Unless your mom is willing to start working full time to keep them in the house while paying off other obligations (which doesn't seem likely from what you are describing), then they need to sell the house soon while they still can.

I honestly will be surprised if they will even consider that, though. Proud and stubborn often go together. Both traits can be huge positives in some situations and huge negatives in others.

Stop giving them money that you need to feed and educate your little ones.  Unfortunately I don't think they will listen to your advice.  I guess you can try this one last time, but after that probably best to keep the lips zipped and the purse firmly closed.

GizmoTX

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Paradoxically, the more you "help" your parents with daycare & "loan" payments, the less they will be inclined to help themselves.

I agree that the only real choice they have is the timing of selling their house. Do it now, & they have the opportunity to be debt free with far lower expenses & head held high. Do it much later, & they will be ruined financially & emotionally.

They need to absolutely understand that you will not sacrifice their grandchildren to save them.

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The phrase I had to use on my family member was "...you can't go North until you stop going South". 

Miss Prim

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I feel for you!  I am having a hard time with my parent's also.  My mom is bound and determined to spend every last dime she has on fixing up her house when it doesn't need fixing.  My dad has dementia and she wants to spend the money before they take it away if he has to go into a nursing home. 

She will not talk to me about finances and tells me that if my dad dies, she will not be able to afford to live in their house.  I told her that her house is the cheapest place she could possibly live and she should be saving her money to insure she could stay there if my dad were to die first.  I also told her to spend her money on having someone come in to watch my dad for a few hours so she can get out and do stuff.  She did not appear to listen to me, but then she told my daughter that she was doing that like it was her own idea!  Parents! 

They live 3 hours away and my mom will not move from there as she has her friends.  Honestly, I don't know what she expects to happen and she will not plan for the future.  I have gone out of my way to make sure she has had vacations with us at my expense, but she forgets about all that and fights with me about her finances.  She brings up the fact that she took care of my grandma, but that is not true as we lived in my grandma's house and my grandma did all the cooking and my mom went back to work.  My grandma only needed taking care of for the last 6 months of her life and then she died.  We all lived with her for 14 years!  Selective memory I guess!

The bad part is that we always had a great relationship until the last few years.  Now all we seem to do is fight. 
I just can't see it getting any better.

Sorry to vent on your thread, but I am very troubled by all of this.  I wish you the best of luck!  Dealing with parents finances can by a nightmare.

                                                             Miss Prim


olderone

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...promised that they would give me their tax return.

.... they are expecting a $4000 return.  Turns out they OWE $1500, because my mom got Obama-Care insurance and took a premium discount that she didn't actually qualify for....

...$38,000 per year income.

The above doesn't make sense to me.  $38k is less than the obamacare cliff so she should qualify for subsidy.   Even if it turned out she didn't, there is a limit on how much of the premium discount they can make you pay  back and it is way less than $5500 at that income level.  I would recommend taking a look at their tax return and comparing it to the prior year.  It's possible it was prepared incorrectly or worse that they aren't being honest with you. 

Also, they need to look up exactly how much social security income they qualify for. 

nyxst

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I sat down with them for two hours this morning. You are all probably right, nothing is going to change. My mom just kept telling me that she already knows how to fix it all, and my dad is stubborn and resistant to change. I did my best.
I gave them four alternate budget options with different sets of changes they could make... I set them up with weekly spending envelopes. I painted a picture of how things will look down the road if they don't pull a 180 right now. 
I felt like I was talking to a pair of teenagers the whole time :( especially when I told my mom to shread the credit cards. She grinned. And then I told her to remove the numbers from amazon, too, then she frowned... And they I told her I'd look at her statement every month and she looked angry.... So, she has no real intentions of stopping.
I used a lot of suggestions from you all and THANK YOU for helping me hash through it before I brought it to them! I did tell them that I am out of cash and any future income will be for my and my kids education, so there will be no more help from me.  I told them if they don't change and end up losing the house, they can sleep on my couch and I will feed them and they would never be homeless....  They seemed genuinely thankful for that.
They are adults. I don't have the time or the energy to do more for them. I put a lot of time and effort into the budgets and lists and suggestions and I left it all with them in a little packet.  Now I try my hardest to look the other way and accept the choices they make.

nyxst

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The phrase I had to use on my family member was "...you can't go North until you stop going South".

FYI, I stole and used these exact words :) thanks!!!!

nyxst

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@ olderone: I looked at their tax return. I think that they set it up to have a lot per month (and didn't pay enough taxes) AND said they would make less than they did (making them qualify for less of a subsidy for health insurance). It looks to be correct, and perhaps they knew they weren't getting a return and lied to me to let me think they'd pay me back soon, but I prefer to think that they just didn't understand and really thought there would be money. Either way, all water under the bridge now. Thanks for suggesting I take a look!
« Last Edit: April 12, 2015, 08:04:57 PM by nyxst »

nyxst

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  Honestly, I don't know what she expects to happen and she will not plan for the future.


Yes... This is exactly the problem. My folks won't step back and look at the whole picture. Every choice they make is to put out the little fires that come up, but they never acknowledge the the whole building is burning... My parents are 57.... They likely and hopefully have another 35-40 years in them... I just don't want to see them miserable that whole time... Or living on my couch for any of them.... Good luck to you!

GizmoTX

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This is so sad. My brother was also completely opposed to any change, but of course it came anyway. I'm sure he would have loved to move in with us -- no way. You've done what you can, & perhaps they will think about it.

okits

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Nyxst, my heart goes out to you.  You've done your best.  If they spend themselves into the poorhouse hopefully whatever social safety net that exists will keep them housed and fed.

Here's where some good may come of this situation: when your teenaged daughter asks, do not conceal the truth of your parents' financial situation. Let her know they are loving, caring people but they have overspent, borrowed, failed to plan, and exercised insufficient discipline to have healthy finances.  She'll see how much it sucks to be broke and approaching retirement.  Sometimes an example can be a powerful teaching tool.
 
It sounds like you can ill afford to lose the money you lent them.  I hope you can recoup some and that no emergencies come up.

Zamboni

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Glad to read you tried today. 

Now just hold fast to your resolve to not give them any more money.

nyxst

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Sometimes an example can be a powerful teaching tool.
 .....
It sounds like you can ill afford to lose the money you lent them. 

Yes, I am using this as a tool definately! My teen has a good head on her shoulders, but is extreamly artistic and sees similarities between my mom and herself. She started saving for retirement already :'-) and I've told her before if she starts early, she will find herself in a position where she can do ANYTHING SHE WANTS with her time, because she won't be a slave to a job. She will learn from this. 
My son is 9, but he is a math kid... Wants to be an aerospace engineer (or a baseball player... :) love it!) And he loves to check his savings account every month... He is jealous that his sisters is going up steadily while his is relatively stagnant, and he is always looking for ways to make a buck.
 My youngest is 5 and the jury is still out on her :) probably a future paleontologist, judging from the holes I need to fill in in my yard all the time :) she lectured my mom for using her credit card yesterday at the pharmacy.
I believe the truth is crutial and good things dont happen if you arent living rooted in truth... my kids will be fine! My parents.... Not so much.

I will build the emergency fund back up. Not too worried about that! Slow and steady...
« Last Edit: April 12, 2015, 09:21:32 PM by nyxst »

rjack

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You have done all that you can. You should really good about that!

Some people won't change until they hit rock bottom. Maybe that won't happen until they are evicted from their house.

No matter what happens, you must refuse to give them any more money. Giving them more money is like giving a crack addict more crack - it hurts more than it helps.

KBecks2

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The number one thing that you have to do is cut them off from any more "loans" from you.  You are done with giving money because.. you can't afford to give them anything, you are tapped out.

They have to figure it out from here. 

Dave Ramsey gives awesome, advice for people in screwed up financial situations.  See if they will listen to his podcast or call in to his show. 

Your parents need some hope.  They also need to make a budget and see what they are dealing with.

You need a little space and some boundaries. 


KBecks2

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We actually just had the oddest will / estate meeting with my in-laws.  They went over the will but did not share at all what assets they have available.  We only know they have something.   

Parents are weird.  Hang in there! 

mtn

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Not sure if anyone has mentioned it prior to Kbecks, but Ramsey sounds like it may be your best bet.

nyxst

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Thank you! I will look at it. My mom is very anti-religious and from what I've seen of Ramsey, he has religious undertones at the very least... My dad, on the other hand is very religious, so maybe it could get through to him... Thanks!

mm1970

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I sat down with them for two hours this morning. You are all probably right, nothing is going to change. My mom just kept telling me that she already knows how to fix it all, and my dad is stubborn and resistant to change. I did my best.
I gave them four alternate budget options with different sets of changes they could make... I set them up with weekly spending envelopes. I painted a picture of how things will look down the road if they don't pull a 180 right now. 
I felt like I was talking to a pair of teenagers the whole time :( especially when I told my mom to shread the credit cards. She grinned. And then I told her to remove the numbers from amazon, too, then she frowned... And they I told her I'd look at her statement every month and she looked angry.... So, she has no real intentions of stopping.
I used a lot of suggestions from you all and THANK YOU for helping me hash through it before I brought it to them! I did tell them that I am out of cash and any future income will be for my and my kids education, so there will be no more help from me.  I told them if they don't change and end up losing the house, they can sleep on my couch and I will feed them and they would never be homeless....  They seemed genuinely thankful for that.
They are adults. I don't have the time or the energy to do more for them. I put a lot of time and effort into the budgets and lists and suggestions and I left it all with them in a little packet.  Now I try my hardest to look the other way and accept the choices they make.
How old are your parents?

Because I have seen this exact kind of action from many people when they get older.  Usually not until the 70's or 80's, but sometimes earlier.  It's the "FU I'm old, I can do what I want."  And it is like having teenagers again.   I saw the frustration in my in-laws when my FIL's parents hit that point.  They were trying to help them with their finances but the grandparents were resistant.

(Grandparents had savings, but didn't want to spend them.  They expected my in-laws to clean their house and mow their lawn, etc.  My in laws bought the house for them to rent, and said "pay a local kid $20 to mow the lawn."  That's an example.)

In any event, you have to stop loaning them money.  As long as they have an "out" they won't make difficult choices.