Author Topic: Helping out a family member  (Read 3642 times)

dbunny

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Helping out a family member
« on: November 05, 2014, 11:36:35 AM »
Hi everyone! I apologize in advance if there is already a thread for this, I couldn't find one and this is my first post so I will claim ignorance here :)

I am looking for advice on an issue I'm having. My husband's mom is constantly in financial turmoil. I mean, she seriously can't get her act together. But not to give off the wrong impression, she is a wonderful human being and a huge part of my life, but her financials are a mess.

She has been looking to buy land in order to build a house and become stable, which I applaud. In the process of looking for some land, she had many unexpected (sort of) emergency expenses come up. I say sort of because they were going to happen, like buying an old car with almost 200k miles on it and then being surprised when the engine fails. Therefore, her land hunt is put on hold for an indeterminate amount of time.

My husband really wants to help her, and I completely understand. She did everything to raise him (by herself) and made sure he always had everything he needed, even if she had to work two jobs to do it. The land she wants isn't too expensive (~15k) and my husband really wants to buy it, and one day it could be an investment for us considering how land in this area increases in value. I support my husband's decision if that's what he wants to do, but I also want to be realistic about it. We still have debt: 100k on our home and 70k to student loans. I'm in school and he has a decent job (40k) and we have some cash at the end of every month.

I really want to do something nice for his mom, she does a lot for us and I think she deserves it. I also think that we get what we give in life, and I always want to help people. But to what extent?

This is lengthy, but I really appreciate any advice on this matter. Thank you!

swick

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Re: Helping out a family member
« Reply #1 on: November 05, 2014, 12:08:09 PM »
Welcome to the forums :)

Has anyone say down and figured out exactly how much it would cost to build on this land? Are there services connected and/or available?

Where is the money going to come from to build? Will his mother's income cover the costs? Does she have anything saved?  Is this just an often talked about dream, or has someone come up with actionable steps, a timeline, and budget? If her finances are a mess, as you state, how will she ever get the money to actually build the house?

From your post it sounds like she reacts to instead of plans for the future (example with the car)

Is the cash you have left over at the end of the month AFTER you have contributed to your retirement savings? What % are you paying on your student loans and mortgages. What are your career prospects like after you finish school? Are you going to be staying in the area? If you have to move for work, would your MIL still want to build a house in the same place? There are A LOT of unknowns.

You have a BOAT LOAD of debt - what is your plan for paying it off?

My honest opinion, without having all the numbers, but from what you have said, is you can't afford to buy this piece of land at this time. The best help you could probably give his mom right now is sitting down together and figuring out a financial plan for all of you (depending of course, on how close your relationship is) 

Put all the info out on the table, and see if you can come up with a plan to make it happen. Realistically, it might be a 10-15 year plan or longer - but you would have the action steps and idea of costs you would need to make it happen. In any case you will find out quickly if this is something she cares about to make it a reality, and what steps would need to happen as far as saving money, getting credit repaired etc.

It is totally understandable that you want to help your MIL out, but there are alot of things you have to consider first. Good Luck!

MrBuckBeard

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Re: Helping out a family member
« Reply #2 on: November 05, 2014, 12:20:15 PM »
I'm going to assume you don't actually have $15,000 in liquid assets, considering the $70k student loans and the mortgage payment.  If that's true, then getting the 15k means either saddling yourself with debt, or taking money out of your retirement.  And honestly, if I had a child who did this to get me some land, I'd feel very badly about it.  Happy, sure, but also bad about what was done to get me that.  Worse, when it's done it's done, so if she felt bad, she really couldn't just say "no" because it's a done deal.

Thinking about helping her out is a good thing, by the way.  I dig it.  So maybe brainstorm and see what else you can do, short of coming up with $15,000.  Maybe even just think small.  More like this:

Go to the grocery store.  Pick up some fresh groceries.  Take them over to Mom's.  Now, cook a meal for the three of you, right there in the kitchen.  Quality time, a meal, and when you're done, leave the groceries.  Tell her you'll come back soon to cook up another meal. 

This gives you time together, which is priceless.  And it means she won't need to buy groceries that week, which helps a little with finances.  Maybe it's not 15k.  But it is good.

Frankies Girl

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Re: Helping out a family member
« Reply #3 on: November 05, 2014, 12:47:14 PM »
Buying land and building a house is one of the more expensive moves you could make. Not sure why any of you thinks this is a good idea - especially since none of you actually have the money to even buy land. You and your husband have extensive debt!

In my opinion, the best move for your MIL would be to rent - for the foreseeable future or possibly forever. She doesn't have the money to buy and maintain a property, let alone build, and if she was a renter, then anything that needs fixing or replacing is paid for by the landlord. So right there, she will never have to worry about the toilet leaking or the windows needing replacement. All she'd ever have to deal with is the rent and renter's insurance which is way more doable for someone that doesn't manage their finances well. 

I have no idea why your MIL wants land and to build a house but it will be a HUGE debt and require more than average maintenance - this will be the exact wrong move for her to become more stable! Building a house takes way more involvement and cash (as there are ALWAYS extra things that come up during the building process -  and hey, you'll be paying for the current place to live WHILE the new place is being built - so maintaining two houses? - not be good for someone that doesn't have a good cushion of money to pay for things as they come up.

southern granny

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Re: Helping out a family member
« Reply #4 on: November 05, 2014, 03:31:04 PM »
If she had fallen on hard times and her house was about to be foreclosed, I would say give her the money.  But in this case, I would have to vote no.

Greg

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Re: Helping out a family member
« Reply #5 on: November 09, 2014, 10:17:56 AM »
Buying land to build on in the future is not how you become financially stable.  You have to get financially stable first, then do the land/build thing.

A better help would be to sit down and help her figure out her budget.  She deserves that, not a parcel that she may not be able to keep.  Taxes etc. can become a burden when you aren't stable.

joshbredmond

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Re: Helping out a family member
« Reply #6 on: November 09, 2014, 10:25:42 AM »
Get her an RV

Villanelle

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Re: Helping out a family member
« Reply #7 on: November 09, 2014, 10:28:24 AM »
It sounds like the best give you could give hr would be to help her look at her finances, set a budget and stick to it, find ways o save, etc.

Building a house is probably a horrible idea, financially, and she isn't in a position to be able to indulge ideas that don't make financial sense.  Neither are you. 

Helping her buy land and build a house is just enabling her to continue to make poor financial choices, and it's a poor financial choice on your part, too.

An entire weekend spent going through her finances, calling insurance companies to find ways reduce payments, helping her figure out ways to save (cranking with heater down 2 degrees and wearing warmer cloths), getting her a cheaper cell phone plan and canceling her land line, calling her CCs and inquiring about lower interest rates or helping her find 0% card offers, finding stuff to sell on ebay or Craisglist and creating the listings for her (and offering to work with the buys if you are local), and generally cleaning up her financial house, is a far, far better way to help her.  Throwing money into the black hole of her finances is not. 

If she wants to truly improve her situation, those are things she will appreciate.  If she doesn't, then nothing you do will help her and you'd just be throwing good money after bad, and in this case it's money you don't even have.
« Last Edit: November 09, 2014, 10:31:31 AM by Villanelle »