Author Topic: Help! Converting Spendthrift Parents  (Read 3636 times)

Hey It's Me

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Help! Converting Spendthrift Parents
« on: January 05, 2015, 11:17:08 PM »
Hi everyone,

Hope you're well. (My apologies in advance for the long post.)

This topic is created as an attempt to glean the wisdom of the community in tackling problem I've been having. I'm a college student (finishing up undergrad) and live with my parents. They are, unfortunately, incredibly spendy and save little to nothing.

Here are the details:
  • Parents: Dad (52), Mom (42)
  • Dad works 60+ hours per week; Mom ~ 40 hours per week; both low-paying jobs (we immigrated here 17 years ago, and are now residents, but they're stuck in their low-paying jobs.)
  • Combined monthly income (net): $3370 + ~ $400/month contributed by me currently = $3,770
  • Savings at the end of the month: usually nothing

I can list out some of our top expenses, but this is less a thread about cost-reduction advice, and more a question about how to get parents (who are psychologically stuck in the consumer mind-set - i.e. $200 extra income = $200 extra spending money) to start saving.

  • Rent: $1200
  • Electric/Gas: $220
  • Phone: Paid by me (outside of the monthly income above, so this is free to them, $135 for me)
  • Internet + home phone: $100
  • Cable (no one even watches, but they won't cancel! Ugh): $95
  • Netflix: Paid by me
  • Car insurance: $220 (thinking of buying another car, even though dad works ~3 blocks away)
  • Gas: ~$100
  • Laundry (5 People): $90
  • Total: $2,025

Even with this insane spending level, we should have $1345 left over each month for household toiletries (TP, Toothpaste, etc.) and food, but they literally spend that amount somehow each month. I've tried to introduce my mother to Mint, but she doesn't feel comfortable putting her bank statements on an outside website (though I think this may have more to do with not wanting transparency in her spending.) Much of this goes to ordering food - often when there is a home cooked meal left over from the day before (SO much food in our house goes to waste - it's revolting) - and random purchases (we invested in a $45 knife set last week that's still in the box because our utensil cubby is full of knives, spoons, and the like.)

I love them, and they're honestly the most hardworking people I know (classic hardworking spendthrifts - HWST!) My dad has worked 17+ years at 60-70 hours per week. I expect to be supporting them in their old age (after all, they gave up a comfortable life - dad was in the law field - to come here and worked their butt off for me and my siblings), however their spending habits definitely concern me.

For one, they often argue and money is the underlying reason maybe 75% of the time. Additionally, when it was just my father working, we were broke. Then my mother joined in at 40+ hours per week (the promise was my dad, who's getting up there in years, would be able to take a day or two off a week), and we're still broke - curse you lifestyle inflation. I've also been contributing (and more recently than before), and we're still broke. The challenge is, they don't seem to want to acknowledge its within their power to break the shackles of wage-slavery...

Mustachians of the interwebs: how do I get my parents on board to curbing some of this crazy spending??

TLDR: Parents work like crazy at low-paying jobs, and save nothing due to cray crazy consumer spending. Help!

mxt0133

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Re: Help! Converting Spendthrift Parents
« Reply #1 on: January 05, 2015, 11:51:55 PM »
Financial advice coming from a child is pretty tough to swallow for most people.  They probably still see you as a kid in diapers.  Another thing to consider is if they don't think there is a problem then why should they cut back or change their behavior.  Being "poor" as you describe your family being, has unfortunately made them develop poor financial habits.  I have witness it myself with close family and friends, when you are "poor" you shorten your planning to days and weeks, you can't really think about months or years ahead because your just trying to keep a roof over your head and food on the table today or tomorrow.  So when you get a windfall or a raise you do what you've always done and just spend until you don't have any more left over.

In your shoes, I would definitely try and help but you have to learn how to talk to them in a manner in which they will actually listen.  Is money taboo in your family?  If so then you have to approach it from a different angle, try discussing their health or what would they like to do when they retire.  Basically you have to get them to start thinking long-term and hopefully they see realize that they can't work forever and how that will impact their lifestyle.  Talk to them about their expectation with regard to you supporting them.  It seem like you have already set a precedent because you are helping them, which you should as you are still living with them.  You need to know if they still expect your support have you move out and start your own family.  Again the goal is get them to think longer term, start with next year, then the following year, and hopefully to retirement.

Don't give up.  I did the same with my parents for a few years and then backed off, eventually they started realizing themselves and started asking for my advice about random things.  Once that happened I knew I was no longer a baby in their eyes and was able to expand the conversation.  I got them to review their budget and accounts.  The used to say that I was only trying to help because I didn't want to support them when they get old to get me to back off, but I just kept at it.  Because I knew that if I did nothing they would be in a tough spot and I would not be able to turn my back on them.

Good luck.

cakie

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Re: Help! Converting Spendthrift Parents
« Reply #2 on: January 06, 2015, 03:19:30 AM »
It's great you are pitching in. Don't despair that the money disappears. Once you are supporting yourself, you can show them through your actions both that you are good with money and that it is possible to plan ahead and live on little.

My mum, despite being a professional that owns a small business, is financially illiterate. She grew up poor with equally financially illiterate parents. She relies on me and my sisters to give her advice about these things, though she still gets defensive and hardly ever follows through on our advice.

However, now that she is approaching traditional retiring age, she is getting better. I actually managed to teach her about the safe withdrawal rate the other day! But she only listens when she brings up the topic. The trick is to feed your parents ideas through what you do yourself, eg. having an emergency fund, where you choose to live, how you buy groceries, etc. It sinks in over time.

My MIL we are giving a regular amount to for a little while, because she is similarly illiterate with finances and her current rental is too much. But I convinced her to lower her phone bill and I've almost convinced her to open a savings account at the bank...we will get there! She is on a pension but uses the excess money to give random people gifts -- very frustrating!

Ultimately, it is their choice. Just try to stop them from getting into a real mess (if you don't mind getting into their bad books for a while, yelling might be necessary in emergencies - my sis has done this occasionally and it does work as a last resort). The rest should sort itself out. If they are both working lots they probably don't have the energy to think about these things right now, so don't push it too much.

LadyStache

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Re: Help! Converting Spendthrift Parents
« Reply #3 on: January 06, 2015, 09:16:36 AM »
The car insurance cost looks pretty high. I would start by encouraging them to shop around and look for discounts. Let's say they can save $50/month on their new auto insurance policy. Encourage them to take that $50 and put it into a savings account with automatic recurring transfers set up.

Try to help out with bills less and instead contribute money into a savings account for them for when they retire since any money you are currently contributing is adding to their lifestyle inflation anyway.

Hey It's Me

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Re: Help! Converting Spendthrift Parents
« Reply #4 on: January 06, 2015, 09:54:16 AM »
Thanks everyone, for the solid suggestions.

LadyStache: I like your idea about contributing to a savings account, rather than bills. I'll speak with them and see if that's something they'd like to do.

My challenge is, they still see savings as "deferred spending." That's a long-term mindset, and I'm wondering if there's a way to change that.

Cakie: Thanks for your input - it's reassuring to see others in similar situations with some degree of success. I'll keep pushing them; some of the things I'm going to keep pushing to cut are the complete wastes:
 - Cable (literally no one watches)
 - Excessive Car Insurance (as LadyStache recommended)
 - Gas (we have it to a ridiculous 70 degrees, and I've been stealthily reducing it to 60, haha)

The next step is to get them to save those extra dollars, rather than reassign them. That, again, is a mentality shift that I'm not sure how to bring about.

mxt0133: Thanks for the input! Money is not a taboo topic, and you're right that they are used to thinking in days and weeks, rather than in months and years. The conversation I'm dreading is the support when I move out conversation, not because I fear the results but its just an uncomfortable topic for myself. I know I'll still be supporting them (in the sense that I can provide them extra income each month.) They'd like to move back to their home country for retirement, where the cost of living is much lower and we have a small inheritance property already. As the help I provide them will cover the majority of their needs anyways, I think I'll be able to file them as dependents for tax purposes as well.

If they start savings, they can also help support themselves, which will essentially reduce the burden (for lack of a better word) on myself and my future family. I'll have to work an additional 5-6 years to support a SWR that supports them indefinitely too, though.

LadyStache

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Re: Help! Converting Spendthrift Parents
« Reply #5 on: January 06, 2015, 12:14:53 PM »
Cakie: Thanks for your input - it's reassuring to see others in similar situations with some degree of success. I'll keep pushing them; some of the things I'm going to keep pushing to cut are the complete wastes:
 - Cable (literally no one watches)
 - Excessive Car Insurance (as LadyStache recommended)
 - Gas (we have it to a ridiculous 70 degrees, and I've been stealthily reducing it to 60, haha)

The next step is to get them to save those extra dollars, rather than reassign them. That, again, is a mentality shift that I'm not sure how to bring about.

This should all be 1 big step.

You can say something to them like:

Hey let's cancel the cable and starting next month we can start contributing $95 to your 401(k) (or whatever investment) instead of paying the cable company.

-or -

Now that you're not paying $95/mo for the cable, can you pay for your share of the cell phone bill?
-Then secretly take the $95 they give you for the cell phone and put it in a savings account for them.

Chrissy

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Re: Help! Converting Spendthrift Parents
« Reply #6 on: January 06, 2015, 06:03:51 PM »
How many siblings do you have?  How old are they?  What do they do for a living?

Hey It's Me

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Re: Help! Converting Spendthrift Parents
« Reply #7 on: January 06, 2015, 06:06:14 PM »
How many siblings do you have?  How old are they?  What do they do for a living?

Two siblings. DS is a full-time university student (working towards becoming a doctor), and DB is in his final year of high school. I am the oldest. DS has a part time job (~12hrs/week) that goes towards paying college fees. DB just started working 1 day/week, that money will go towards fees for college. Both DS and I have scholarships that cover 90+% of college costs.
« Last Edit: January 06, 2015, 06:08:18 PM by moe_rants »

Chrissy

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Re: Help! Converting Spendthrift Parents
« Reply #8 on: January 06, 2015, 07:05:49 PM »
Have the three of you discussed your parents' situation?  Are they on board helping your folks monetarily someday?  Will they support your efforts to get your parents to cut back spending?

Would your parents be open to a consultation with a financial advisor who speaks their native language?

My suggestion:  stop contributing money directly to them as soon as you can.  They are like koi fish; their consumption will grow to fit the amount available.  Instead, put the money in an investment account (in your own name) with the idea that the money is earmarked for their future support.