Author Topic: How to help my irresponsible parents?  (Read 7793 times)

anastrophe

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How to help my irresponsible parents?
« on: December 24, 2013, 08:44:09 AM »
My parents have been living paycheck-to-paycheck since forever and their situation seems to be getting worse: my mother recently had a 4 week gap of unemployment in which they used up their entire buffer, and they are still paying the oil company for last year's heat. I'm scared that if things get worse for them they could lose their house or worse, and I want to help.

They have not asked but it's so hard to watch them struggle and I feel they are somewhat my responsibility. I'm not willing or able to help them financially but I'm hoping I can teach them some better habits before they retire. They are good people, generous and kind, they've always been there for me when I needed them. And I'll be honest: the way things are now, the trainwreck of their financial situation keeps me up at night.

They are in their early 60s and in moderately good health. My father probably makes $40-55k, but his workplace is unstable and at his age I imagine he could be forced to retire if things get rocky. My mother is a nurse and works for several per diem type visiting nurse companies, I have no idea what she makes but she can usually find work easily. They have no significant assets and no retirement savings beyond SS as far as I know. They live in a semi-rural area and own one older car and a small house that they bought about 20 years ago--I imagine they still make payments for both and the house needs work. They are still paying off old credit card debt but I think they have stopped running it up.  My mother has a few expensive consumer habits and tithes generously to her church. My only sibling, who is severely disabled, lives with them. She receives SSI and they take some portion to cover her expenses, but I expect this is a net loss for them as she is also learning my mother's habits. (That's a subject for another post.) That's all I know offhand.

I've offered to help my dad set up a budget. Apparently they have never done so before. I pointed out that it's a good way to plan ahead for bills you can predict, like, you know, heating oil. He said "that might be helpful." *facepalm*.

I'm not sure where to start, though.
  • They are perfect for YNAB but they are not very computer literate so it would probably need to be a paper budgeting system. How does that work? Do I ask him to bring statements and then copy them into a ledger or something?
  • How do I involve my mother in the process? Should I even try or is that getting too involved in my parents' marriage? She's a conservative Christian so I thought Dave Ramsey might appeal but anything I should be wary of there?
  • Lastly, is this totally futile and am I setting myself up for headache and heartbreak?
Any other ideas or cautions would be much appreciated.

Greg

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Re: How to help my irresponsible parents?
« Reply #1 on: December 24, 2013, 09:16:30 AM »
Whew, I anxiously await more responses. 

My first thought was about their house; perhaps their electric utility can help with some insulation or something.  Maybe not since they're on oil heat.

Another thought is many utilities can set up a budgeting plan for their particular bill; by averaging the use over the year and adjusting the bill to an average amount.  We do this with our propane and it really helps.

Another Reader

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Re: How to help my irresponsible parents?
« Reply #2 on: December 24, 2013, 09:19:46 AM »
Dave Ramsey is your best bet.  Your mom will get decent money management advice from someone with the same religious philosophy.  And DR hates debt, which your folks need to learn as well.

MissStache

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Re: How to help my irresponsible parents?
« Reply #3 on: December 24, 2013, 09:34:53 AM »
Can you make some paper monthly budges for them to fill out?  Just whip something up on excel that has spaces for bills, food, shopping, house, etc.  They can go through bank statements for the last few months to see where they are spending.  Since most people have no idea where their money is going, just something as simple as a budget can make a big impact on their habits.  It will at least show some good places to start!

frugaldrummer

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Re: How to help my irresponsible parents?
« Reply #4 on: December 24, 2013, 09:41:13 AM »
Wow - sounds like your parents should be able to be doing better than they are, so most likely consumer spending is the problem.  This is good, because it also means it is a problem that can be solved.

Dave Ramsey would be a good start - I don't personally agree with his politics, but he's a good motivator.  You might want to give them a book or, if they aren't readers, see if he has a video DVD or some such.

You said they weren't very computer literate, so as far as budgeting goes, they need the envelope system. (Easy to do with cheap paper envelopes, but Dave Ramsey does sell fancier versions for, like, $10).  This worked well for me all through my twenties - you pay your big fixed items (like mortgage etc) by check.  Deposit a fixed amount into a savings account for bigger items that are variable or episodic.  Take the rest (or the amount you have budgeted for living expenses after savings) and divide it into envelopes by category.  I put groceries in weekly envelopes, gas could be weekly or monthly, entertainment was monthly, clothes monthly etc. 

What it is great for, is you get to the end of the week, look in your food envelope and see you only have $10 left, so you go "Hmm, guess I'll make beans and rice".  Keeps you from getting to the ned of the month with no groceries.

Same for entertainment.  If you've only got $30 left in your envelope for the month, you might have to choose between dinner out OR a movie - not both. 

With your mom's irregular income, it would be great if they could budget to pay their daily living expenses out of your father's income, and save mom's income for those irregular expenditures, retirement savings, or paying off their mortgage.

I know it's difficult to get adult parents to sit down with you and discuss finances, but you might have an "in" to this conversation by discussing the care of your disabled sibling.  What happens to them if your parents die?  Do your parents  have a will, life insurance?

You'll need to address this in positive terms - in terms of how great it will be not to be stressed about money, to be able to retire, etc.  Right now I suspect your mom is spending money to make her feel "better" about things, so you can't just yank that away and put her on a budget, without giving her something positive in return.

In Your Money or Your Life, they advocate making a big wall chart, updated monthly,  showing the intersection between dwindling debt and growing savings. 

ender

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Re: How to help my irresponsible parents?
« Reply #5 on: December 24, 2013, 10:38:37 AM »
Your parents are the exact financial situation Dave Ramsey's Financial Peace University is targeted towards.


anastrophe

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Re: How to help my irresponsible parents?
« Reply #6 on: December 26, 2013, 06:40:07 AM »
Thanks for the suggestions. I will try to get my mom going on Dave Ramsey and sit down with my dad and a paper budget worksheet.

I'm not sure the envelope system will work, logistically, since they use debit cards mostly (hard habit to break) and there are two of them, but I'll give it some thought.

I know it's difficult to get adult parents to sit down with you and discuss finances, but you might have an "in" to this conversation by discussing the care of your disabled sibling.  What happens to them if your parents die?  Do your parents have a will, life insurance?

This is a good point and I have tried to have this conversation with them before but it's been a non-starter ("I don't want to think about that, it's too morbid!"). Time to try again, I think.

ender

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Re: How to help my irresponsible parents?
« Reply #7 on: December 26, 2013, 08:45:40 PM »
I'm not sure the envelope system will work, logistically, since they use debit cards mostly (hard habit to break) and there are two of them, but I'll give it some thought.


A way I've seen some do this is with color-coded debit cards (tape on top of card) for different checking accounts, which correspond to different budget categories.

It functions somewhat like an envelope in that you can transfer money to each account at the beginning of the month and it limits your spending. Drawback is you lose the very physical and obvious "almost out of money" notification.

anastrophe

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Re: How to help my irresponsible parents?
« Reply #8 on: January 06, 2014, 08:02:17 AM »
I had my first talk with my dad and it turns out things are much worse than I thought. They are carrying debt on both credit cards and a home equity line of credit, are behind on their property taxes, and owe $ to the fuel company.

Who the f*ck lets themselves get into that kind of situation??! They have jobs for f*ck's sake.

I ordered the full Financial Peace University kit on ebay and will see if I can get them to do the program, I think they are interested. Not sure what else I could do.

Villanelle

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Re: How to help my irresponsible parents?
« Reply #9 on: January 06, 2014, 08:08:31 AM »
Sounds like it might be time for something more drastic.  Would they be open to selling the house, paying off all debts, and moving to something smaller and cheaper (and less costly to heat)? 

I'd be helping them find a realtor.

anastrophe

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Re: How to help my irresponsible parents?
« Reply #10 on: January 06, 2014, 08:23:30 AM »
Sounds like it might be time for something more drastic.  Would they be open to selling the house, paying off all debts, and moving to something smaller and cheaper (and less costly to heat)? 

I'd be helping them find a realtor.

I don't think that would help. The house is small, older, in rough shape, and in a "less nice" part of town. The only thing it has going for it is a couple acres (of undevelopable land) and proximity to a good school. But there are roof issues and foundation issues that would need to be addressed before selling. If it was worth more, I'd definitely agree, but as it is I think it might make things worse.

I did push for them to get an energy audit, though. I'm sure there are not just holes in the budget where the money leaks out.

Fred123

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Re: How to help my irresponsible parents?
« Reply #11 on: January 22, 2014, 10:07:15 PM »
Dave Ramsey is your best bet.  Your mom will get decent money management advice from someone with the same religious philosophy.  And DR hates debt, which your folks need to learn as well.
+1. And in the back of his books (at least in Total Money Makeover) he gives paper budgeting forms that they can use

i love DR on the radio, and his car-buying idea is worth a lot.  However, I was surprised to find that when you go to his local reps, they sell 5% load mutual funds!  Yikes!

Greg

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Re: How to help my irresponsible parents?
« Reply #12 on: January 23, 2014, 09:19:27 AM »
Maybe they can get their mortgage to include an escrow payment for the back taxes.  It takes a while to add up but it can really help people get caught up.

Maybe some garage/yard sales to reduce clutter and generate some cash to put toward the credit cards.  And try to get them to realize they need to cut up the cards.

If there's anythng available on the HELOC and the interest is lower than the CC's, use it to pay some of the CC's down or the fuel bill, which ever is worse.