The Money Mustache Community
Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: kjulez_83 on June 17, 2016, 06:16:51 AM
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Hello! This is my first post after discovering and embracing MMM about 4-6 months ago.
Here is the situation I would love some Mustachian opinions on please:
My sister needed a new car due to a break down/reliability issue. Her and her husband owe my parents for a business loan which had $15K remaining. My parents wiped the debt for them as sort of a gift (they are retired, I guess they decided they don't need the money that much and wanted to do something nice) so my sister could by a Subaru Forrester (few years old). They then told me that they have done this for my sister and so to be fair, when we need it, there is $15K for my husband and I. If we don't ever need it then it will be "sorted out in the will"l...Now I hate family and money issues, I wish they didn't cause problems, but they kind of do.
I have (thanks to MMM) recently taken up biking to the point where I have bought an electric cargo bike as a car replacement. So while the bike plus gear will cost me close to $5K, the sale of my current car (when it happens) will mean I am actually up I don't know, like $5-10k. We are working towards FIRE so have a lot of savings and investments and are not looking to get a bigger house or anything. So we may not ever need the money
Does this situation/offer seem unfair to anyone else? I don't want to seem money grabbing or anything but it just kind of feels like welfare, where the better off you are/harder you have worked the less you get. I don't know that family money matters should really be like this? The funny thing is that my mum actually referred to the fact that she didn't want to be unfair because her father gave $10K to her sister a long time ago (which is worth a lot more money now!) and didn't give anything to her. By the time inflation plays a role (plus the fact that I highly doubt this is going to get written into the will) I think this is nearly the same.
Should I say something? Or should I accept it as it is my parents' money to do with as they wish?
Just after thoughts on if I am being reasonable/ unreasonable, should I just let it go? I was fine without this money but when you have an aim of early retirement, $15K compounding on an investment seems like it could be a great help.
Thanks in advance :)
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Well, in your words you don't "need" it so it should be left with your parents and clearly sorted out in the will. Your parents probably have that money sitting in an investment account somewhere which will be compounding interest on it's own and will make it's way back to you in the form of an inheritance. If you say they are retired, your parents may end up "needing" it before you. It is a different story than if your mom just offers you $15k in cold hard cash to do as you wish.
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Tricky, and I think it really depends on your parent's situation.
If they are really, truly loaded and it makes them feel better then take it so that they don't have to worry about sorting out in their will. Even then, I suggest keeping the funds as a sort of "parent EF" in case you need to assist them if their fortunes change later.
If they aren't extremely rich, understand and acknowledge their love for you and your sister. They provided economic outpatient support to her and don't want this to cause troubles within the family. They love you and want to be fair. Don't take them up on it, and don't be surprised if it never gets equaled later. Just reassure them of your love and your ability to care for yourself.
If you don't know their financial situation then this is a chance for you to open up discussions with them on what THEY will need for a long, happy retirement. Which might also lead to gentle conversations about not providing economic outpatient care to others.
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In several situations over the years our parents have helped out DH or my siblings. All of those situations were for specific events (e.g. weddings, first homes etc). On a few occasions it has been offered to us as well to keep things equal but we didn't need or want it. We just dais no, no need and do not change anything in the wills because of it. We don't consider it a competition so we just got on with our lives and don't think of it add them getting something unfairly. It's not unfair. My parents money is their money to do with what they want and I have no claim on it. I know if I ever need help my parents would be there for me for whatever I need - that's all that counts.
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I would tell your parents: We are really in a good place and expect to stay there (or get better) financially. If you want to gift us the $15K because it would make you feel better, or you somehow feel obligated to, I would love to accept it and use it towards my financial goals. But not everything in life is fair, and I'm are just glad I don't need the 15K, so you don't need to even offer it.
This reminds me of my two kids, 5 & 7, that are constantly complaining that one gets more than the other. Like, stuff out of my control, like more days off from school or more birthday parties to attend. I'm so over it. I love and treat them equally, but I'm not going to weigh their desserts so they get the exact same amount. Or give them some sort of cash balance if one of them gets a christmas gift worth more than what the other got. They have to learn to deal with little inequities. And I think 15K is a little inequity in this situation.
Another thought, if you have kids, or plan to have them, putting the $$ in college savings for them might be something that will feel less like you taking it, if you end up accepting the money.
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Thanks guys!
They are not really loaded but very comfortable.
I think you are right Rezdent (and very wise!), it probably is one of those things that will get sorted out in the wash anyway I suppose. Like they might give it to me now and I will invest it and let it grow then one day something bad might happen that sees them without enough money in later life (very unlikely but who knows, shit happens!) that I need that money to look after them. Or I never need it and then get money at some point in which I would much, much rather have them here than their money.
I think I am just going to continue to live my life as though this event/these conversations never happened. I will just take the approach: "my sister got some money and maybe one day I will get some money, maybe I won't. That is all".
Yes wtw, that is very true. I am doing fine without the money and should be happy I am in a position where my car breaking down doesn't cause a huge financial strain in my life.
This is basically what I was looking for, just some perspective. Thanks again for your input everyone.
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It sounds like your parents are trying to be fair. Are they really set on holding onto it until you need it desperately or are you perhaps assuming they have the same mustachian definition of "need" as you do? Maybe I am missing something but it doesn't sound like there's any reason for you not to say something along the lines of "Would you consider having the money transferred to us now? I have an incredible investment opportunity and need [$ anount] to optimize our rate?" Or "we are working really hard to change our lifestyle so we will be financially secure in the future. Would you consider giving us the money you promised for something that would further that goal? We know if we do this now we won't need it later," or something else along those lines.
I had a similar situation in my family where I moved out on my own and had to work and take on debt for school and medical expenses, but when my parents and grandparents saw my siblings couldn't handle it, they gifted them some money. I got the same, to make things "equal," but of course after interest and all the stress of being young and in debt things were hardly equal at all. It would have been easy to be bitter but I think I got the better end of the deal, to be honest. I am so much more confident and I had the benefit of making my life plans without counting on the money. I don't think it's a coincidence that I'm the only one with a job that both pays well enough and is pretty enjoyable to me, a house I bought before receiving the money so can sustainably afford, and a spouse I married for reasons other than not being able to take care of myself. I suspect even if you have to wait a long time to see that money (and I'm not convinced that's the case) and it's technically worth less, your siblings will be jealous of you when the time comes because you won't need it and therefore will always have more options than they do.
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It may make some sense for them to gift you the money now, because it's one less thing to deal with in probate/estate or anything like that. They're able to give you and your spouse $14,000 per year per person without any taxes.
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I would tell your parents: We are really in a good place and expect to stay there (or get better) financially. If you want to gift us the $15K because it would make you feel better, or you somehow feel obligated to, I would love to accept it and use it towards my financial goals. But not everything in life is fair, and I'm are just glad I don't need the 15K, so you don't need to even offer it.
This reminds me of my two kids, 5 & 7, that are constantly complaining that one gets more than the other. Like, stuff out of my control, like more days off from school or more birthday parties to attend. I'm so over it. I love and treat them equally, but I'm not going to weigh their desserts so they get the exact same amount. Or give them some sort of cash balance if one of them gets a christmas gift worth more than what the other got. They have to learn to deal with little inequities. And I think 15K is a little inequity in this situation.
Another thought, if you have kids, or plan to have them, putting the $$ in college savings for them might be something that will feel less like you taking it, if you end up accepting the money.
+1. This is exactly what I would do. My parents are very big on fairness and I'm sure would do the exact same thing (wanting to give the 15K).
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Another thought, if you have kids, or plan to have them, putting the $$ in college savings for them might be something that will feel less like you taking it, if you end up accepting the money.
This is a good idea.
I will say that I have an older brother who has gotten much more financial help over the years than I have (he is self employed and takes more risks, which haven't always worked out). It doesn't bother me a bit. It's not 100% equitable, but I know that if I needed it they would help me as well. Thankfully I haven't.
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I feel your pain -- my sister (in her early to mid 30's) ended up single, pregnant and about to be homeless. Mom stepped in, because she wasn't about to let baby sis give birth to her grandbaby in a snow bank, and said she'd help sis with the rent and deposit. Due to inability to find a place that met sister's criteria my mother bought them a house. She's also putting sis through her third attempt at college -- this time for a vocational certification that will lead directly to a good job, which is great, but we're buried in Student Loans, so it feels awkward.
She'd originally thought she'd just let it go and that I should be okay with it. But... I kind of wasn't, if only because we'd had times when we were in really terrible, difficult financial straights and my mother did not come riding to our rescue with her magical checkbook, and it hurt that she does it repeatedly for my sister. She has decided to kick us the occasional check for a couple of thousand dollars, which is great... and I love the fact that she's thinking about things being equitable. But the reality of life is that things aren't ever going to actually BE equal for my sister and I... we've chosen really different life and career paths, and so are going to be in different places financially for the rest of our lives, and that's something she's going to have to cope with.
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I would thank them, tell hem you really appreciate it, and let them put it in the will. I think we need to get over the fact that sometimes parents provide unequal levels of emotional or financial support to their kids. Some kids just need more parental help than others. Is it frustrating when they receive that help because of their own irresponsibility and not due to some valid reason like a disability or emergency? Hell yeah. But it is just the way things are. Try to focus on the fact that you are independent and do not need your parents to give you money. Be thrilled they are so fair minded they immediately offered up a way to give you something too. Your sister may get more financial help but you obviously won the lottery in terms of being financially secure and responsible.
Parents have an obligation to help each child as needed to the best of their ability. They are under no obligation to divide everythung up perfectly equal every time just to prevent hurt feelings. Adult children should be mature enough to understand. My parents gave 2 of my siblings cars right after college. I went to the city after school and did not need a car so I did not get one. Years later I had to buy my own. Technically they got more than me and I got screwed. But I do not think that because the circumstances were obviously different for me. Fair does not always mean equal.
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I feel your pain -- my sister (in her early to mid 30's) ended up single, pregnant and about to be homeless. Mom stepped in, because she wasn't about to let baby sis give birth to her grandbaby in a snow bank, and said she'd help sis with the rent and deposit. Due to inability to find a place that met sister's criteria my mother bought them a house. She's also putting sis through her third attempt at college -- this time for a vocational certification that will lead directly to a good job, which is great, but we're buried in Student Loans, so it feels awkward.
She'd originally thought she'd just let it go and that I should be okay with it. But... I kind of wasn't, if only because we'd had times when we were in really terrible, difficult financial straights and my mother did not come riding to our rescue with her magical checkbook, and it hurt that she does it repeatedly for my sister. She has decided to kick us the occasional check for a couple of thousand dollars, which is great... and I love the fact that she's thinking about things being equitable. But the reality of life is that things aren't ever going to actually BE equal for my sister and I... we've chosen really different life and career paths, and so are going to be in different places financially for the rest of our lives, and that's something she's going to have to cope with.
Why do you even care? Follow MMM, save 70% and you will find yourself with millions that you don't know what to do with. A few hundred K let alone few K is really no big deal.
To OP, take the money, invest it. If your parents ever need the money you will know exactly where to find it (with appreciated value).