Many mustachians will face this situation. We're the minority. Mustachians save, most people don't.
What follows has two purposes: 1) I want to suggest a bit of a harsher approach. Money is not infinite, and if mustachians all have to support non-mustachian relatives, no-one will be able to retire early. I think it's fair for people to make different choices with their money but then live with the consequences. As someone said, liability and control belong together. You can't take on the liability for someone else's retirement if they have the power to squander every dollar they make. 2) I would love some feedback on this harsher approach. I haven't done this yet, haven't had the below discussions with my wife. Does this plan sound like it could work? Or not? Here goes:
In my case, it feels even trickier than people worrying about their own parents, because the problem people are not my parents, but my in-laws (who are divorced). And my wife owes so much in student loans that without me she would have no chance of paying the loans, paying her living expenses, building up her own stash, AND helping her parents out.
So I'm looking at a situation where I would be shelling out my saved-up life energy to retroactively subsidize the leased cars, big screen TVs, and stupid decisions of my in-laws. This is particularly annoying given that they have both been in the top 20% of U.S. incomes for their entire careers--they are just big spenders. Their attitude seems to be that spending everything they earn, spending down inheritances, and running up debts on top is "normal." After all, the alternative would be smaller houses and used cars, and their egos wouldn't allow that.
Like many Baby Boomers, they justify their lack of savings with a plan to "just work forever" like this one guy they know who worked until he was 90. Rather than seeing him as the outlier he is, they see him as an example loophole that justifies not saving a penny for the future. Since working until age 90 is exceedingly rare, even among people who actually WANT to, they will likely find themselves without an income and without savings at some point. Their big-spending habits will make that transition feel like a shock, an unexpected hardship that surely deserves a bailout from family members.
I'm happy helping my wife pay off her loans and build a life with me, but I'm not so excited about her parents coming to me to get bailed out of their self-imposed problems.
Therefore, here's the plan (a bit of a harsher option than what I've seen in the thread so far):
1) Get aligned with my wife. Make sure she understands that people who make $100,000 a year do not HAVE to face financial hardship. Even standard 15% savings rates could have protected them from financial crisis in the case of job loss, etc. Financial hardship for people like this comes from borrowing and spending. Make sure she's aware of the risks her parents are facing, let her decide how hard (or not) she wants to push them to change their ways now while there's still (a little) time. (They are in their 60s, still making (and squandering) six figures a year.)
2) Agree with my wife on a fairly "austere" form of help for ANY family members, hopefully along these lines:
* no-one goes homeless and no-one goes hungry. If someone needs a bed or a meal, we can offer it.
* if someone needs to move in with us on a longer-term basis, they contribute. If we provide long-term room and board, a chunk of any social security check comes to us to offset the expenses of a bigger house and a bigger grocery bill--Social Security won't be their fun money after enjoying free room and board at our expense.
* we're offering something bare bones--they are not our financial partners and they are not our children. They aren't necessarily invited along on every vacation at our expense. We're helping out a family member who fell on hard times, not helping someone preserve the lifestyle they're used to
* we agree not to give or lend money. We could provide some groceries at their place instead of meals at ours, but we will not be in the business of, for example, making mortgage payments "so I don't lose the house." If banks lent too much to these irresponsible people, the banks can eat it. It won't be our job to help pay off creditors of anti-mustachian family members.
3) In an ideal world, this would somehow be communicated to her parents. The message would be: a) you have been very lucky and made a lot of money. Your future financial needs, including post-work financial needs, which are an expected part of life, are your responsibility, and we hope you're planning for them. That's all up to you--you have to make the tradeoffs yourself between a new car now or a cash cushion later. b) We will not let anyone starve or go homeless. c) But we will not be a source of loans or cash. We will help people in crisis avoid total disaster, but we will not provide broke people with a middle-class income just because they're used to it.
On the positive side, this would at least set expectations. On the negative side, this tough message would strain relations--between me and the in-laws, between my wife and her parents, and between me and my wife. So maybe it's not even worth saying. They likely can't change anyway. Their debts are too big to pay off and also build a stash given that they are already in their 60s.
4) If my wife hates this idea and thinks that family needs to help each other financially in bigger ways, no matter what, then I will suggest that my wife and I have separate accounts. I simply can't spend my life saving up for *their* retirement. If my wife wants to contribute to their fancy lifestyle in old age, then I guess that's up to her, but I just can't do it. So I'd look into a scenario where my wife and I split our living expenses (with me paying proportionately more), but then we have separate savings. If on the other hand my wife is on board with my plan to limit support to emergency room and board, then we can keep our money together.
What I feel like I can't do is be full sharing financial partners with my wife if she is simultaneously full "what's mine is yours" financial partners with her irresponsible parents. Then, by the transitive property, they will effectively get to consume my stash. And I don't think that is right or fair.
Anyway, I would love any feedback on this. It's the same problem we're all talking about, but with a couple twists--including my wife's student loans, the fact that it's in-laws not parents, etc.
The problem is, I think clear expectations are important with these looming future liabilities. Clear expectations between spouses/partners, and ideally clear expectations between mustachians and those who will hit them up for financial help in the future!
For all of us on this thread, two extra things make these situations tricky. 1) The financial problems non-mustachians have are often self-imposed. If someone wants to spend 80% of their income and work until 65, fine. But if someone wants to live high on the hog and borrow lots of money, etc., I think it's painful and hard to justify for mustachians to just transfer savings over to those people. 2) A serious complicating factor is aging. It would be quite easy to say to a broke sibling--"I can't give you money--you either have to go get a job or you have to move to a smaller place and cut spending." But broke elderly people can't just go "get a job." Even if their suffering is their own fault, it's too late for them to do anything about it.
Thoughts?