Niece's Car Broke Down - Fam Wants $

[hadabeardonce]

Over a year ago I posted this thread: https://forum.mrmoneymustache.com/welcome-to-the-forum/effective-ways-to-help-family-financially-long-term/

I ended up offering a 0% interest loan that was repaid early. We've still been getting requests for help though...

The 401k loan - Many moons ago "The Mom" took out a loan from her 401k. Where the money went, I don't know, but she's still repaying the debt. "The Mom" has some kind of gimmick where someone helps her pay off the loan and then within 14-30 days she gets a new loan for a larger amount - part of it is used to refund the person who helps her pay it off and then the other part is hers. She continues to have a set amount deducted from her check for a few years or until the cycle repeats itself. We were asked to participate, but refused due to a lack of any sort of emergency.

The School Books - Summer or Spring quarter "The Niece" needed money for books because her financial aid disbursements were reduced. It was like $200 and it was for education, so we caved. Afterward we felt a bit taken because "The Niece" had spent like $600 on going to a concert out of town and made other questionable financial decisions, so she would have had the money... plus she didn't sign up for any scholarships. Later we also paid her to watch our place and feed our cat while we were away on vacation.

The 2007 Nissan Versa Transmission - This is the latest problem. Her car just won't accelerate going uphill and has some notoriously problematic CVT transmission. "The Niece" had been living with us during the week because it's closer to the college she attends(which is also where I work). Before she a driver's license we commuted together. They've gone to one mechanic who wants $2k to replace the transmission. Next Fall she may transfer to a 4-year, but hasn't completed the paperwork that's due in less than 10 days. She was also thinking of taking a year off, but had no idea what she's do during that year.


"Super Hero Me" wants to swoop in, lift the car with one hand and shoot dollar bills from my waist to resolve the issue.
"Family Guy Me" wants to be supportive in a time of need, especially during formative years.
"Family Therapist Me" wonders what the long term ramifications of my actions are and what lessons I'm teaching.
"Accountant Me" knows we have the money to help and it's just sitting in an emergency fund.
"Frugal Me" wants to find a cheaper way to resolve what's up. Rideshare, carpool, bus, etc.
"Banker Me" wants to keep our money, because it's our money that we saved.
"Social Justice Warrior Me" knows that capitalism doesn't care, the Bay Area is expensive for a single parent and not everyone gets the same opportunities.
"Finger Pointing Me" knows that "The Mom" has had ample time to retrain, look for other employment, and/or get a second job, but hasn't.
"Finger Pointing Me" knows that "The Niece" hasn't spent her money or time wisely, but she's young and doesn't know.
"Me" is stressed out about problems that aren't really mine, but somehow are(?).

We're being asked about the 401k loan again and we were thinking about the 0% interest loan again. I'm curious about your opinions.

(and I don't know that this should make any difference, but it's my brother-in-law's step-daughter on the his ex-wife's side. Not a blood relatives, but friendly ones.)

[Milizard]

I'll take the low hanging fruit:  no way to the 401k loan ponzi scheme.

[Slow&Steady]

"Family Therapist Me" wonders what the long term ramifications of my actions are and what lessons I'm teaching.

"Me" is stressed out about problems that aren't really mine, but somehow are(?).

You are teaching niece that she doesn't have to take care of her own problems because you will take care of them for her.  This is not your problem to solve. 

"I am sorry to hear about your car, how are you going to fix it?"
"Oh, I have heard that 401k loans can cause a lot of stress, when are you going to be done paying that off?"

You are already providing (I am assuming here) free room/board.  If she doesn't get the car fixed before it breaks down maybe you can offer to let her carpool with you again, or offer to help her find a used bikes for sale,or send her a link for the public transportation map/schedule (I had a lot of success with public trans when we visited the Bay area).

[mozar]

Sounds like the mom and neice are able to find money elsewhere so you don't have to feel guilty about not giving them money. Also the neice is at an age where she could go many different directions in life. If you keep rescuing the neice you are teaching her that she doesn't have to take responsibility for her own actions, and you are setting her up to be your dependent for life. If you feel unable to stop enabling her, give money directly to the place that requested it. So pay the mechanic bill directly, go to the bookstore with her and pay for the books, etc.

[catccc]

I hate to seem like an uncaring jerk, but I think finger pointing you is right.  If you (or others) keep bailing them out, they'll never learn.  Your niece may be young, but that's no reason not to learn about the virtues of saving and prioritizing how you spend your money.

There was a book fair at my kids' school.  I told my kids they could each spend $10 at the book fair, and anything they didn't spend, I'd double and put and their college fund.  We go to the library often and there is no shortage of books available to them.  My 10 year old, an avid reader, tears through books at a ridiculous rate.  She didn't buy anything.  My 7 year old, on the other hand, while also a big time reader, reads at a slower pace, savors a book, and likes to read the same thing over and over.  She spent her $10.  But she still had to stay within her budget.

The niece is on track to be the mom in a number of years if she doesn't learn.  Let her learn.  Don't enable this behavior.

[frugaliknowit]

You might wanna cut financial ties NOW if you want to stop the enabling.  There might be some short term pain in the form of resentment and bitterness (since you have been throwing money their way already).

Does your niece work (outside of going to school)? 

If you want to help, offer to match up to 50% of the car repair with proof that the first 50% came from nieces earnings.

Another thought:  Your emergency fund should be for your family.

[hadabeardonce]

I'll take the low hanging fruit:  no way to the 401k loan ponzi scheme.

Yeah, I'd volunteer my time to look at their household budget and think up ways to make living more manageable. The 401k loan may be better than running up credit card debt or taking out other loans, but it shouldn't be the norm.

You are teaching niece that she doesn't have to take care of her own problems because you will take care of them for her.  This is not your problem to solve. 

"I am sorry to hear about your car, how are you going to fix it?"
"Oh, I have heard that 401k loans can cause a lot of stress, when are you going to be done paying that off?"

You are already providing (I am assuming here) free room/board.  If she doesn't get the car fixed before it breaks down maybe you can offer to let her carpool with you again, or offer to help her find a used bikes for sale, or send her a link for the public transportation map/schedule (I had a lot of success with public trans when we visited the Bay area).

+10,000 points to you for assuming correctly and a spot on repy. She lived with us during the week on our couch for the past two years while attending college.

Sounds like the mom and neice are able to find money elsewhere so you don't have to feel guilty about not giving them money. Also the neice is at an age where she could go many different directions in life. If you keep rescuing the neice you are teaching her that she doesn't have to take responsibility for her own actions, and you are setting her up to be your dependent for life. If you feel unable to stop enabling her, give money directly to the place that requested it. So pay the mechanic bill directly, go to the bookstore with her and pay for the books, etc.

I hate to seem like an uncaring jerk, but I think finger pointing you is right.  If you (or others) keep bailing them out, they'll never learn.  Your niece may be young, but that's no reason not to learn about the virtues of saving and prioritizing how you spend your money.

The niece is on track to be the mom in a number of years if she doesn't learn.  Let her learn.  Don't enable this behavior.

I appreciate the responses... it would be good for both of them to learn the ancient practice of saving. If they have the capacity to repay a loan, they have the ability to save the same amount per month in advance to prevent borrowing.

You might wanna cut financial ties NOW if you want to stop the enabling.  There might be some short term pain in the form of resentment and bitterness (since you have been throwing money their way already).

Does your niece work (outside of going to school)? 

If you want to help, offer to match up to 50% of the car repair with proof that the first 50% came from nieces earnings.

Another thought:  Your emergency fund should be for your family.

Niece works at the college. 19hrs/wk, $12hr.

Matching is an idea and I know the intent is to get some of their skin in the game, but it means I won't be getting repaid. That was a reason I was offering a 2yr 0% int loan, which wouldn't exceed a month of our expenses or so.

---

I'm seeing a lot of logic in the, "Well, you're going to have to 'suffer' for now while you save up to resolve your own problem" plan. Mathematically it shouldn't take long with aggressive savings.

Thanks again!

[AlexMar]

This sounds like a whole lot of "not my problem"

[frugaliknowit]

I'll take the low hanging fruit:  no way to the 401k loan ponzi scheme.

Yeah, I'd volunteer my time to look at their household budget and think up ways to make living more manageable. The 401k loan may be better than running up credit card debt or taking out other loans, but it shouldn't be the norm.

You are teaching niece that she doesn't have to take care of her own problems because you will take care of them for her.  This is not your problem to solve. 

"I am sorry to hear about your car, how are you going to fix it?"
"Oh, I have heard that 401k loans can cause a lot of stress, when are you going to be done paying that off?"

You are already providing (I am assuming here) free room/board.  If she doesn't get the car fixed before it breaks down maybe you can offer to let her carpool with you again, or offer to help her find a used bikes for sale, or send her a link for the public transportation map/schedule (I had a lot of success with public trans when we visited the Bay area).

+10,000 points to you for assuming correctly and a spot on repy. She lived with us during the week on our couch for the past two years while attending college.

Sounds like the mom and neice are able to find money elsewhere so you don't have to feel guilty about not giving them money. Also the neice is at an age where she could go many different directions in life. If you keep rescuing the neice you are teaching her that she doesn't have to take responsibility for her own actions, and you are setting her up to be your dependent for life. If you feel unable to stop enabling her, give money directly to the place that requested it. So pay the mechanic bill directly, go to the bookstore with her and pay for the books, etc.

I hate to seem like an uncaring jerk, but I think finger pointing you is right.  If you (or others) keep bailing them out, they'll never learn.  Your niece may be young, but that's no reason not to learn about the virtues of saving and prioritizing how you spend your money.

The niece is on track to be the mom in a number of years if she doesn't learn.  Let her learn.  Don't enable this behavior.

I appreciate the responses... it would be good for both of them to learn the ancient practice of saving. If they have the capacity to repay a loan, they have the ability to save the same amount per month in advance to prevent borrowing.

You might wanna cut financial ties NOW if you want to stop the enabling.  There might be some short term pain in the form of resentment and bitterness (since you have been throwing money their way already).

Does your niece work (outside of going to school)? 

If you want to help, offer to match up to 50% of the car repair with proof that the first 50% came from nieces earnings.

Another thought:  Your emergency fund should be for your family.

Niece works at the college. 19hrs/wk, $12hr.

Matching is an idea and I know the intent is to get some of their skin in the game, but it means I won't be getting repaid. That was a reason I was offering a 2yr 0% int loan, which wouldn't exceed a month of our expenses or so.

---

I'm seeing a lot of logic in the, "Well, you're going to have to 'suffer' for now while you save up to resolve your own problem" plan. Mathematically it shouldn't take long with aggressive savings.

Thanks again!

Since your niece has a job, there is a serious mismatch of income (hers and the parents) and expenses.  This will continue unless your niece and her parents either raise their income and/or reduce their expenses.  In the absence of a plan to correct this, you are in for (potentially life long) a long period of subsidizing.  When you don't require a match, there's no skin in the game and minimal chance for behavioral change.

[mm1970]

Sounds like the mom and neice are able to find money elsewhere so you don't have to feel guilty about not giving them money. Also the neice is at an age where she could go many different directions in life. If you keep rescuing the neice you are teaching her that she doesn't have to take responsibility for her own actions, and you are setting her up to be your dependent for life. If you feel unable to stop enabling her, give money directly to the place that requested it. So pay the mechanic bill directly, go to the bookstore with her and pay for the books, etc.

My husband has a coworker who "rescued" his niece and her kid more than once.  Pretty sure they live with him permanently now, and it's been decades.

The niece had a hard start for sure. 

[mrmoonymartian]

This sounds like a whole lot of "not my problem"

Nailed it.

[robartsd]

I'd go with offering to help with carpool/bike/transit for your niece's transportation needs while she saves up her own money to fix the car. Bonus - if she's saving for a car repair she won't spend money on a concert and need help for books this spring. She has plenty of time to save up to fix the car before going off to 4 year school (should take less than 3 months if she can apply all take home pay to this). Once she is able to save enough, encourage her to continue saving (at a lower rate if necessary) for future emergencies. I'd only consider lending money to fix the car if carpool/bike/transit options are not adequate to meet her transportation needs ("adequate" and "needs" as determined by myself, not as perceived by niece).

[hadabeardonce]

This sounds like a whole lot of "not my problem"

Nailed it.

I guess this is the answer to the age old question: "What sound does a thread make if you post it in the 'Ask a Mustachian' sub-forum?" ;-)

[SunnyDays]

My response would be "And you're asking me because...........?"  Chance are they won't know what to say and will give up asking.

[Miss Piggy]

From the the old thread you linked to above, certain pieces bolded by me for emphasis...

...

We're helping our oldest niece go to community college. She's staying on our couch during the week, so we're trying to set a good example. I had her set up a Mint account, explained how my wife and I manage our money and I've been pretty transparent with financial stuff. I'm hoping the education she's receiving will give her the opportunity to find a career that's rewarding. Hopefully some of what I'm showing her will influence her spending/saving habits. *fingers crossed for a long term positive affect her life trajectory*

...

Has anyone managed to make a lightbulb appear above a relative's head with the idea that they need to change their financial ways? How did you do it? What did you show them? Is there a magic phrase?

Honestly, I think this current situation is your real-life example/opportunity to turn the lightbulb on.

[rothwem]

This sounds like a whole lot of "not my problem"

Nailed it.

I guess this is the answer to the age old question: "What sound does a thread make if you post it in the 'Ask a Mustachian' sub-forum?" ;-)

Its funny--I've had a number of situations in the last couple years where I've thought about making a thread on MMM forums to ask a question...but I know exactly what the answers would be from reading here, so I skip that process and proceed to the solution. 

Its a pretty great thought exercise though. 

And yeah, the niece needs to find another way to get that car fixed that doesn't involve you doing it for her.  I think it would be okay to buy her a decent used bike for Christmas though. 

[Sibley]

Better idea: OP, allocate a bit of money towards a therapist to help you retrain yourself so that you're not trapped in an unending cycle of dysfunction and enabling.

[I'm a red panda]

Offer the let niece commute with you again, if you want to help.  Make it clear that you commute on your schedule, so she may have to hang around campus until your work day is done. Tell her you'd be happy to keep helping her like this until she saves the money to fix the car.

Stop giving them money. Point out where you gave $200 for books, but she had $600 for concert tickets. 

And take 0 part in that 401k craziness.  I would help "the niece" because it isn't totally her fault she is in a crappy situation (though I'd make clear she's an adult now and needs to start taking responsibility for herself); but I'd be done with "the mom" at this point.

[Dave1442397]

Another thing - check the warranty on that Versa. It may fall under the extended warranty Nissan offered due to issues with the CVT.

http://www.lemonlawcase.com/problem-vehicles/nissan-cvt-problems/

[Catbert]

Listen to the Family Therapist.  He (she?) seems to have the best advice.

[robartsd]

Another thing - check the warranty on that Versa. It may fall under the extended warranty Nissan offered due to issues with the CVT.

http://www.lemonlawcase.com/problem-vehicles/nissan-cvt-problems/

OP stated it was an '07 - not included in that warranty extension.

[Paradise]

You've gotten great advice from posters! Wouldn't touch the Mom stuff with a 10-foot Ponzi pole, but...

I think you may want to discover "Gift Giving Me" - but in the way that the greatest gift you can provide is to step back and allow your niece to discover the joy and satisfaction of problem-solving her own issues. You're assisting with your couch and kindness (which is fabulous), but she needs to understand and learn that her choices have consequences. Go to a pricey concert but didn't set aside money for text books? Wow - too bad. (I have family members with special needs who are in college while also working part-time and even they know to buy their text books used on Amazon - and resell them there after the class ends.) So - no excuses in my book for niece!  (I hope that she volunteers and assists around your household in a major way - not just loading the dishwasher once a week - to thank you for the couch and your kind assistance.) Paying her to vacation/pet sit - ugh - she should have happily volunteered to do that in exchange for your efforts on her behalf. But, maybe I'm just mean :) Carpooling with you or another college kid might be her best options relating to the car issue, but letting her sort that out and not getting involved in solving the dilemma for her - beyond helping her talk through ideas and options - would be my 2 cents.

Think of how happy and self-satisfied niece will be when she's able to successfully deal with challenges that face her (and at this point, they are low-stakes ones) so that when the inevitable big/adult challenges start to emerge, she will have the experience and muscle memory to cope with them. I can't imagine any more valuable gift you can offer!

I speak from experience - another family member has had an enabling benefactor her entire life - think huge sums of money, cars, etc. that were produced when she begged, turned on the water works, or when bill collectors called. She's now 50+, enabling benefactor just died, and I can't see any scenario where she will magically amend her poor financial and life choices. If you can save your niece from an existence like that, you would truly be a hero.

[KBecks]

It's not going to be cute when the niece is 40 years old and leeching off you.  What lessons has she learned from her mom for her whole life?

You don't give her $2k for her car.  You don't get involved with the mom's stuff.  If the niece is getting free rent at your place she should be thankful and respectful of your property and house rules.

[KBecks]

Offer the let niece commute with you again, if you want to help.  Make it clear that you commute on your schedule, so she may have to hang around campus until your work day is done. Tell her you'd be happy to keep helping her like this until she saves the money to fix the car.

Stop giving them money. Point out where you gave $200 for books, but she had $600 for concert tickets. 

And take 0 part in that 401k craziness.  I would help "the niece" because it isn't totally her fault she is in a crappy situation (though I'd make clear she's an adult now and needs to start taking responsibility for herself); but I'd be done with "the mom" at this point.

+1

[KBecks]

I'm sure you realize that "the mom" (is that your sister or bro?) is coaching the niece on how to get as much money as possible from you, and use you for money.

[AlexMar]

This sounds like a whole lot of "not my problem"

Nailed it.

I guess this is the answer to the age old question: "What sound does a thread make if you post it in the 'Ask a Mustachian' sub-forum?" ;-)

It was a short answer, but powerful.  You seriously need to step away from this mess.  These are not your problems.  You have allowed it to snowball by constantly jumping in to help, and now it's becoming more and more problems for you.

She spent $600 on tickets after begging you for money because she needed the help so badly...  What more do you need to realize that you are being taken advantage of?  I speak FROM EXPERIENCE on this topic, FYI.  My step-dad spent a good 20 years getting roped in and abused by someone he cared about for money here and there.  Not huge amounts, but similar type of nonsense... need to fix my car, need books, little stuff.  And then they would have freshly manicured nails done after begging for $20 to get gas....

Took dad a long time but he FINALLY put a stop to it.  You need to do the same.  Just, stop it.  In your quest to be a hero, you are actually hurting these people.  You are enabling them.  They MUST grow up and stand on their own.  Offer advice if they want it, and that's where it ends.

[Poundwise]

x"Finger Pointing Me" knows that "The Niece" hasn't spent her money or time wisely, but she's young and doesn't know.

She will never learn if you keep rescuing her.  By sheltering her from the natural consequences of her actions, you are actually hurting her.

It's a typical strategy of every bad-with-money person I know, to spend money on the fun things and then come begging for help paying for the necessities. Please don't fall for it.

When I was the age of this young lady, I made some bad financial choices. It meant that I didn't have quite enough to eat sometimes, and I had to work very hard on a second job cleaning toilets, but in the end it was very good for me.  It's better for her to learn these lessons when she's young, carefree, and energetic, than when she's older with responsibilities. Otherwise before you know it you'll be supporting her and her family.

Like many others here, I advise that you suggest some options, such as public transit, finding a carpool, or biking. You're doing enough by giving her free shelter; let her find her own transportation. An occasional ride with you is fine but DO NOT adjust your schedule to hers.