Author Topic: Parent who spends too much  (Read 2609 times)

walt61588

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Parent who spends too much
« on: May 03, 2014, 05:01:52 PM »
Relatively new to MMM as a reader and just created account today.

My mother inherited about 850k when her mother passed away in 2003.  Tried to work with her to keep a budget, but she has no value/respect for money and spends it freely.  By this I mean she had left 125k as of April 2014.  My grandfather(her father) just passed away and left another 700k to her and I am concerned she will go through all of that too.  All money is in Vanguard at this point.

I am POA for her along with another brother.  I am an agent for her on the Vanguard account and started a financial plan for her through them for free.  My gf mostly had stocks and not very diversified.

How do you get a parent to stay with in a budget and not overspend every month?  Is this possible?  She has agreed to not write any checks from Vanguard for the time being, but likes to have about $1000 on her at all times.  She earns about $1150 a month with SS and a small pension.  Trying to keep her around 3500 a month instead of 7-8k a month.  House/car paid for so no payments there.

Thanks for any suggestions.


amha

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Re: Parent who spends too much
« Reply #1 on: May 03, 2014, 05:12:19 PM »
Could you move all the Vanguard accounts to something like a spendthrift trust (https://en.wikipedia.org/wiki/Spendthrift_trust), with you and/or your brother as trustee(s)? That would give you much more control over her spending. If you have power of attorney, that might make it easier to arrange (might it then not require her consent?)

Not to recommend spending more money, but you might want to start looking around for a good estates/trusts attorney who can explain your options. It sounds like reasoning her into a lower level of spending probably won't  work, so if you can control the flow of money to her, you've solved the problem.

The good news is that $3500/month - 1150/month SS is just under $30K/year, so if she has 700 + 125 = 825K, she can certainly afford that much. (But not $7-8K/month!)

Gimesalot

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Re: Parent who spends too much
« Reply #2 on: May 03, 2014, 05:30:03 PM »
I don't really think you can tell your mother how to spend her money... sorry.  Its really her decision. 

I would suggest that you tell her that you love her and are worried because you won't be able to support her once this money runs out.  That's all you can do.

At least with a paid off house and car, $1150 a month will have to make due.

By the way, I can completely sympathize.  My parents cashed out their 401k for a new kitchen remodel and a few months later asked what plans I have to support them in their old age!

DollarBill

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Re: Parent who spends too much
« Reply #3 on: May 03, 2014, 05:58:09 PM »
Quote
My parents cashed out their 401k for a new kitchen remodel and a few months later asked what plans I have to support them in their old age!

I truly don't know what I would say to this! If they were completely irresponsible I would not help them out. If they were open to change then it might be possible.

Jon_Snow

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Re: Parent who spends too much
« Reply #4 on: May 03, 2014, 06:11:14 PM »
One of my parents casually let it slip that they spend about 20k per month... they are quite well off and may very well be able to afford it, but it still makes me shudder.

walt61588

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Re: Parent who spends too much
« Reply #5 on: May 04, 2014, 12:32:42 PM »
Thanks for the suggestion about the spendthrift trust as I have never heard of it.  Agreed that I can't tell my mother how to spend her money and she does as she sees fit.  Just trying to help her manage and have enough for the rest of her life.