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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: BlueLesPaul on February 17, 2015, 12:14:27 PM

Title: Parents in debt. Should I broach the subject?
Post by: BlueLesPaul on February 17, 2015, 12:14:27 PM
When I was doing my parents taxes, I noticed that they are in about $45,000 in credit card debt.  I have never talked about it with my Dad, but he seems to think that everything will be ok since he get a nice pension and they will have Social Security on top of a 401(k).  I think they are both responsible for the large amount due to vacation, education and other expenses.  Should I try to help them out or is it more likely to blow up in my face?

Oh, I should mention that my parents make more than six figure, so on paper, it would be very easy to pay off the debt.  They also took out a mortgage (their house had been paid off) to pay off consumer debt about a decade ago and the debt has creeped back up.
Title: Re: Parents in debt. Should I broach the subject?
Post by: Frankies Girl on February 17, 2015, 12:36:53 PM
You could bring it up, but unless they are receptive to the idea of you advising them, I'd drop it if there is any push-back.

I'd at least try, however, since they do seem to trust you to do the taxes,  so they might even want your help.
Title: Re: Parents in debt. Should I broach the subject?
Post by: Capsu78 on February 17, 2015, 12:53:24 PM
Maybe position it as "I see you are carrying a lot of interest charges on your CC's...is this a concern for you and Mom as you near retirement?" as opposed to the "debt" approach. "If you can pay it off easily before retirement that's good... but if you need to refinance this into a mortgage, you had better do it now while you are still working." 
Fewer MYOB opportunities to blow back on you and you flush out the important answer...unless they tell you to MYOB! 
Title: Re: Parents in debt. Should I broach the subject?
Post by: darkadams00 on February 17, 2015, 07:59:32 PM
Preparing their taxes gives you an easy path to the conversation, but your current relationship status, their personalities, your approach/attitude, and their opinion of you/your financial history will determine if the conversation goes anywhere in a positive direction after the first two sentences.

Concern for their well-being and security in the future is a more positive conversation driver than paying off debt. Thinking about the future security of retired parents says you care. Talking about paying off accrued CC debt implies past bad decisions--same result, better messaging. Similar to "Honey, I'm concerned about your increasing health issues" instead of "Honey, buying bigger pants won't make your butt look smaller."
Title: Re: Parents in debt. Should I broach the subject?
Post by: firewalker on February 17, 2015, 08:17:00 PM
One angle might be the positive that, since you are tax prep guy, you can find ways to save them money. "Hey, because you do [this or that], we can save you this much!" And "If we use your [this and that], we could save this much!" And "If we move money over to pay down your c. c. debt, we could save you this much!"