Ever since waking up financially (almost two years now), I have come to notice more things that my parents do (financially speaking) that really make me worry for them. Well, to be honest, their money management has never stood out as particularly good to me, in fact, I was probably bad with money in the first place due to their example. But, that is neither here or there.
I have tried to offer my help to them (I'm a CPA) by offering to do a detailed budget and helping them plan, but it goes ignored. Alas, here is their situation.
- Mother is stay-at-home-mom (never got her HS diploma and doesn't speak English well), step-dad is 69 years old and plans to work for the next five years (he's in good health, and I cross my fingers that he continue to be)
- Step-dad makes income of about $150K
- Step-dad has zero in retirement savings outside of social security (he had 401K and pension balances from previous jobs which he took out and used to pay for other things like down-payments on homes, etc.)
- Signed a 30-year-mortgage (yes, at his age) in late 2015 for about $400K. Total monthly payment is a couple hundred dollars short of the max amount under SS
- Does not plan to stay in this home, only for the next five years until he retires which he claims he will then sell and downsize to a smaller home
- Took out SS early this year, which will make his income subject to tax due to his job's earnings
- Sometime in 2014/2015, financed a BMW (sigh) for about $40K or $50K. This is after he finished five years paying $700/month for a different car. My mom enables this by saying he "deserves it"
- Even though he has a about 4 or 5 siblings, he is solely responsible for his mother's financial well-being. She receives a measly pension from her late husband, and my step-dad supplements the rest. It's good that he helps her but it's completely unfair that his other siblings don't chip in despite absolutely having the resources to do so.
- He does not keep a budget, just spends as he goes
- He has an irrational obsession with purchasing DVD's, has literally hundreds. He pays full-price for these at places like Best Buy. Luckily he has now discovered Netflix but the damage has been done. Thousands of dollars down the drain - yes, thousands.
- Purchased a $4K TV last year, on credit
- Takes the family out for dinners every weekend, easily upwards of $150 per meal
- Gambles occassionally ($13,000 in 2015, I saw his tax return. This is nothing compared to previous years)
- As noted above, the only income he'll be relying on in retirement is SS, with no outright ownership of a home and my mother not bringing in any money
- He has six biological children, ages 18 - 42.
- He still has student loans from his MBA program in the '90s!!!! Despite making $200/month payments every month, still owes close to what he took out - about $30K-$35K
- He has declared bankruptcy in the past, he clearly has not learned any lessons
This is all that comes to mind at the moment, I'm sure there might be more that I'm not even aware of.
Honestly, his irresponsibility is scary for someone his age. I'm concerned that I'll be the one paying for all his mistakes, which is unfair as I am only now getting out of my own debt hole and previous bad habits (still have a couple bad habits, it's a work in progress).
He won't listen to me obviously, but maybe if I get some good comments down below, I might be able to print them out and show him to slap some sense into him?!
Please help, any insights, advice, reality checks, etc. ... would be really appreciated. Thank you!