Help a Reader: Helping Parents

Here's an email I recently received from a reader:

My husband and I are trying really hard to follow your ideas of how to become financially solvent.  They're great ideas.  My husband and I are just getting to the point where our noses are above the water instead of drowning in debt.  We're still working on getting out of debt and haven't gotten to the accumulation phase of your plan (we're figuring another 4 years or so, unless we get raises or bonuses). 
 
My parents are really stupid when it comes to money and they're starting to ask for help, and not the kind that's free.  They want us to help them buy a car, give them gas money, etc.  I explained to them that we can't afford to help them and we're in the same boat they are. 
 
How would you suggest handling that situation in a few years when we do have the money to help?  I've tried guiding them to websites and books like this, and they read them, devour the information, but don't have the willpower to apply it.  If it was a shirttail relative, I'd tell them they're out of line, but these are my parents.  I just have a feeling I'll sabotage myself with my plan to wealth unless I have a plan to deal with my parents' asking for money, so if you could give me something specific to go on, that would be great.

What would you advise?

Comments

[Laurie]

I can sympathize with this situation, except our problem is my in-laws. They cannot seem to get it together and are constantly looking for freebies and/or handouts. At age 23, my husband was paying their mortgage for several months. Now they are driving a truck that we own but currently do not drive, and want to pay off before we trade it in. They got into an accident with it and did not completely fix it. They wanted us to pay for brakes even though they have had it for 1.5 years and did not pay a dime for it, including insurance. But then again, my brother in law "borrowed" several thousand several years ago and never paid it back. So it is a pattern, but we too have trouble saying NO, even though it is delaying our own financial stability.

[CMS]

I would sit them down and have a grown up talk with them, lovingly explaining that you too were struggling with debt. You realized you had to do something to put the brakes on and that it wouldn't be easy but in the long run, it would be the absolute best thing you could do. Tell them that you realized that if you didn't get a grip on your finances and do something drastic, you would most likely continue the cycle and in a few years time, would be needing your kids to bail you out. You're now making a choice to brake the cycle and lead by example so that others might also ask for help in learning the same principles that you learned to bring about financial freedom and the peace of mind it brings. Tell them you believe that you could bail them out now, and bail them out again next time etc, but that that will destroy their self-respect and also your respect for them. Ultimately bailing them out is only a short-term fix and you want them to experience the long-term joy you are working towards. (It's called "tough love" and helps them help themselves when you draw a line in the sand).

obviously, it all depends on your relationship with your parents.

Mine, thankfully, were quite willing to listen to and take advice on financial matters from their child. It took a long time to convince my dad it may not be his best bet to have most of his 401K invested in company stock. I mean years. Of course, now that his company's stock is worth 2 bucks, he understands the point vividly. Thankfully, he got out long before.

But I guess I'd say this -- there's nothing specific that can be given, really. This isn't rocket science; nor is their a magic bullet. If your parents won't live responsibly, unfortunately no one can spare you the tough decisions of when to help, when not to help, and what form to take that help.

Don't mean to be a downer. I sympathize with your situation.

[Dave]

You'll help them best by not helping them!
That is, don't even start or there'll be no end.
Just say "N-O" adn keep loving them.
(Who helped them before 'you' came along???)

First up, I love my parents.
However, what kind of people have no respect for themselves, and then, what kind of people have no respect for their children to start asking, or dropping hints, and putting guilt/pressure on them to help out? Most of us have our own children to take care of and I think it's rude for someone else (yes, even our dear Mom and Dad) to ask for stuff. It's not right. If they've made bad choices or been irresponsible with their money, THEY need to get real help and not ask their children to fix their problems. Just my two cents.

[Mr. ToughMoneyLove]

Time for tough love because history with other families proves that it never gets better unless and until the word NO is heard loud and clear. Just explain that you are very sorry but that you cannot afford to help them financially. That is all you need to say and that is all you should say. If you cannot muster the strength to say this, then you will be pulled back down with your parents and, frankly, you will deserve it. If they are thrown out into the street or are starving, sure - you help them - but not now.

[RDS]

Sounds like a tough situation. It can be very difficult when family and money issues intersect. Congratulations on the work that you have done to get your own financial situation in order and on your desire to respond appropriately and compassionately to a tough problem.

I would try to take them through the same journey that you are going through. Let them know that you understand how tough it is to make ends meet and show them how you are struggling to pay off your debt. Tell them what you have learned and what you are doing to turn your financial situation around.

Perhaps you could explain that because of your situation you are unable to offer them financial help, but instead you can offer to go over their finances with them to see if you can offer any advice based on what you have learned. If they say yes, great! If the say no, then perhaps this can be what you come back to every time they ask for help.

However you handle it, good luck!

RDS

[Strick]

Sounds like the perfect situation to lie (there aren't many) and maintain the "I'm just as bad off" story as you have now. Giving them money to blow or telling your parents (we're not talking about your kids here) you aren't going to help them financially "for their own good" are not roads I'd want to go down.

Do help them learn all you can.

[Trent D.]

I suggest that any money you do give be a gift, with no expectation of repayment. They'll almost certainly fail to pay you back, and it'll cause serious bitterness.

It's a terribly difficult situation to be in, but you'll have to say NO. If they really pressure you, name some bad money decisions they've made, and tell them that your little bit of money is not going to fix their habits.

You wrote:
"How would you suggest handling that situation in a few years when we do have the money to help?
I've tried guiding them to websites and books like this, and they read them, devour the information, but don't have the willpower to apply it."

I think the key words here are: "... don't have the willpower" - what is willpower? It's a determination of the WILL. And they chose not to use it.
All of us who have worked hard to get our finances sorted out and to get out
of debt know all about willpower - it's something you chose. And whether we are kids or adults, there's tons of times in our lives when we don't WANT to do something but we just have to ie. we do it as an act of the will - that's just life. Shame when it's adults who haven't learned to deny themselves and stop spending and then their kids have to be the parents.
I commend you for getting your act together; why should anyone else abuse your hard work and achievements when YOU DID engage your willpower!! Shame on them. Love them, do what others have said and offer other solutions, but also say NO to enabling their bad habits. They won't like it initially but they will respect you for saying no.
God luck and keep up the great work.

[Doug E]

You could always change your last name to 'Obama' and while you bust your gut making imporve your lot, you could throw it away on your parents and 'spread the wealth around'!

[Steph (happily married)]

As a married person, I would ask, "what will giving to them do to my marriage realationship?", because I think that if they ask once and you give in, they'll ask again and again. That's got to be hard on the spouse whose parents these are not and it has the potential to put a lot of strain on a marriage. Do I care more bout my parents then, than I care about my marriage and my children's emotional health (coz they'll pick up on it)? The stats tell us that money is one of the 3 major causes of divorce so I know in my marriage that I wouldn't want to invite anything that would add to our financial concerns - especially when it involves the parents on one side. Something to think about but I wouldn't even go there. That's there problem and you don't want it to be yours.

Be strong and congratulations on how far you have come, kudos to you,
Steph

[RT Wolf]

I love that you're thinking so far ahead. I especially want to congratulate you on fixing up your own financial situation. Good work.

The good news seems to be that you've got a couple of years before you need to face that other question. I would talk to them and ask them what sort of expectations they have of you and your siblings (if any) and all of yours' families (ie your husband) in terms of financially helping them. Without knowing your background, I might posit that they expect you all to financially support them through their old age, or at least return the favour of raising you. I'm South Asian and my parents expect me to support them. Get those expectations out into the open and then you can talk about them. The situation that you may want is probably the following:

Since you have a couple of years, and assuming they're not retired already, you can try helping them build their own nestegg and/or make it bigger. Help them improve their own situation. Hopefully by the time you've improved your situation and/or they've retired, etc. they're in a better place and don't need your help. If they keep reading personal finance stuff, they're more likely to hit upon something that motivates them, as long as they keep doing it, so I'd say there's a decently high possibility of them improving their situation by the time you're out of debt.

If they have not, it is a communication issue, so I suggest reading some books on communication, such as Difficult Conversations or Crucial Conversations. You might also want to read the following:
http://74.125.95.104/search?q=cache:yAgohAvVF0oJ:mirecc.stanford.edu/pdf/coping_part6.pdf+communication+broken+record&hl=en&ct=clnk&cd=1&gl=ca&client=firefox-a

As I see it, in a few years, you run out of the "excuse" that you can't help them because you're in debt yourselves, so you can either replace that with another excuse (ie kids, if you have them, need to save for their college tuition), or as someone said, you can lie and say that you can't. If you don't focus on buying status items and live simply, they'll likely never have to know. However, I would suggest the above approach of improving your communication skills and talk to them about it.

Alternatively still, you might consider budgeting some money a few years out to go out to them. That is, say a few hundred dollars goes to them every month, but by doing this, you open up the option of them trying to ask for more. That's why that attitude will need to be changed. Do not be afraid of being called selfish or ungrateful. I love my parents and as grateful as I am, if they got themselves into financial trouble through their own actions (which they have), that's their fault and I will help them to truly fix their problems, but I will not put bandaids on their problems. But I'm ok with taking that sort of hard line, and you might need to learn to be, too. If you can't, your husband might be willing to, or can on your behalf. Alternatively, you can tell your parents that your husband won't let you.

Anyhoo, I've tried to reframe the issue and throw in some possible options. Good luck! I'd like to see what other people say, as I've got this problem, too and my solution is to help a little and not a lot, which may not be optimal.

[Carol]

I cannot imagine ever asking my kids for financial help.
If I were your parents, I would be so proud of you for getting it together and when I saw how good you were at it, I'd ask you to show me how to get there too.

How is it that they don't even have money for gas? Are they gambling their money away?????

I agree with others here - tough love, a 2 lettered word than none of us like but learn to live with spelled "N--O", and don't buy into any of their whining or pity parties or guilt trips they might try to lay on you. If you were raised by them, got into debt likt them, and now are getting out of debt, then they can do it too. You go girl, good for you, enjoy the fruits and don't compromise - you owe it to your husband and children to keep a good thing going and to be a good example to them.

[Be Honest, but don't be Weak]

I agree with RTWolf that you are exceptional in your foresight - that's great.

I however, disagree with the advice to lie in any way, or to use your husband or to say he won't let you - dishonesty is never a good policy and on top of that, it makes your husband the bad guy. Just be honest. Tell them you've had to re-learn (and unlearn) bad money habits to get where you are, and help them to believe that they too can do it. Help them understand how freeing it is not to be in debt any more and explain the real benefits and joy that comes from doing it. Tell them that you could keep putting bandaids on their problem but you'd much prefer for them to experience the freedoms that you are experiencing. Find stories/testimonies on the net that they can read of similar people who have taken the journey to debt freedom so that they too can get motivated and inspired to change their lives. Make this an opportunity for positive change and a chance to draw you closer together as you get excited about this for them.

[Jim]

It sounds as if the parents are basically just irresponsible with money. If thats the situation then I would not give them any support. They should fix their own financial problems and control their own spending. I'd give them advice and suggestions. If they ask for gas money then I'd question what they're spending their money on. Have they really cut spending? No cable bill, no eating out, no vices, etc? So any request for money I'd counter with a question on why they can't cut back on this or that.

If the situation was different and they were really handling their money OK but faced a hardship that put them in financial jeopardy then that would be a different matter. But it doesn't sound like thats the case here.

[JimL]

Once you begin giving them help, they will not only expect it to continue, but will then ask for more. Let them know that you are not in a position to help them and that they need to make changes immediately so that they can provide for their own retirement.

[Andie]

A lot of advice here is good; you don't want to let your parents sink you.

What I'd add is that you probably need live, face-to-face support as you work things out with your parents. This can be trusted friends, clergy, or a family therapist. You're in the process of learning new life habits and also negotiating treacherous family waters. That's a lot, don't go it alone.

Congrats on the progress you've made so far! You can do it.

[Anom]

I would find myself very torn. How could I say no to the people who gave birth to me and dedicated so much time and money to raising (and I think they did this well!).

I have already told my parents if they ever need help I am here for them.

[gene's mom]

Go to the library & check out the book "Boundaries". Don't remember the author's name.

I would help my parents if they needed "help". Your parents don't need help. They need a reality check. I don't believe that children owe their parents anything. Parents choose to have children and all the financial costs associated with them. Children did not force their parents to create them and the financial burden.

[Dave]

Stay as far away from their money disaster as you possibly can. Past behavior is the best indicator of future action, and if they have a constant theme of money problems, you're going to end up getting caught up in their drama and swept away down-stream, far far away from your own financial goals. I've lived this mistake firsthand - please learn from the nighmare I'm going through:

5 years ago, when my wife and I found out we were expecting our first child, I had a crazy idea that a mortgage was cheaper than childcare for an infant. I had this crazy thought that I could buy a house, find great people to live there rent-free, give daycare to our child, and I'd have equity building in the home to be used as seed money for a college fund. The very next morning my father-in-law called and said they were filing bankruptcy and were losing their home to foreclosure. I was so blinded by the potential to solve several problems by buying this house that I didn't spend enough time asking questions about why they were bankrupt and losing their home. I figured that with no retirement savings, the opportunity to find a job in a new market with a super-low rent payment would put them in a position to really put away money for later in life.

Fast foward two years - we had bought the house, were splitting the mortgage 50/50, and things were great. That is, until my mother-in-law was diagnosed with a nasty form of brain cancer that took her life a mere 5 months after initial diagnosis. Dad took over the payments in full and we found daycare for almost 3 times what we had been paying towards the house. About a year later, dad decided to get back on the dating scene, and threw responsibility to the wind as he pursued the likes of a nice older woman. True to form, he chose to date a woman that lived 30-40 miles away from him, and she would never drive up to meet him. After he'd paid off all of mom's final expenses (no life insurance), he blew through the rest of his money courting his love interest. At least he was making the rent payment and keeping his head above water.

Then he royally screwed up at work, and made a mistake that almost landed him in a courtroom. It cost him his job, and all his savings were gone. He had no claim to unemployment assistance, and he had no way to continue paying the rent. After three months of constantly being lied to about his ability to pay the rent, his stress level hit critical mass and we had to have him committed to a mental health facility as he had attempted suicide. After his release back into society, my wife and I have had to ask him to move out of the house. We've got the house on the market now, but she just quit her job to stay home with our two sons, so any savings we stockpiled for her transition to stay-at-home life are now gone trying to keep the second house paid for. With the market in the dumps, and nobody buying houses these days, we're looking at a very long and expensive winter, hemmoraging $1000 a month on an empty house... We don't want to be landlords, and selling a house with tennants is a mess we're not ready to deal with.

If I had taken the time to consider the circumstances through which my in-laws ended up in bankruptcy, I would have gladly helped them make contact with financial planners to help them manage their money and I would stayed as far away from their finaicial disaster as possible. Now my wife and I are struggling to survive the damage her dad's drama has inflicted on our financial stability. Learn from my mistake, please, and stay as far away from them as possible.

If your parents can't make tough financial decisions when they're forced to, they're certainly not going to make those decisions when you're making their lives easier. Adversity is the mother of change.

FWIW,

-Dave

I would say definitely don't give your parents money unless you consider it a gift and can really afford it, and gifts that will help them save money are better than just plain cash. You say they seem interested in applying the ideas in blogs and articles. Maybe the help they need is in applying them. Maybe buy them some CFL bulbs, or even some new appliances if you can afford it, to save them money. Help them cut up their credit cards and set up a budget. Invite them over for dinner so they don't have to go out as often. Maybe pay for them to go to a "money makeover" class.

[Greg]

Everybody else has said it better than I can.

I went through a boundaries issue with my family. Not fiances, but with an abusive sibling (and which holidays I was required to spend with whom, but that is another story). Basically, in my family, when the term "family" is used, it means this sibling. When they say "In our family, we treat each other nicely," it means "In our family, Sibling can treat everyone like dog poop, but we must treat Sibling nicely." The day I stood up to Sibling is the day my family turned on me.

My wife and I read through Boundaries (a great book) and had a few counseling sessions with our priest. Basically, he agreed it was unhealthy to seek out a relationship like that, and having boundaries and a comfortable distance is not the same as being unloving or unforgiving.

The basic premise of the book Boundaries is just has having a clear boundary marker is essential in real estate, the same applies in our relationships. We do not have to allow trespassers. More info at http://www.cloudtownsend.com/

Oh, congrats on getting control of you finances. You owe no one for your hard work. Also, I would add to the proverb "Give a man a fish, you feed him for a day. Teach a man to fish, you feed him for a lifetime." Let a man take all your fish, you starve.

[asithi]

Growing up, my parents gave money to my grandmother and it was kind of expected that my siblings and I would do the same thing when they retire. With certain cultures, having kids are the financial retirement planning. Rather than waiting until that day to do something about, I set up an investment account a few years ago. Basically every month, I drop $50 in it, fully knowing that will help supplement my parents retirement savings. I even got my siblings on board with this plan. $50 does not seem like a lot, but when you add in the contribution from my siblings and interest, that will help pay for unexpected big purchases my parents might have when they retire.

But my husband, on the other hand, does not take any active approach towards elder care planning for his mom. It worries me a little because I have a feeling that we might have to help her out as well in a few years. But that is not something you can stress about. Just as long as I get my financial cards in order. Then we will help what we can, but I certainly would set boundaries.

[suze]

You know what? They're your parents. Stop calling them stupid. Stick to adjectives that are specific and actually describe the situation. Irresponsible with money would be the harshest I would apply to them -- and you could probably ratchet that down to "not well educated in money matters" despite all the money blogs and books they have devoured.

I would say no to further help, in the mot loving way I could. (Unless they are actually in a position where they are starving, of course.)

The only thing I would buy for them or help fund is attendance at a Dave Ramsey seminar. I'm not a huge Dave fan myself but your parents sound as if he would be right up their alley.

[Tom]

Tell your parents that you will absolutely help them solve all of their financial problems!

Tell them to come over this weekend and bring their checkbook, all their checks, their credit cards, deeds to their cars, houses & boats, all financial documents and paperwork for every account or bank or brokerage or debt that they have.

Explain to them that they will be signing over and/or leaving all of that stuff with you, and that they will also be signing a financial power of attorney document that you are having your lawyer draw up. This document will give YOU sole financial control of their assets and estate, much like if they were senile or committed to an institution and you had to handle all of their affairs.

Be sure they know that you will have a Notary Public there to witness and document all of the signings and transfers.

Then explain that after they sign over control of their finances, you will prepare a proper budget for them, design a plan to get them out of debt, create an emergency fund, analyze whether owning a home or renting makes the most financial sense, etc. You will be making all purchases for them and will allocate cash every month to various spending categories based on the aforementioned budget. They will get a small cash "allowance" to buy small things that they need or want, but every major purchase, debt, investment, & such will go through you for the rest of their lives.

Let me know what they say.

[Caleb Nelson]

I agree with the consensus, that it is better to teach them that they can learn to be financially solvent if they put in a little bit of effort. The deal with older folks is they are nearly concretely set in their ways. I've been trying to get my mom to become financially free with me for my entire adult life. Granted I'm only 24, and she's only 43, but I've changed allot over the last 6 years or so, and I'm sure she can make some significant changes in her lifestyle that could lead her straight to the financial epsilon. I'm sure that this is a better way of approaching the situation than to give in to their wants. Giving in would only hurt the both of you.

Caleb
www.mefinanciallyfree.blogspot.com

[Miss M]

Certainly help them, help them figure their way out of this mess. Personally, giving them money doesn't help them, it just adds another revolution to the cycle they are stuck in. Helping them means straightening out their finances and helping them get control, not giving a handout. The problem is, they probably just want the handout. It's easier and doesn't require them to make lasting changes. I've tried talking to my dad about his horrible financial habits, he just starts laughing about it. He thinks it's funny he spends more than he earns. Drives me nuts, and I fear he'll be on my doorstep one day needing help.

[Bill]

Kudos to all for such a valuable discussion. I'd like to ask a follow-up question. How would you handle a divorced, unemployed mother-in-law who's alimony will run out is a couple years? She has not asked for anything but seems to live well beyond her means and expressed anxiety about the end of alimony income. She has some chronic health issues and recently walked away from a mortgage where she was upside down. She has never asked for anything from her kids, but can see her situation getting very bad in a few years. I believe she is very sensitive/ashamed about her financial state.

So what to do? Do I say "I know you didn't ask and I'm just making an informed guess, but it seems like your finances are a mess. And while your not asking for help, I'd like to tell you how to fix the mess." Thoughts?

Thanks all...

[Greg]

Bill,

Personally, I would let your wife handle it the way she thinks is best. Unsolicited advice into financial and family matter is territory where angles fear to tread.

[JimmyDaGeek]

Its unfortunate that some posters don't have "stupid" parents. They don't realize that parents are people and their habits are ingrained and will probably never change. They don't realize that these parents don't believe that they should have to answer to their children. They don't realize that some parents have a belief that it is up to their children to support them in the lifestyle they want to become accustomed to.

You are being put between a rock and hard place. Your parents are putting a guilt trip on you. Don't expect parents to change themselves because you ask them to. Forget about providing anything like a car, gas money, etc, because it will become a money pit for you. They will dictate the car they want, they will spend all the gas money you give them. You will be expected to keep the car repaired and provide the insurance money. What happens if they get into an accident and insurance rates go up? Guess who pays? Are you going to make sure they get the oil changed and the tires rotated and aligned?

NEVER EVER tell your parents what your financial situation is. In fact, don't tell your parents how you are getting out of debt. Let them think that life is pushing you down and you don't know how you are going to get out. Plead poverty for as long as you can get away with it.

It's one thing for an indecisive parent to drive you crazy, asking you to help them make decisions when all they want you to do is vet the decision they made. It's another thing for them to expect you to pay for their decision too.

[dm]

for us its the other wat around with adult kids life in a mess.