Ask the Readers: “I’m Doing Well Financially But My Family Is Not”
Published on - May 16th, 2008 (by J.D. Roth) Personal finance would be easy if it were only about the numbers. But it’s not. Money management not only requires that we master our own whims and emotions, but that we navigate the sometimes rocky waters of our personal relationships. Rachel wrote looking for help with a stormy situation. What happens when you gain control of your finances but the people around you continue to struggle? Here’s her story:
I’m having issues because I’m doing well financially and my family is not. Here is some background information: I am twenty years old and about to move out and live on my own for the first time. I live in California, but am moving to Maryland in three weeks. I am working three jobs to save money for the move, the third (and most lucrative) of which I acquired completely to put directly into my ING Direct savings account. (See? I do pay attention!) I also:
- Have about $1500 saved, and by the end of the next three weeks it will be about $3000.
- Filed my taxes on time.
- Pay my credit card off every month.
- Am planning to open a Roth IRA as soon as I have a little more for an emergency fund.
My mom, however, is drowning. My parents divorced a few years ago and were doing well financially when we sold our house. But somewhere along the way my dad developed a gambling habit and squandered all of his share of the money, and put himself into debt with the IRS. They started taking everything but what he needed for rent and basic necessities. They even took the money for child support because at that point the divorce was not finalized and they saw his child support as voluntary.
That’s when my mom’s debt started accumulating, and it’s just been piling up ever since. She already owes me about $2000 from the past year or so, and every month she asks me to borrow some money for rent, but usually she gets a check from my dad right in the nick of time. I can’t afford to lend her the money because it would put me behind in my goals, but at the same time she needs to support herself and my fourteen year old sister, and what am I supposed to do, let them just end up on the street?
She has exhausted every available resource she could possibly borrow money from, and is looking into declaring bankruptcy because her business is not generating enough income to make up for the small amount of child support she receives, and all of her debt. My dad gets paid slowly because he’s working contractually for different companies as a software consultant, and as he’s not on the regular payroll it can take weeks for the checks to come.
I don’t know how to continue to grow as a financially stable person while knowing this is going on. I don’t know how to keep myself from giving in to her need to borrow money — or should I? Which is more important, making sure my family has a home now or looking out for my retirement in 50 years? I’m just not experienced enough in the world to know how to handle this.
Some readers will say, “Give up and move on.” Others will say, “Family comes first.” But to me (and, apparently, to Rachel), it’s not that easy. There’s a balance to be found. But how? Where is that balance? It’s a difficult question. As a reference point, I consulted my library of 141 personal finance books. Do you know how many discussed this issue? One.
On page 81 of Dave Ramsey’s The Money Answer Book, he explores the question, “My parents are financially irresponsible. How can I help them? How can I forgive them for teaching me their bad habits?” His answer?
Most parents do not want their children’s advice. It’s just a fact of life. They do not want correction from their own children, especially if it’s unsolicited. The best thing you can do to help your parents is give them your personal testimony, give them a resource like this book to start them thinking, and just keep the option open so that they can come to you if they want to.
What do you think? Have you faced a similar situation before? How did you handle it? What would do if your parents did have chronic money problems? Should Rachel move out and move on? Or is her obligation to her family?
Mini-rant: Did you see that stat? One out of 141 personal finance books in my office address this subject. That’s the problem with mainstream personal finance education. It focuses on raw numbers to the exclusion of all else. And most of our financial problems come from that “all else”.
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That’s a very very tough situation. It’s especially made more tough when the family members in question are your parents.
I hope I’m never in such a situation (and I seriously can’t see my mom or dad in such scenarios), but the question asked has no solid answer? Both are important. Your own future well being and your family’s current well being should be equally important — at least, that’s my opinion.
There’s too many variable for Rachel’s situation for me to give any worthwhile suggestions, but one thing I know for sure is that… if the father doesn’t get any help with the gambling issue, and if there’s no communication between Rachel and her mom about Rachel’s financial concerns, then things will just keep going going out of control.
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Is reconciliation possible with your parents? Could they be better together than apart? Obviously, I don’t know your home situation. Divorce can be the destroyer of wealth.
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For me, I’d generally only feel comfortable helping family (or friends) if they’re already making the right financial decisions. Sometimes family may want or need help with medical bills, unexpected emergencies or in financing a home. If it’s their poor decisions and lifestyle that are giving them financial problems, then I’d really hesitate to throw money at the problem. Throwing some additional money won’t make the problem go away. In that case, I might offer some educational assistance, but not straight money, and even then, only if I knew the person would be open to hearing it.
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Key point: this situation is not your mom’s fault.
From what you’ve said, she is financially responsible, but didn’t plan for a long-term emergency of this type. It’s your dad who’s made poor decisions, and your mom and the rest of your family shouldn’t be lumped in with him.
To my mind, this doesn’t count as “My family has made poor decisions and wants me to bail them out” so much as “My family is in trouble they didn’t expect and didn’t plan for, and they need my help.” It wouldn’t be any different if someone were sick, if the house had burned down, or if someone had stolen all the money from the bank.
That doesn’t mean you have to give checks, though. If most of the time, your dad pulls through, one issue is your mother’s financial anxiety. Work with her to help her live more frugally, and once you’ve done that, be her emergency fund. It sucks for everyone– you have to deal with family drama and family money, your mother has to tighten everyone’s belt and is having trouble adjusting, your father has his gambling problems– but you do for family.
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Michelle Singletary (personal finance columnist for the Washington Post) writes about these situations from time to time. Her advice would be for Rachel to figure out how much she can comfortably give her mother or father per month without putting her too far off her goals. Give that amount and no more and don’t have any expectations of ever seeing it again. Be very clear that this is it. If it were me, I would try to get my father into Gambler’s Anonymous and my mother into a legitimate credit counseling organization. It sounds like money alone will not solve their financial problems.
Here are some columns on the subject:
http://www.washingtonpost.com/wp-dyn/content/article/2006/12/20/AR2006122001783.html
http://www.kitsapsun.com/news/2008/mar/16/michelle-singletary-the-color-of-money-if-you-be/
http://www.washingtonpost.com/wp-dyn/content/article/2008/03/12/AR2008031203701.html
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I feel for Rachel. I was in a similar situation years ago. What I learned is that people who have poor money habits (or people who don’t find a way on their own) will not change until they either want to or have to. If Rachel continues to lend her mother money, her mother will never have the need to figure out how to make it on her own. It may sound harsh, but I find it interesting that Rachel is working three jobs — how many jobs is her mother working? It sounds as though her mother has had a difficult time, but many people have had difficulties and manage to do what is necessary to cope with their situations without sucking money away from their children who are just starting out.
Ultimately, I see no real benefit to Rachel’s dumping more and more money into her mother’s rent fund. Congratulations to Rachel, though, for getting her own financial house in order and for starting off on the right foot!
Regarding to mini rant: Sounds like a great book idea for you, J. D. Talk about an unfilled, but much needed niche!
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Yup, telling parents what to do is not a good idea. Talking about what you do with them is fine and may plant the idea. Part of life is learning that you can’t help people who don’t want to be helped (or control people who don’t want to be controlled).
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The question is much more complicated than whether or not the parents are financially irresponsible, or just unlucky. Many, maybe most parents sacrifice savings, forgo luxuries, etc in order to provide for their kids. Private schools, hobbies, sacrificing to live in a better school district, all cost lots of money. Money that a rational analysis would certainly say belongs in savings. However, family isn’t rational. It’s quite possible that parents are at least partially under water financially because of the things they did to provide a good childhood. It’s not as simple as coldly deciding that your parent’s should have been putting 10% away every month. That’s hard to do when they are paying $500 a month for ice skating, or a horse, or private school, or whatever.
The real world simply isn’t that black and white. I’d agree that you definitely do not want to feed destructive personal behavior around gambling, drugs, etc. But uninformed decision making, or somebody that is the victim of a divorce or unexpected medical bills is a different issue.
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Tough call. You can prepare for the future all you want and get smeared by a bus tomorrow. And all your storehouses are for naught. In the meantime, the woman who raised you and helped you to be the responsible young adult you are, is struggling. Sit with her and figure out what needs to be done. Is this a short term problem? Is she taking adequate care of your younger sister while she struggles with this?
I guess the best answer is, at the end of the day can you look at yourself in the mirror and be happy with the choice you made? If this were me, yes, I’d put my future on hold for a time and help out the woman who gave me life. At least until she can get a handle on her situation.
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Whenever folks call in to the Dave Ramsey show with these types of questions, he tells them to read the book, “Boundaries: When to Say Yes, How to Say No” by Henry Cloud. It might be helpful in your situation.
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I have to agree — from the sounds of this, it isn’t his mother’s fault.
You could offer to go through finances with her to see if you can figure out any ways for her to save. You could see if you can find them a more affordable place to live. You could stock her groceries — it would still cost you money, but, it doesn’t translate to “money spigot” the same way as a check.
You should also see whether she qualifies for any assistance. And… at last resort, Chapter 11 sometimes is the way to go.
Figure out what you *can* do without damaging yourself. And take a good look at what “damaging” really means long and short term. If you’re moving to a job with a better salary, it may be easier to “make up” the costs to you now.
I don’t believe that you “always” help family, but, I can’t see giving “tough love” when it’s not the other person’s fault. Sit down with your mother & sibling and see if you can find a way for the three of you to pitch in to help out for a while, and, know exactly what you can give. Mom might have to think about a new job or a second job. Or… sibling might think about a job (though at fourteen there aren’t a lot of places willing to hire you). I’ve known people who started working at that age because of family financial problems.
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See JD, there’s the title of your book “Get Rich Slowly, It’s not all about the numbers”
Great article. This lady is in a tough situation. I’m not sure how I would handle it, but I tend to lean toward the “leave people alone” strategy. Her Mom ultimately needs to learn how to support herself.
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I can empathize with Rachel. I am a bit older than she but have several of the same elements in my story. My parents are still together but have spent a lifetime making poor financial decisions. What’s worse is that they’ve passed their behavior on as “normal” to my younger siblings.
My 25 year old sisters have moved back in with them to help with bills. The really sad part is that they are living in a four bedroom rental that they’ve been in for almost 20 years. They could own it by now. I’ve encouraged them to downsize and apply some of the personal finance principals that I use, but as other posters have noted, giving financial advice to your parents is a difficult propisition. Kiyosaki is right about the need for families to discuss money in an open manner without shame or embarrassment.
My 22 year old brother was recently injured at college and I found out that he doesn’t have insurance. When I asked why he was not participating in his School’s insurance plan, I was told that my parents (who have no business paying for his expenses) could not afford the $125.00 per month insurance payment. I later found out that they’re paying an allmost equal amount in fraternity dues for him.
I love my parents and hate to see them fail time and time again but the conversation turns ugly whenever the topic of finance comes up. I like DR’s suggesstion that you give them your testimony and a copy of TMM or something similar and wish for the best. Do not jeopardize your financial well being for the sake of those that willingly jeopardize their own – even family.
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I have been in a similar situation with my sister, although it’s my parents who keep bailing her out, not me. What I have seen is that if she thinks our mom and dad will send her a check, she will not take on an additional job, or move to a cheaper apartment, or make any other tough decisions. She “needs” the bigger apartment and free time to do her art, you see. So she puts off making hard fiancial decisions because she *can*.
Rachel says that her mom’s business isn’t making enough money. So does she need to take on a second job, or close down her business and go work for somebody who will pay her a higher salary? Move to a cheaper apartment? Now that the divorce is final, can her dad go back to the IRS and make the case that more child support is a legitimate obligation?
If her mom can’t count on the child support, she has to figure out how to make it without that money. But she won’t, as long as she thinks Rachel might bail her out. Because these kinds of changes – cutting back and getting another job – really are agonizingly hard. People will take the alternative if there is one.
Rachel, your mom sounds pretty resourceful and I doubt she’ll end up on the street. She’s coped so far. I think she will be OK if you don’t help out. And if you don’t help now, you have set a precedent that will stand you in good stead for the rest of your life. Otherwise, your family might continually play these brinkmanship games with you … “oh Rachel, I’m one rent check away from being evicted … just $300 … I don’t know what to do…think of your sister.” It will get worse if you don’t stop this now.
I don’t think people who play these financial games with their loved ones are necessarily being irresponsible or wrong – their family has trained them to do it. If you reward your loved ones for sliding helplessly into disaster, then sliding into disaster and calling for help *will become their coping strategy.* My sister is a bright, hardworking, wonderful person, but she has totally fallen into this pattern; and because it keeps working, she keeps doing it. As harsh as it sounds, if she had ever had to spend one night on the street because she was out of money and all her friends were sick of letting her sleep on their couches, I am positive that she would ensure that she never, ever had to do it again.
I have *never* given her a dime, even though I could afford it. So money is actually not an issue between us. I hope to God it never will be. I actually save extra for retirement every month because she has no savings, and I fear she will have to come live with me when she’s too old to work. But I have never told her this, because I believe that if she’s aware she has this option to fall back on, it will become her Plan A, and I would rather it be Plan C or higher!
Don’t get me wrong, I love my sister, but teaching her to be dependent on me would harm our relationship. It would be different if she were disabled or mentally ill; but she’s a healthy, intelligent person, which is sounds like your mom is too.
So consider *not* bailing your mom out to be yet another smart step you are taking as you step out into your future. You sound like really have your head on straight. Good for you! You can give your mom love, moral support, little non-finanical gifts, cards, etc. to show that you understand that she is going through a tough time and that you care about her. Giving her money is not the answer.
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Would her problems be solved by getting a job, moving to a smaller house, or even simply cutting unnecessary expenses? If the house won’t sell, can she rent a room out?
Most likely some combination of those things would solve your mom’s financial problems, although her standard of living might decline a bit (a common result of divorce, sadly).
I don’t think you should sacrifice your plans just because your mom is going through a rough patch. It may sound cold but be realistic — you can’t be a surrogate husband who provides financially for your mom forever. Significant changes need to be made, it’s just a matter of when. In the meantime continue supporting her with what you can spare, i.e. your standard of living will also suffer. Cut unnecessary expenses, get a roommate, etc. That’s the extent to which you should sacrifice, though — don’t give up your career plans, education plans, OR financial security plans.
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Too many things missing here about mom. How old is she? Is her rent reasonable? Does she have a job? The answers to these questions change whose “fault” it is.
It’s a fine line between enabling a mooch and supporting someone in honest need.
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There are a lot of variables to this. Is she already living frugally? Has she gotten a second job? Has she worked out a plan, even if it just means buying a Dave Ramsey or other type of financial book to start? If she’s doing everything she possibly can and still can’t make ends meet, maybe it is time to file bankruptcy.
If your mom is already doing all she can, maybe you should set aside a certain amount that you can comfortably give. Don’t give it to her if she isn’t in need, but if she comes to you about rent, that’s what you can give. You’ll need to find a balance between reaching your financial goals and helping out your mom, but I don’t think you should do one and not the other…IF she’s doing all she can right now.
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It doesn’t sound like the mom is financially irresponsible, it sounds like she is trying to recover from her former husband’s gambling problems and the financial devastation of a divorce.
If I were the OP I would totally help the mom and sister (the sister clearly is not at fault in this situation) if I could. Now, the OP says she can’t help her mom/sister and accomplish her own financial goals.
What I might do is start a mom/sister emergency ING fund and start putting money into the fund and if the mom is in a real crisis (i.e. going to become homeless or a medical emergency) I would dip into the fund and help out. If that emergency doesn’t come up then the OP puts that money towards her own emergency fund or retirement. I wouldn’t expect the mom to ever pay back the funds (if she does fabulous, but if you expect the loan to be repaid it will change the relationship). I would also send her Ramesy’s TMM or another similar book.
I helped out my Mom when she was in a crunch with taxes/mortgage. I was just starting out in my job and had no money myself but I took a cash advance from a 0% credit card (yikes!) to help her. My mom never ‘technically’ paid me back but she had raised me, paid for college (along with Dad) and helped me with professional school costs. And since then she is now retired with no money worries. She also gave us money for our wedding and other large gifts. We never discussed the loan and I don’t expect we will, our relationship is good. I’m glad I could help her at the time.
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If you live at home, you need to help. However Mom needs a plan, because her situation isn’t working and when you move you don’t need to help. Although you may want to. To cite the author JD mentioned Dave Ramsey has a scale of baby steps, and helping others comes after your set up with your emergency fund and retirement.
If she doesn’t have a way to make more, she needs to spend less. I suppose that means moving; maybe even low-income project since the divorce has changed her situation so badly.
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There is no right or wrong answer to this. I was in this exact situation but even worse and for a much longer period of time (technically you could say I’m still in this situation).
I could tell you my story and will if requested, but in my shoes this started in my later years of college and still goes on til today (6 years). In my case, my father’s ex-wife’s refusal to pay child support and my father’s exhaustion from money struggles for nearly a decade has had major effects. I’ve literally “lent” tens of thousands of dollars to my father that I have no expectation of ever seeing because of my two younger brothers.
In the end, you spare/share what you can but you should not stop working towards your goals to do so. Once you start sacrificing goals or important events in your life, you will start resenting your mother no matter what you think. I also agree with Dave Ramsey that people don’t change and your parent(s) will not listen to financial advice from their children.
No matter what people think, there’s always another resource or option a person can turn to. It’s the limits a person puts on him or herself that prevents that person from reaching those resources.
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I really feel for this person, it is such a difficult situation.
I also have to agree with JD on the personal finance books. Forever I was reading them but they did nothing for me because none addressed the emotional stuff like compulsive shopping, our culture of consumerism, etc. Personal finance blogs like this one have given me hope.
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I agree with Ben, Jon, and others above. The problem seems to be the mother’s anxiety. Monetary aid isn’t the best solution. It seems like the mother is trying to hang on to a failing small business. One way to minimize anxiety is to search for a stable job and pursue frugal lifestyle change.
@ COD – If you’re paying for ice-skating lessons or *a horse* for your child and then are in a position a few years later to consider bankruptcy, it’s likely that “luck” didn’t have much to do with things.
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It sounds like your mother still keeps an eye on her finances, which is positive. I think you should keep the lines of communication open with her to make sure she is still getting along, but you shouldn’t kill yourself to keep both yourself an another person afloat. Considering you’re moving to Maryland, the $3000 saved is a good start but won’t last long here. I moved to Baltimore metro about two years ago, and it took about 6 months to recover from those expenses (even with a better salary and a tight budget / savings plan).
Good luck with your family, but make sure you don’t cripple yourself in a new / possibly more expensive environment.
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A friend of mine, Tom, financially counseled a friend of his, Brian, personally for 18 months to help him get out of credit card debt. All money earned and spent went through Tom. Over the course of these 18 months Brian learned which of his spending was pointless and he’s now paid off all his credit card debt.
I guess what I’m saying is, if your Mom is already borrowing from you, then I think you have license to ask her to let you partner with her in her finances. Chances are there are things that can be changed to help her lower her spending and get by on what she has.
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Oy, what a tough question. I would recommend including a “help Mom” item in the budget and figuring out how much she can afford to give each month. The thing is, she doesn’t necessarily have to give it – she can keep it in a savings account and let it build up. When/if Mom needs money, she raids that account. And if Mom gets to the point where she doesn’t need the money, then Rachel can invest it. Adding this item to the budget may mean re-adjusting her personal goals, but at least this way it is predictable. Depending on how much Mom usually asks for and how much Rachel can set aside each month, she may want to “seed” the savings account so that the first request for money doesn’t de-rail the plan.
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You’ve got to look after yourself first. Period. Helping out someone who can’t manage their money just ruins your financial security. They won’t manage the money you give them any better than they managed money they sqaundered. The best thing you can do is take care of yourself, and if you do really well in the future, then you can help them out. Don’t make them dependents because then they’ll count on you. I’ve seen this happen in my family. It’s not pretty.
Of course, if you have a close relative or friend who manages their money well but falls on hard times, by all means help them out as best as you can. With a gift of money, not a loan. Don’t go there at all.
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It sounds like this is largely not Mom’s fault; Dad has left her in a bad spot. It may be she is not making the wisest money choices — if she was used to living well, she may be a hard time learning how to live within a much more limited income (I know — I grew up in an upper middle class family and took years to adjust to a lower income life). Just leaving Mom to deal with her financial problems seems a little harsh to me under the circumstances.
I would urge Rachel to ask herself the following questions:
– If I come from a religious background, what do my beliefs say about this situation?
– What is the most loving thing to do? Sometimes, the most loving thing is, indeed, to make someone deal with the consequences of bad choices. Sometimes, it is helping someone out.
– If my mother is generally trying to make good choices but not always succeeding, how can I help her make better choices? If I were trying but sometimes failing, how would I want her to treat me?
– Did my mother make sacrifices for me while I was growing up (at least one other person has mentioned this)? How can I repay her now?
– Do I buy into the American notion of everyone being independence, or will I choose interdependence instead (which is not the same as co-dependence)? If so, how can I live this out with my mother?
– What are my options, beyond just giving my mother money? Could she and my sister move across the country with me and share a home with me, with my mother contributing to the household expenses just as I would if I lived with her? Are there other ways I can help?
Hopefully these questions will help Rachel figure out some possible solutions to a tough problem.
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It makes no sense for Rachel to try to bail debt out of her mother’s sinking boat if the debt is coming in faster than what Rachel can afford to put in. That’s just delaying the inevitable.
I think there’s a middle ground between Rachel moving away and offering no assistance, and staying and putting all her money towards trying to save her mother’s financial shipwreck.
I think the best thing for Rachel to do is to move out and get her emergency fund built up solidly. Moving out will probably reduce her mother’s expenses, and will give Rachel a chance to get on sound financial footing. If Rachel is seriously worried that her mother and sister will end up on the street, then she shouldn’t move to Maryland, but keep her current 3 jobs and move to someplace in the same city. Then if her mother and sister need a place to stay, she’s got that covered. She can always help her family in non-monetary ways, but that becomes much harder to do if she’s far away.
It makes no sense for Rachel to drown herself if she has no hope of saving her mother from impending crisis. Sure take a hit if it’s going to fix things, but will it fix things?
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Decide what you *can* afford. If that’s $600/year or $6000/year, just know what that number is. Find some balance between meeting your goals maybe a little more slowly, but also understanding that you’re better able to help them when your financial house is in order.
Once you’ve got that number, you’ve got a baseline beyond which you can tell your mom “I’m sorry, I just can’t afford that”.
Don’t plan on ever getting paid back for any of the money you give your mom.
If you think she’d be receptive, give her a personal finance book focused on getting out of debt. It might be helpful if you bring it up saying you just found it, you really like it, and would like her opinion on the topics it discusses, or something like that.
It’s definitely a tough situation, because, as others have said, you can’t sacrifice your livelihood to support your family, but they’re still your family.
Get your sister a personal finance book now, in hopes of helping her avoid learning the wrong lessons.
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I would recommend the PF/etiquette book “Isn’t It Their Turn To Pick Up the Check?” for help on this. For me, I don’t know what to do- I am in situation that is quite similar, and I can’t say I have a better answer.
I think the one thing that stuck out to me was that Mom has her own business, and Dad works non-regularly. I think the number one piece of financial advice I could offer is- get a “real” job, or at least a steady one- yes, it might be more fun to have your own business and be your own boss, but if you need money and are considering bankruptcy, it may be time to start filling out applications.
Also, are Mom and Dad actually divorced yet? A cheap divorce, followed by mandatory child support payments, might help. Maybe Rachel can help pay for the divorce?
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It’s perfectly reasonable for Mom to ask Rachel, at 20 & apparently not a student, to contribute to rent. I think she should write off the $2000 loan & tell her Mom to think of it as rent money — but also make it clear that there’s no more where that $2K came from.
Then Rachel can focus on herself and, if she’s able, her sister. Mom was divorced several years ago, not just a few weeks or months ago — the time of crisis is over, and it’s time for her to take care of herself. (Yeah, Dad should make his support payments properly, but it’s not Rachel’s fault that he doesn’t. That’s between Mom & Dad.)
I know it’s easier said that done to cut off family. But based on my experience with parents’ financial struggles, band-aid loans and gifts don’t change parents’ habits, and they interfere with kids’ attempts to establish new, better habits for themselves. By setting an example for her sister, Rachel may be able to break this generation of her family out of the cycle of month-to-month, paycheck-to-paycheck living — a far greater gift than a few dollars here and there.
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I am sorry if I repeat something above for I did not completely read all of the comments. But from my experience, giving money to anyone in debt is the wrong thing to do. They have gotten into spending habits that need to be broken and if they have another source of income, well that’s what you will become. I learned this from my mother, who raided my bank account. She quickly was taken off because I closed the account. Her spending habits never have changed and now she is living on a fixed government subsidized income in a decent housing project with no car and health issues that limit her mobility.
Individuals have to change their own spending habits, no matter how old they are. Just don’t give them money, that doesn’t give them the incentive to change anything.
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If you’re moving out of home, maybe your mother could move to a smaller place or else take a boarder into your old room. That could help with her finances.
Help your mother with the budget and talk to her about your concerns. Also talk to your dad and urge him to get help if he hasn’t already.
Decide whether you feel more comfortable being an emergency fund when your mother needs to borrow money, or whether you would prefer to give a set amount each money that at least you can budget for.
Hopefully it’s only for a couple of years until your sister is a little older.
You have my full sympathy. I also think it’s ridiculous that the IRS could take child support money – something that is mandatory for him to pay (or at least it is in other countries). In most other western countries your mother would qualify for the single parent’s pension (ie. welfare) – is that the case where you are? It sounds like it’s much needed and a good use of taxpayers’ money.
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JD-Too many facts that aren’t known. On the surface it sounds like the mom is semi responsible and the dad isn’t. That being said, it isn’t just the father that got them in trouble.
It sounds harsh, but you have to cut through the emotion before you can solve the problem or give advice. Listen to Dave Ramsey. What does he do?
-He empathizes (not sympathizes) with the caller. This helps him connect so they are willing to share. It also helps the caller to set aside the emotion and get to the problem.
-Once he has connected and gotten to fact, he begins to ask questions. He also questions their answers to get to the facts and the root cause.
-He only gives advice when he has all the facts.
Dave is an expert having done this for years. He has motivated callers who want him to help. We are in a different situation when it comes to family. First, we aren’t nationally known experts. Second, not parent wants to share their financial problems. If they have to come to you they will tell you the minimum.
I have personal experience with this. Without going into details, the rest of my family is a financial wreck. None were open to discussing the problem or finding solutions. There came a point where I had to turn my back on the problem and walk away.
Rachel has to watch out for herself first. This isn’t being greedy or selfish. It is the first step of financial health. If her parents are not willing to discuss the facts and look for a real solution…
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Let me rewind a few years to 20, or even 19: I was working 50-70 hours a week at two jobs, had transferred from a college 1200 miles away to one that was within commuting distance of my mom’s house, had moved back in to help my mom with the bills, and was doing all the grocery shopping. My mom had a low-paying ($35k/year) job and didn’t know how to get anything better; her credit was still damaged from her ridiculous and protracted divorce six years prior, so all her debt was piling up at inflated interest rates.
I took what I now view as the bad road: an ever higher percentage of my earnings (it became 60+%) went toward stocking the fridge, keeping the lights on, covering my mom’s medical expenses, etc. The rest went to my college expenses, and none of it was left for savings – the gaping financial hole in my mother’s life swallowed anything I had left over (and I wasn’t strong enough to resist her guilt trips and my own feelings of obligation). I sacrificed seven years of compounding (in the end, what I spent would be worth more than $80k today) while I tried to help my mother take a better path. I burned out completely after two years and moved back to an out-of-state college.
I had hoped to help her smooth over the rough patch, get her back on her feet, show her how to be more responsible with her money, and support her while she found a more lucrative job. Guess what? Almost 8 years later she STILL asks me for money, doesn’t make more than $40k, and has gotten in and out of debt through credit cards and HELOCs more times than I care to recall.
It wasn’t my mom’s fault that her spousal/child support was a raw deal, and she really was left in the lurch when my father split. She’s out of viable excuses now.
I feel bad, sometimes, that I have a positive net worth even with my student loans, and that I’m on target to retire early with more than enough cushion. I know my mother needs to retire and literally can’t because she will lose her house. It’s a strange and difficult situation that I deal with day by day.
If your mom learns money management, great! Don’t get sucked into this spiral. Your mom could do the things you want to do – get a roommate, get another job, eat cheap food, put a freeze on non-essential expenses, etc. She has to see the truth of the situation and decide for herself to move forward. If she doesn’t, well…I feel your pain. Good luck.
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Not knowing the specifics your mom needs to look at the following: 1)Can she increase her income by finding a better job, instead of having her own business, 2) Get a second job to supplement the business, 3) lower expenses by moving to a cheaper area or cut back on things, or 4) move in with someone else to split expenses like a friend or someone else who might me be struggling.
Sounds like she should only be paying the basics now like rent, food, utilities, and care for her kids. No extra school costs or college, minimal on clothes for everyone. No eating out. The big change necessary is to increase income.
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I am in her shoes also. My mom has been in financial difficulty as long as I can remember and I’ve given her tens of thousands of dollars up to this point (I’m in my late twenties). I see no end, but I am doing very well financially and I don’t think I can ever say, ‘it’s your problem, not mine’. I now pay for her health insurance and one of her credit card debt. I have no idea what I am going to do when she retires. She could sell her house, but she would be losing so much money if she sells it at this time. The hardest part about this is not letting it strain your relationship with your mom. It’s hard when I expect her to be my guardian – but I am trying to accept the shift in roles.
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My 2 cents.
I believe Rachel has gotten the responsbility at very young age and I commend her for thinking about her family and at the same time being so practical. As other readers have already asked some of the questions like
1) does her mom work?
2) can her mom and sister move to Baltimore with her? ( since California is way too expensive)
3) Do they want the Dad in their future lives? (Sometimes, emotional stress of a bad relationship can bring you down, financially and emotionally)
I am not relationship expert, but one thing I believe in – FAMILY COMES FIRST. Money will come and go, but you have to put the family (or at least parents) before money. Your parents go through a lot to raise you, the least you can do is help them financially for few years.
If I was Rachel, I would move everybody to Baltimore, help mom find a job and live very frugally for next few years ( or at least until the younger sister turns 20).
You are just 20 (it’s great that you are thinking of your retirement at VERY young age), however, waiting for 5 more years and helping your family will give you a sense of satisfaction that no money will ever be able to. Plus, good things happen to good people, so think positive!
Good luck Rachel.
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Unfortunately I have had plenty of experience in this catigory. What I learned is that you don’t give people cash or check. If they need food, go to Aldies or a discount store and buy the food. If they need to pay rent, make the check out to the person or company renting the house. I only make the payment or buy the food after they have agreed to sit down and make a plan to get themselves out of trouble. If they refuse, then they are just wanting a someone else to be responsible and are making excuses not to take responsibility for their own problems. If they refuse to figure out how to fix their problem, I will help them once,after that they are on their own.
You don’t have to buy the Dave Ramsey book, the library will lend it to you for free along with other books and programs on CD. One other book that may help both of you is the Tightwad Gazette.
I do agree that you should help out a little since you life with your mother. But she shouldn’t be dependent on you or your father for paying her bills. She needs to do that. Some people do not take responsibility for thier own finances until they absolutely have to and they emotionally hit bottom.
After my divorce I had money taken out of my ex-husbands check to help me pay for bills that he ran up. I began to panic when it came to the end of the checks. But after sitting down with a financial advisor, I realized that I was doing better than I thought and really didn’t need that check anymore. I just became dependent on it and paniced. But when the checks stopped coming I found other ways to save money and finish paying off credit cards and loans without any problems.
You may just have to exercise some tough love. Your mother will find a way to survive when she is forces to. You are not responsible for your mother. Your mother is responsible for your mother. You can’t force people to change, you can only change yourself.
Good Luck on your new job and your move. I hope your mother gets back on her feet soon.
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One other finance book that does address this is Love and Money: A Life Guide to Financial Success by Jeff Opdyke. Having said that, it sounds like he completely comes from a different situation than your emailer does. Opdyke’s parents have been consistently irresponsible throughout his whole life, and his response to bailing out parents is based on that.
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You’re only twenty. You probably are not as well off as you think. See how you’re doing after you move out. Make sure your solid before helping anybody. Otherwise, two of you will be in trouble.
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Love your blog, I check it two or three times a day.
My frustration with most personal finance books, guru’s and advice givers is that compassion isn’t in their vocabulary. Saving is vital, paying off debt is vital, but family and the needy are more important. Even Dave Ramsey, as great as he is, doesn’t influence people enough to focus on those around them. This girl’s situation is quite difficult, if she goes it’ll break her own heart. If she stays, it’ll be awesome to see her bless her mom, but really tough on her own psyche. It’s shameful that personal finance experts influence people to be extremely selfish with their finances rather than to be giving people.
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Nowhere did I read anything about how this young woman was paying her share of the expenses at home. Perhaps she just left that out, but it’s been a big beef of mine when earning grown children expect their parents to pay all their expenses for them. It really steams me up and I see it all the time: selfish grown children who think everything is for them them them.
This young woman should be paying 1/3 the food bill, 1/3 the electric bill, 1/3 the cable bill, 1/3 the rent, 1/3 the insurance, 1/3 the heat… she talks about “loaning” money to her mother, but seriously, this shouldn’t be a loan. From what I read, it doesn’t sound like she’s even carrying her OWN weight, let alone being forced to help carry the weight of the people who ought to mean the most to her.
I do not think it is this child’s place to lecture her mother on how best to handle money, but I do think it’s this child’s place to pay her fair share at least. Doesn’t matter what the father should or shouldn’t do. This is a grown-up now, and she needs to step up to the plate and do what needs doing.
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J.D. – So is that topic going to be in your book? That could be a great new direction and could fit really well if your book is based more on personal experiences and not just the numbers. I’m purely speculating here
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How much is Rachel contributing on the rent front, in total? I don’t think having to help with some of the shared living costs is too much to ask – if she’s 20 and living at home, not going to school, working, how is living with her mom different than living anywhere else? I’m guessing she’ll be paying rent when she moves to MD, right?
I second/third/whatever the commenters who asked why Mom isn’t taking up a second job. The sister is 14 – can she be babysitting on the weekends for her own spending money? I do not agree, however, that Rachel should move the family to MD with her. She doesn’t really have *that* much money to cover her own moving expenses, and her mother would probably resent the infantile treatment. It’s not a simple solution either with Mom having a business of some sort and Little Sister in high school. Best of luck to her though.
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In my culture, we would do absolutely anything for our families, even if they had made their own mistakes.
That being said, though Rachel is doing well for a 20-year old, she is not well off enough to support a family of 3. Loaning her mom money would only put Rachel in debt and delay – but not halt- the bankruptcy. (And the whole family might need the money in case of an emergency). Rachel needs to work with her mother to reduce costs or figure out how to increase her mother’s income. Loaning the kind of money Rachel could afford would be like placing a small bandaid on a gushing wound. You have to watch out for your family, but you need to find a plan that has a chance of succeeding.
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Hopefully the person writing is paying for room and board while living at home.
That said: Its worth noting that its not like the person writing in is really doing *that* well. Considering she’s 20, she’s doing well. But she doesn’t have much of an emergency fund and is about to move out on her own. Its not like she has accumulated big savings.
Is Mom’s income low because her business isn’t doing well? If she could cover her bills by getting a “regular job”, then Mom needs to do just that. End of story. (I have lots of respect for entrepreneurs and small business owners, but not when it means leaning on family to support yourself or your child.)
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This is a BIG issue in my family. I’m 26. My older sister is 34. My little sister is 22. Our parents are pretty much broke. My little sister *finally* after so many months and years of being a financial strain on the entire family, has found a full time job and kept it.
My older sister caves in a lot when the family needs money — she earns the most and is doing pretty well. After a few years of bad financial decisions, I’m finally doing well also (paid off CCs, got some savings, opened a Roth IRA, etc).
I used to be willing to give money to my little sister when she needed it for emergencies, but the problem was that every couple weeks, another emergency would come up. Finally I said, look, either get on a budget and stick to it (and I’ll help!) or I’m not giving you any more money. Well we made up a budget for her, but she did not stick to it. So I cut the purse strings. I started paying the phone bill for my mother instead (I’m on her family plan) and said mom, you deal with it. The money is going to you instead. So I shifted the burden. If my parents really wanted to fix the situation, they’d put their foot down with my little sister. (They never did.)
Fortunately, she finally found a job before everyone hit rock bottom. I still give her money to help pay for her medications (no health insurance yet), but now that she has a steady income I’m asking her to pay me back.
My parents are still poor, but they have their own life decisions to make, and I’m trying to do my best to establish a decent lifestyle for myself so that I’m never a burden on them or society in general. And that’s what it comes down to.
Figure out where your values lie and draw up the boundaries. You’ve gotta take care of yourself first.
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It sounds like this family is trying to do things on their own, and should be finding out what the community offers — there may be a state program to ensure that the child care comes through, and with a 14 year old in the home, there are probably some other social programs to help her. Often, it is hard for people to let the rest of the world know that things aren’t working, but R’s mother should be talking with her church if she has one, with her local authorities and so on, not just depending on family members who are not in a good position to help.
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Wow. My comment probably won’t even be seen in this sea of responses!
Anyway, I think children have an obligation to their parents and immediate family members, just as their parents had an obligation to the child. Just as the parents shouldn’t allow a child to starve or do without, just because it would get in the way of the parent’s personal financial goals, so the child should not treat a parent that way.
Now, if the parent were getting herself into this mess, or if she were refusing to do things to make her situation better, then I can understand withholding financial assistance to a certain extent. (But not to the extent that her mother becomes homeless, or she’ll have bigger problems than a mom who asks for help with the rent from time to time!)
Parents often give up an enormous amount to raise a child. It seems inconceivable to me that the child should be unwilling to help the parent out later because it will interfere with her financial goals. Note that it’s not because she’d be doing without food or shelter, but because it would interfere with her goals. I’m flabbergasted.
Having said that, the mother should get a real job that pays a steady income, possibly get a roommate, sell things she doesn’t need, and do whatever else she can to help herself. Maybe the daughter can sit down with her mom and say, “You need to do a, b, and c, and then I will do x, y, and z to help you.” It shouldn’t be all one-sided (if that’s the case).
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