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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I stayed up late working on future entries. I woke up late, too, and what did I find? Fifty outstanding comments. You folks never cease to amaze me.
I think all these responses are great. And I wouldn’t worry if you think you response won’t be seen. I have a feeling Rachel will read through all of these.
Thanks, everyone.
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I’ve been down this road too with my own parents, as recently as a couple of years ago. My parents had absolutely no money sense and, as a result, neither did their kids. My father always drove old wrecks that had to be pushed downhill to start in the mornings……and, lo and behold, I get a phone call from my mother. My father, as usual, hadn’t bothered with oil changes or maintenance and their car had taken its last crap in the driveway. Could I give them the money to buy a new car? My mother sounded like she was about to hang herself so …. I wired the money they needed to buy a car they had already seen on a dealer lot. They bought the car AND I never saw one thin dime in the form of a repayment. Fast forward a couple of years and they are in the exact same boat again …. the nice car (I) they bought? My father forgot to put oil in the engine and the engine seized right before my mother got on the freeway. No more car. They asked for more money and told them straight – NO. I told them they were going to have to either save or borrow because I just couldn’t afford it with 4 kids to provide for.
My advice to Rachel is this: You should help only as far as you are financially able. Parents who are financially dependent upon their children are basically people who, for whatever reason, CHOOSE not to change their relationship with money. Parents like this also cultivate a sense of entitlement with their children – what’s yours is mine. Wrong. If you keep propping up your mother financially it will NEVER end. Ask to see her finances and find out what she’s spending money on. Help her to see where she can cut back. Help her to figure out how to live on what money she has coming in right now. Then, discuss what it is she can do for herself to become more financially independent. If it means going back to school to acquire skills she doesn’t have, that’s what she has to do. If it means losing cars or property (if any) then so be it. Your family should not be looking to you as their breadwinner. By all means, help out where you can and IF you can but there has to be line drawn otherwise you WILL be the breadwinner. Permanently.
If there’s one other thing I’ve learned in this life it’s this: Easy come, easy go. That cliche was true indeed when it came to the car I bought for my parents.
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Tough one but not impossible to deal with.
It is about boundaries and they can get smashed by family members. If it were a business proposition, would that change the equasion.
You could sit down and work out a fair contribution that you could have made after 18 years of age for living at home ( so if there are 4 of you 25% of the living expenses).
Secondly you could draw up a contract similar to the one we offer our children : yes you can borrow money from us but I want the amount in writing with negotiated interest rate and a payment date. That way its a business deal : they pay you back with interest and everyone knows where they stand.
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This is all great advice. I loaned money to my dad once, and then realized it wasn’t a good idea. I have since given gifts of money to family members, but I don’t loan it anymore. It creates too much stress.
Also, Dave calls it Powdered Butt Syndrome. Nobody wants to take advice from somebody whose diaper they have changed.
It is a good idea to find someone that they trust and will listen to, and have that person give the gift of a personal finance book.
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I think she should help her family, but she needs to define “help” correctly. Helping does not mean enabling, and it does not mean throwing money down a black hole. Her mom needs a long-term solution, not triage from her daughter every month. Her mom and sister need to learn financial skills and financial responsibility. Her mom’s living costs sound low, so her “business” is obviously crap if she can’t live on the profits. The mom needs to get realistic and get a real job. Or a second or third job if she wants to keep her business. Like others have said, the sister also needs a job. I worked since I was 11 or 12, and it was only a benefit – I learned work skills and how to save money young, and I built a great resume for future jobs.
I hope that this woman goes on with her own life, stops acting as a non-stop emergency blanket to her family, and gives her family the opportunity (if they choose to take it) of learning to be financially responsible and getting more employment.
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This is my second post –
Sorry I didn’t read carefully that her mom runs a business. My bad ! But obviously the business isn’t doing so great. So leave that and get a regular job?
Thanks
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When making a decision like this, I would suggest you put yourself in your mom’s shoes. Playing devil’s advocate here: She has just been through a devastating event and is struggling just to pay her rent and put food on the table. Now her daughter, who she made sacrifices to raise, is in a position to help her out but is hesitating because she wants to fund her savings accounts.
Another way to look at it is whether your savings accounts should really take priority over your mother’s and sister’s basic needs?
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@Anne: the daughter didn’t ask her mother to make whatever sacrifices she did to raise her. I’m a bit tired of parents acting like their children are insurance policies and that their children owe them something. Whatever happened to the joy of having children in the first place?
There’s a reason why flight attendants instruct people to secure their own oxygen masks before assisting others. If the daughter depletes her own savings to “help” her mother, they BOTH could financially drown. The daughter needs to have her own savings cushion. She can help per mother, but that doesn’t mean giving her a handout. I don’t think she’s in a position to do that with the small amount of savings she has. There are other ways to help. Other people have weighed in with excellent suggestions.
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I don’t think ANYone has enough experience to tackle this. Things that might make the decision easier are if the Mom is irresponsible with money and could have been in a much better financial position if she’d made some obviously better choices. But if that’s not the case, and responsible people are struggling, it becomes a personal decision. I think Rachel would do well to decide, if she DOES feel the need to continue giving money to Mom, how much she can budget for that purpose, and limit it to that each month. (But don’t tell Mom you’re budgeting for it each month, or she may come to expect and rely on it, if she doesn’t already).
Side note about “loaning” to family: About 4 years ago, I inherited some money when a relative passed away. My dad later asked for a small loan, which I’m sure was very difficult for him to do. His wife spends a LOT and they were in a very precarious financial position, and I think it was out of desperation that he let me know their problem. Neither of us ever mentioned it again after I gave him the check (he never repaid it and I never asked for it because who wants to have to do that to family?). I finally let it go, and could consider it money I gave away and not feel resentful about it. (An ex of mine lived by the motto of not loaning something out that you couldn’t afford to never see again.)
So I don’t think Rachel will see that $2,000 again, and should probably consider it a gift to her mom. Which means she then needs to decide if she can afford to give any more.
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I know some would disagree, but I think the best course for this young woman to have a heart to heart with her mom, but move and start her own life. I’m not saying cut them out of her life, she can help by listening and talking to her, educating her in PF, heck even have her call into Dave Ramsey! emotional support, even small amounts of money that the daughter won’t not miss, but no more.
It is not her Mom’s fault, but it sounds like her mom needs to readjust her expectations regarding financial support from her ex husband and her personal business, and figure out where to go from there. It may mean a regular job, downsizing their home, a number of things. I DON’T think it is a good idea for her mom to then think well my daughter can now be my financial life line and drag her down with her. I would hope that her mom raised her with the hope her child would become an independent adult and be able to pursue her own dreams and future. By leaning on her daughter at this critical time, she is undermining all she has worked for in that regard, will possibly create a dysfunctional family relationship, and is teaching her younger daughter very bad lessons.
I know. I was in a similar situation with my parents, in particular my mom when my parents when through a bad divorce. I moved away. My 3 other siblings continued to live nearby. I’m the only one of the kids who does not have a dysfunctional emotional/financial relationship with my parents. Now that I am more financially secure I do help out my mother when I can, but I will not sacrifice my or my own family’s emotional, financial security for my mother or siblings, and I would expect them to do the same. Tough love is still love, in fact it can be more real love because it is based on reality, not dreams and fantasy.
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It’s a huge choice but it seems like there might be some sacrifices if you need to help out your mom. My family is important to me but so was paying off my student loan.
Personally, after graduating to help out my parents I had moved back home and paid them rent rather than pay another landlord. This help put in an extra cash in every month to them and help out around the house but I lost a lot of freedom. But I was still able to pay down my debts, save some cash, plus I saved a bit more since my mom could cook at home and I would barely eat out for dinner.
Right now, I’m married and moved out to a condo but we had budgeted $400 a month to give a portion to both our parents but we make sure to save what we need for our retirement and investments. Our emergency funds is a lot lower than what we would like but I’d feel a lot more stress if I knew my parents were having a hard time.
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I hear people saying the sister should get a job. But unless she has transportation, this will be difficult. In addition, she is only fourteen, so she is not legally allowed to work in many states.
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I think what you do clearly depends on the situation. If your family or family member has been responsible, but has hit a spot of bad luck that was beyond their control, then yes, family is family, and you should do what you can to help out. So long as they continue to help themselves as well. Even then, you need to look out for yourself, especially if you have a family of your own. Any responsible family member would understand and probably insist on this. On the otherhand, I see no need to feel obligated to help a parent or family member, whether it is monetary or otherwise, who has consistently proven to be irresponsible. Even if it means they end up on the street, and especially if you or others have reached out to help but now find yourself a veritable “ATM” machine. I have a parent who has been irresponsible of all their lives, has never taken the opportunity to improve themselves even when it is pretty much handed to them, and yet blames pretty much everyone else in the world for their lot in life.
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@Carrie: Of course the daughter didn’t ask her mom to make sacrifices. That’s just what families do for each other. The mother shouldn’t have to ask, either.
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I know I already contributed, but I had an additional thought that sort of piggy-backs on what Anne Keckler said:
While the mother should do her best to find a better paying job, I’m not sure about the wisdom of finding a second job. My kid hasn’t hit her teens yet, so I’m not speaking from personal experience, but from what I understand about the teen years, it is good for a parent to be there for the child. Two jobs for mom would mean that the sister would be virtually parenting herself (unless dad picks up the slack — and I wouldn’t count on that).
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Anyone who wants to do anything in life, to become a person in their own right, must beigin by killing their parents (metaphorically!). When we kill our parents (metaphorically!), what we are really doing is sloughing off the imost layer of false context in which we are encased and by which we are defined.
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I agree with other posters that helping the mother would not make Rachel an enabler. This makes it different than the tough love situations where denying help is the most loving course of action. So, assuming that Rachel is going to help, the question becomes what is the healthiest way to do so. I would suggest that she figure out a definate amount that she is able to contribute and send this much regardless of the specific situation for her mother that month. From a relationship perspective, this is the clearest way to set boundries and define responsibility. Otherwise, each help request has to go through the emotionaly exhausting compromise where mother and daughter are wondering how much is needed and how much can be given. From a financial perspective, this allows both mother and daughter to have the awareness of money coming in and money coming out. This awareness is a crucial step in being financialy successful. Once the mother knows how much is coming from the daughter, she can make the changes in living expenses that take into account the reality of her income. From Rachel’s post, she seems like a planner, and psychologicaly she will feel much more in control of moving toward her goal if she knows how much money is going to what (including the check she sends home). She will be more able to “give every dollar a job to do”. Once this financial support is set on autopilot, mother and daughter will be better able to move beyond the financial relationship and care for each other as loving family members. Overall, I hope Rachel feels that the GRS community feels for her as she undergoes this messy curveball life has thrown her.
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@Carrie – We aren’t talking about oxygen. We’re talking about basic necessities vs. a retirement account. There is clearly a difference in priority between the two.
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I am currently reading “Why We Want You To Be Rich” by Robert Kiyosaki and Donald Trump, in this book Robert, most of all, discusses about how we in America always solved our financial problems temporarily and how we us a country just keep making things worse. Robert believes we should solve the problem by teaching people about how to be financially intelligent.
I think sitting down with your mother and father to discuss their financial situation and how it’s affecting you would be a good start. Dave Ramsey says “Most parents do not want their children’s advice”. If your parents don’t try changing their ways after your attempts to get them to do so. There is nothing you can do and unfortunately, those are people who don’t want to help themselves.
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I can really sympathize with this woman, because I have faced a very similar situation with my family over the past 7 years or so.
I want to start by explaining the difference between helping and being codependent.
Both my parents have had financial problems in the past, and I have chosen to help my mother as much as I can and not to help my father in anyway. My father had financial problems because he was irresponsible with his money (he was a drug and alcohol addict). My mother had financial problems because she got laid off a few months before 9-11 when the electronics industry plunged and was un able to find work at anywhere near the same pay she was making at Arrow Electronics for several years. I think it is awful for people to assume she wasn’t trying, and that she wasn’t accepting any work she could get. Most companies won’t hire someone with 25 years experience in their field into an entry level position because they know she’ll quit the minute something better comes along. My mom eventually took a job at a fast food restaraunt, but she still had bills that reflected her previous 60k salary. She tried selling her house, her car, everything, but she was upside down on all of it and no one would buy. She ended up filing for bankruptcy and losing everything, forced to move in with her mother. She then had trouble looking for a job that pays a livable wage because most companies won’t hire you if you don’t have a reliable source of transportation to work (and around here, public transportation is not considered reliable). She was un able to buy a car, even a beater, because she didn’t have a pay check.
I came back from my deployment around that time and bought a car, which I let her borrow to look for work. She eventually found a good job, and we carpooled for a few more months until she could afford to buy a car. She was working on getting some of her debt paid off, and I was working on going to school, so we decided to rent a place together to keep costs down for both of us. Although she’s been laid off a couple more times since then, most recently when the mortgage lender she was working for tanked (because the economy is so great right now), my mom has always been able to get back on her feet pretty quickly when she’s been able to get a little support. Things are really looking up for us now. Her credit is on the mend despite her bankruptcy (she’s in the high 600s), shes restarted her retirement savings (she had to use all of her previous savings in the time before her bankruptcy to try to keep her head afloat), and she and I are getting ready to buy a house together, which I think will be a great investment.
My mom thrived with my help.
My dad is living in a hotel, last I spoke with him, but he’s at least gotten help for his addiction problems. Had I helped him financially, it would have just enabled his problem, he needed to hit rock bottom. My mom was working very hard but was a victim of the terrible economy. I think her survivor story is one to be congratulated.
My suggestion to the reader is to help her mother and sister as much as you feel you safely can, even if its only giving her 20 dollars a week. Or find non monetary ways to help your mother. Carpooling was probably the biggest thing I did to help my mom find a good job. Think about what else you can do.
Good luck.
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Man, my entire family history is peppered with financial difficulties. I’m very, very shocked that I managed to be fairly financially stable, even though I was not making enough to make ends meet until recently. The gist of it is that my parents make enough to support themselves nicely, but my older sister mooches off them as much as she can, and never has supported herself at the age of 35. This caused them to lose their home, and is constantly putting them in jeopardy of not being able to pay the bills each month.
Suffice it to say, there are things I do to try to help out a bit. When I visit, I take them out to dinner (I’m 1200 miles away, so it’s not like an every weekend sort of thing now). I buy groceries for ME to eat, and happen to spend more than what I need and I can leave it when I’m gone.
I give them useful gifts for Christmas and birthdays, like new clothes for work and such, so they don’t have to spend money on that. They know I’d rather they had a roof over their heads than a gift card, so I’ve told them not to get me gifts anymore.
Since I lived at home for about a year and a half before I moved out of state, I “pay rent”. I couldn’t while I lived there because I was underemployed (although I’d do other things like cook dinner, clean a bit, and babysit the nephew), but now that I can afford it, I’ve set up an Ing account with my Dad’s info, in his name, but he doesn’t have access to it. It’s attached to my checking account, and I deposit small random amounts in there with every paycheck. It’s not much, but it does add up. I cleared it out 2 years ago when there was a plumbing problem, to help them pay for it, and it’s back up to $200 now, so it’s kind of like a secondary emergency fund for them, and my little sister knows to get a hold of me when they need it.
I won’t do anything more than that since my older sister is still mooching. Their problems all result from her, and even though they sort of recognize it, they feel helpless to change it. They told me that when I went to college I had to support myself, they told my younger sister the same, but when it came to my older sister, they just can’t do it. Excuse after excuse works for her, but it’s what’s holding them back from being able to do anything.
I’ve managed to pay off my credit cards and other debts within 2 years of getting a decent job (thank GOD), and the only thing I have left is my student loan debt. But, that’s $40,000, and I have no savings for a house. If I do more than what’s above, I won’t have a home for them to move into when they get old.
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I agree with a lot of the previous posters:
– “Loan” to family = gift; if Mom pays you back, bonus. Otherwise, she’ll feel guilty, angry, and controlled, and you’ll feel angry, martyred, and used. It’s not good for the relationship to expect repayment.
– Is Mom doing anything to reduce expenses or get more income? If her business isn’t covering her expenses, is she taking measures to fix that? Can she rent a cheaper place, economize on clothes, etc., or is she maintaining a lifestyle? Throwing good money after bad won’t help her in the long run. You can’t tell her anything, but if she’s paying for expensive entertainment and telecom but not covering the rent, you can explain that you aren’t willing to pay her cable or cell phone bills.
– Are you paying rent, utilities, food while you live with her? You probably should. It sounds kind of awkward to be saving all your money for yourself instead of covering some of the household expenses in this situation.
– Once you get out on your own, make sure you’re financially secure before you “loan” her any more money. (Insert the standard airplane “put on your own oxygen mask before assisting the other passengers” analogy here.)
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I completely understand what Rachel must be going through both financially and emotionally. I am in a similar situation in which I kept bailing my mother out from her own bad financial decisions as well as a streak of bad luck. While in college this left me with a credit card bill of $8000 and a total debt of $50,000 before I even graduated from college back in Aug 2007. Now almost a year later I work a full-time and part-time job to make ends meet and rarely spend on “luxuries” like eating out but at the same time I’ve dropped my killer credit cards to less than $4000 and saved 1/3 of what I need for a 3 month emergency fund. The rest I hope to pay off in the next 2 yrs.
Rachel, the best advice I can give you is to remove yourself emotionally from the situation. This will save you from a lot of anxiety and trouble and will also help you take more control of the situation. All the frustration with my moms decisions almost broke our relationship. If you really want to help I think the best way would be as any financial sound person would tell you is to create a budget plan with your mom. See where she can cut down or can work with existing creditors. Currently, I’ve taken over my moms finances and give her a weekly allowance so she never misses a payment and she can never go over budget. Also, I’ve secretly been saving money from her paychecks for an emergency fund. I don’t tell her about it so she doesn’t take for granted the allowance she gets thinking she can fall back on that emergency fund. Remember, you cant always bail your mother out if its her mistakes bringing her down. The only thing you can do is guide her towards better options. I was 20 when this happened like you and now I’m 24 only a few years later things are already looking up
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I’ve been in a similar situation, right down to a father with a gambling problem. I understand your dilemma on both sides of the coin. I think it’s really up to you and the unique situation your in to find the balance. Have you tried explaining your point of view to your parents? Let them know you want to help but don’t want to drown in debt as a result? It might help.
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If I were the poster, I would concentrate my efforts on helping mom become stable – either by helping her find more sources of income, or helping her cut expenses, or both. Just giving money is a band-aid that doesn’t fix the problem.
I’m sure your mom is responsible, but it sounds to me like she’s not used to living on this sporadic income (not that I blame her – my mom went through some of the same problems when my parents divorced). But if she ends up depending on you rather than consistently living within her means, it doesn’t help her, and it certainly doesn’t help you!
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As a follow up to me earlier post (back at #18) I forgot to mention that my mom, like the OP’s mom, was running her own biz that was not making any real money. She did eventually get a money making job but it was hard for her to give up on her biz dreams.
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To me there are two kinds of loans: the kinds that are for a one-time emergency and the kinds that are for a recurring emergency. I sometimes loan or give money for the former, but I’ve found it’s a big mistake to do so for the latter. It helps for one month, but then the next month, they’re back in the same position, as if you’ve done nothing at all. It’s depressing.
Rent is a recurring emergency. Mom needs to find a way to reduce her rent or other recurring expenses or to increase her income or both until she can live within her means. That is the only way to keep her from having emergencies every month.
I haven’t read the other comments, but I expect they, and other sources, include many good ideas she can try such as moving to a trailer, getting a roommate, getting a second or third job, or living without a car. Anything that will work may sound drastic, but it doesn’t have to be permanent. (Note: bankruptcy is drastic, too, and she may still have trouble making ends meet afterwards.) As the debts are paid off, her interest expense will decline. Child support has nowhere to go but up. Her business may grow. And some changes may turn out to be less drastic than they at first appear (some weirdo frugality things turn out to be fun!).
I’m sure this is very stressful for Mom, having doom impending every month and having to beg for money. So she may be willing to evaluate her spending and try scary-sounding changes so she can take back control of her life.
Best of luck.
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A similar situation was happening in my family. The total income was not so much a problem as the spending decisions. People CAN live on very little, but they often don’t (you cite your father’s gambling).
When family members got sick of supporting one particular group of relatives, that group was forced/coerced into getting a financial manager. They are SO MUCH BETTER OFF with no change in income. The financial manager gets their paychecks, sets the budget and doles out the money, pays the bills. Everyone feels better. The former borrowers feel freed from the emotional load of owing money to family. The lenders are no longer awash in guilt and stress over this part of the family.
If you MUST give support, make sure it is a set amount and a set time limit. This will be painful, but an alternative is ending up supporting your mother for the rest of your life as she will have no motivation to learn to live within her means and/or improve her means.
I’m a single woman and live well within my means and for many years friends and family assumed that meant I had money to lend/give to them. Most are now disabused of that notion.
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She needs to go ahead with her plan to move out and to pursue her financial goals, but at the same time she’s still young enough that she can be a little flexible with how much she saves for retirement.
Since the mom has asked and continues to ask for money, the daughter has every right to give financial advice. The mom may not like it, but if she’s asking for help, then it’s better to help in every way she can, not just financially. In fact, the best thing she could do is help her mom find a way to get a new revenue stream, help rework her budget and do what she can to make her dad stop gambling.
Also, if her mom is in as dire straits as it seems, now is the time to do drastic reworking of the mom’s budget. As in cut out everything that’s not an absolute necessity. That means everything but food, shelter, water, electricity/heat and transportation is out. Buy clothing only to replace something that can’t be used anymore. No gourmet or take out foods. If she can get a cheaper house or use alternative transportation, do it. And etc. I’ve lived off of $40 per week at one time (which basically paid for food and gas) while in between jobs. It can be done.
The goal is to be able to help mom get out of her fix while still being able to put away for herself. And to do it as quickly as possible. If drastic action isn’t taken to pair down her mom’s costs and boost income, the daughter is going to be supporting her mom a lot longer than she’d like to and runs the risk of not only her mom sinking into a deeper pit, but of getting dragged down with her.
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Family comes first no matter what for me!!!
I did face a similar situation but honestly it was not that bad. This is what I did, hope you can also follow similar footsteps:
1. It was very difficult for me to convince my parents to make them think that I was telling them the right thing, they always felt a kid is advising us (How can he do that). I proved to them that to understand things, age is no barrier. I won their confidence. (You need to win their confidence, else it is very difficult to move ahead)
2. I started with budgeting, I asked them to make sure that every penny is accounted. We got to know how the money comes and money goes.
3. I asked them to stop spending on certain things that I felt it was not necessary and they did agree to that and slowly it was removed. It was a gradual one and not a abrupt one.
4. I started helping them to save up money and invest. My parents were very afraid to invest and I had a real tough time to convince them about investments.
The most important steps are 2 and 3.
In India, we follow a culture that bounds the parents and children together. We all stay together and enjoy life!!! In most of the houses parents don’t listen to their own children in any matter. It may be a shock to you, but the truth is that we still believe in arrange marriages, i.e. the parents select the partner for the kids. In such a environment my parents do listen to me…
All the best, Rachel!! Keep gathering knowledge about personal finance and impart the same to the others around you..
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“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?”
What do you want to do? Do you *want* to give her the money, but are afraid you’ll hurt yourself?
That is what it sounds like. A few posters have said “set aside an amount and don’t do any more than that”. This is a great idea. Then it is just another line-item on the budget.
But never, ever, let anyone who might receive that money know you’re doing it. Even if your mom is just going through a tough time now, it is hard to work yourself out of a hole with motivation if you know someone else is going to keep throwing dirt in to help you out. You don’t want her to depend on you at this time in her life!
And if your mom is being weasel-y, you don’t want that either
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Although it sounds like one party is more responsible than the other, there are many considerations. Divorce is never just one party’s fault. There are always ways that both parties let things slide, failed to express love or exercise moderation, failed to think of the other’s needs first or provide extra attention during a period of temptation, etc etc.
Considering that divorces are sometimes inevitable, it is also necessary to look at what a person’s prior preparation has been. Did they receive a college education so that they good obtain gainful employment should it become necessary or did they just assume that they would be married all of their life?
Did they take care of themselves and really improve themselves constantly so that they remain attractive to an eligible future marriage partner even after decades of marriage?
Even if these things were overlooked and the divorce caught her largely unprepared, what is your mom doing now to get out of her quandary? If she is not able to include in her plans some kind of education right now that would allow her to get a better job in the future, then it is not a sustainable plan. I would not lend money on a consistent basis unless I knew that these kinds of sustainable plans were in place.
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Divorce has a tendency destroy both parties financially. At least now the mom is not responsible for the dad’s IRS obligations. As for child support. The mother can contact her local Child Support Services department and have it documented thru the State or City what the child support payment needs to be. This will at least alleviate some of the IRS garnishing in the future.
As for contributions she can provide a grocery store gift card to her mother, helping with groceries versus cash. Another possibility is to help the mom advocate for herself with the Landlord to establish a payment plan for the back rent. The goal would be to empower the mother to set up a plan to work her way out of debt, through counseling or researching resources. If the mother is asking only for money and does not welcome other type of help, then bankruptcy maybe the only solution for a fresh start.
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Rather than offer advice, I’ll share my experiences.
Back when I was about 20, I was a full time student living at home with my mother and my four year old nephew (my eldest brother’s son, whom he couldn’t care for.) I was working part-time to offset my college expenses and to contribute to the household. My family was relatively poor, but not poor enough to get much in financial aid. (We were poor enough until Reagan came along and slashed financial aid funding, but that’s a different story.)
Things were stable enough until my mother began to have health problems that were serious enough to cause her to go out on long-term disability. Unfortunately, it took over a year for her benefits to begin, so during this period, I had to quit school and work full-time to keep the lights on at home.
My income kept the household together until a lump-sum check for 15 months of benefits showed up. If I wasn’t there to do that, I’m not sure what would have happened, and I don’t regret my decision. (I do resent that the additonal income destroyed my ability to get any financial aid at all, which seriously delayed completing by BA.)
Also, for about six years, I sent my grandmother about $400 a month to pay for her prescription medications. Again, no regrets even though I had almost no income for four of those years while I was in graduate school and while trying to start a business.
By contrast, my eldest sister (16 years my senior) borrowed money from me to help pay for some professional training she was getting through a local college. It seemed like a reasonable request, and she insisted it was a loan. Of course, I never saw the money back, and she asked me for more money several times after that. The whole situation damaged our relationship very badly.
The only bit of advice I’d give that if you do choose to give your mother financial help, you should be very clear about whether it’s a gift or a loan, and what any repayment expectations are. If you do choose to make it a gift, also be sure to clarify if it’s one-time or something you can do on a regular basis. This clarity is the key to keeping your relationship with your mom healthy.
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My advice would be this, if you choose to help your mom out, (and it IS a choice, not an obligation, and totally up to YOU as a member of the family contributing what YOU have worked very hard to earn) take a look at your goals and current budget. If you want to help, make that help a budget category and sock away $10, $25, $50 per month, whatever you can afford to contribute. I wouldn’t offer a lump sum out of your savings, but rather, would budget for what will essentially become a known expense. If it looks like your mom and sister are hitting dire straights you can decide whether or not to save up a sum of “bail out of trouble” money, or if they would be helped more by a monthly contribution to their budget.
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I recently discussed this issue on my blog at: http://tawodi.org/2008/04/22/would-you-support-someone-who-wont-support-themselves/
I think it really depends on the situation. If the person is not doing anything to help their financial downfall, then I do not think it is the reader’s responsibility to help. They have to want to help themselves first.
However if the person is just having a run of bad luck, but still trying really hard to make ends meet, then I see that as an exception.
I support my father who is on disability, but he is your typical blue-collared American farmer who worked hard all his life only to end up with nothing. So of course I will support him. But any other family member who just wasn’t intelligent with their money and continually ended up with problems, I wouldn’t gift them any money.
On the same note I think it’s important to stress that when helping out friends and family it is better to call them gifts instead of loans. When you loan money to people and expect to get it back, you open yourself up to a lot of heartache and stress if they can’t pay. It could be a strain on the relationship.
If they decide to pay you back, then that is a good thing, but there’s no need to place stress on them and yourself by requiring it to be a loan.
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Your Parents seperation seemed to start the negative cash flow & that is something you are not responsible for. They could be in a non positive position for a decade or beyond. With a younger sister at home, a sitpend to be sure she’s eating & healthy makes sense. People can and do eat on a dollar a day, therefore a monthly amount sent at the same time every month (auto payment perhaps) would be the only regular check sent their direction from your description. You may want to mark it for support for little sis still at home & once she’s out, stop. You are VERY Fortunate to be in the position to make the move. Go gal, Go & retain the happy times & don’t let the others pull you down. Take Care!!
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Your best bet is sitting down and talking through it with your Mom. If she expect or needs money from you to make ends meet then you should participate in the financial decisions. Sit down and make a plan you can both agree on. Just remember to be sensitive to your Mom and realize there is a lot of concerns that probably play into the problem that you don’t realize.
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To those who say, “This is between Mom and Dad.” It’s clear you’ve never been the child of parents in a nasty divorce. It SHOULD be between Mom and Dad to figure this out, but in reality, Mom and Dad will find a way to drag the kids into it. Heck, my parents have been divorced for 10 years and they STILL bring us kids into things like this. Just because you have kids, doesn’t mean you’re a grown-up.
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I say family comes first. Especially since, from what I can gather, most of this is not her fault, and she seems to be trying the best she can. Does Mom’s debt come from poor choices or just doing whatever she can to get by.
Don’t just give her money, help her dig out. It will help everyone involved. Save enough money so you don’t end up in her position, but especially with a child at home, I think they come before a Roth IRA.
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My wife and I went through something like this when we were dating. Her parents went through a protracted on and off separation for a few years and finally divorced. The mother started depending on my wife (who had an apartment a few miles away) for much of the “secondary” parent role since she had the other kids all the time. Every night (no exaggeration since to prove the point to my wife I kept track for a month one time) her mother would call her and ask for something. A trip to the store for groceries, dropping a younger brother off at work, come over and help fix something, etc..
The mother also struggled finacially through all of this, occasionally needing some help, which my wife provided as she could.
I told my wife that she needed to start backing off on the amount of help, because once we were married, jobs were scarce and we’d likely end up out of state. She didn’t do much, the ties were too tight and she couldn’t say no and her mother couldn’t stop asking.
To make a long story short, we moved a couple of states away the day after the wedding (I’d already gotten a job and had an apartment there).
Her mother survived. Her siblings survived. It wasn’t easy. Lots of calls and lots of tears and lots of “I know we needed to leave but I wish we never had” kind of discussions.
Do what you can, but don’t stop yourself from moving forward either. I can’t speak for others, but in our case I feel it was the best thing we could have done for both my wife and my mother-in-law.
Best of luck.
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My initial reaction would be stop lending money to family members. If you want to help – give the money away, but do not expect anything in return. Owing money to relatives changes relationships and is not particularly healthy.
Having said that, I have faced a situation similar to Rachel’s. It is a tough spot to be in, especially at a young age. Normally, I would vote for tough love and cut off the parents from additional financial support, but since Rachel’s sister still is dependent on her parents for basic necessities, and her mother has seemingly inherited a bad situation from divorce, it seems a little heartless to let them get kicked out of house and home.
If I were in Rachel’s shoes I would try to gently introduce books such as The Total Money Makeover into both her parent’s lives so they can beging to get a better understanding of handling finances from a source other than one of their children (Dave Ramsey is right – parents don’t want advice from their kids!). The father should really seek 12-step help for his addiction because he is effectively gambling with his daughter’s child support money. I would offer to provide food, pay utilities, etc. and help the mother and younger sister with expenses associated with school, clothes, etc, but I would not continue to blindly give money as long as her father is frittering their support money away on gambling.
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Mom needs a plan. Through no fault of her own, she is a painful situation and you can help more by assisting her to find the right help in making new arrangements than by what can only be very stop-gap financial aid.
Mom needs to file for bankruptcy immediately. This will erase most debt.
She needs to apply for food stamps and Medicare for insurance if she and her daughter have none. ASAP
She needs to get back with a lawyer and have Dad’s income or a percentage of it paid directly to her if she can.
She also needs investigate filing an appeal with the IRS…attachment of money was never intended to starve minor children…I think she can win this.
Family does come first but you don’t make enough to support two additional people. You should sit down with Mom with a debt counselor (there are many free services) to help her focus on the steps she needs to get back on track.
After this, the small amounts you can send them will be more effective than just throwing all your money down a rabbit hole. e.g a few dollars here and there to supply your sister with a needed item…calculator, school supplies..winter coat.
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At 20 I commend you for your work ethic and savings but think you’re a bit too young and new to ‘financial independance’ to cast off your mother who took care of you all this time.
Give what you can while you can to help out. You have plenty of time to save. Starting at 23 would put you WELL ahead of the curve.
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I say move and don’t send money. Instead, if possible, maybe send gift cards to grocery stores in their area – that way you know the money is not being spent on things they don’t need (because you always need to eat).
I also think it would be okay to set up a savings account that you put money in for your sister, that you can give to her at 18 or something – maybe she decides to go to college, maybe she needs to move out of your mom’s house as well, etc. Only do something like that after you’ve gotten yourself settled though.
The more money you give to your parents, the more debt you will be in yourself. I’ve seen it happen to someone close to me. Thankfully, my parents haven’t had to ask me for money. (They know I don’t have any anyways!)
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I agree with Seth. Are we really so ungrateful to our parents? She’s not giving money to the father, who has an addiction problem, she’s giving money to her mother who is struggling to care for a little girl who has no means of supporting herself.
Why don’t we all just insist the 14 year old drop out of school and get a full time job so that she can support herself and let the mom rot in hell for all we care?
You people must have had awful mothers. I don’t know how anyone who had a good mother can say some of these things.
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As Ramsey would likely advise, set a budget for the help you CAN offer. And a reasonable time limit.
While you are living with your Mom you should have been shouldering some of the expense under the heading of ‘room & board’. I know that ‘should’ can be a dirty word. But, write off the ‘loan’ to Mom and let her know that you’ve done so. Set up a checking account that she can draw on and make regular deposits to it so she doesn’t have to beg you for assistance.
Your plans are important. So were hers. Let her know that she didn’t give up a career as a musician / dancer / architect / whatever in order to have kids in vain. Also let her know that she didn’t raise an idiot about money.
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This is a tough one but I think I have to agree with Mr. Ramsey. Your mom is in trouble, and she’s going to keep being in trouble until she changes the habits that got her in this hole. You might be able to help her temporarily by lending her some cash, but I think you could help her more by sitting her down, letting her know that you love her and see that she’s in trouble, and doing your best to tell her how she can change. What an odd thing to have to do with your own mom!
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Well, I’m familiar with this kind of situation. My mom refuses to work, my dad has had a history of mental disability, my step dad would rather hang with his friends then work. Not a thought given to what’s next.
Basically, the roles are reversed. You are the adult, your parents are the children. Since this is the roles they chose, they should be treated as such.
Your mom chooses to have an unlucrative unsuccessful business, instead of a steady job. That’s her choise. She can get another job or a second job. If your mom cannot afford the rent for her current place she should move to somewhere smaller, sounds like one bedroom has been freed up.
Your dad chooses to work irregular contract work. He could work a regular salary or a second job, but he doesn’t. Your dad chooses to gamble away his savings instead of investing it.
You choose to work three jobs. Are your parents showing the same effort? If the situation is anything like mine, the answer is a very loud NO!
Responsible parents do not reward irresponsible children. You shouldn’t reward your two children.
I understand this is hard, but this is a lesson they must learn. What will happen if you keep bailing them out when they choose the easy path? Are their retirement plans to continue to mooch off of you, derailing yours?
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I am in the middle of a very similar situation myself. My mom is over 60, single and works in a physically demanding job that is endangered by her not-so-great health. She has no savings, no retirement plan, no insurance of her own. I have been lending her money over the last five years for various reasons and in various amounts. I am an only child, as is she. We’re all we’ve got. She hates asking for help, and while I don’t like giving money away, I don’t want to see her on the street either.
I’ve set aside a certain amount each month that I can afford to give her, money I don’t expect to get back, and I don’t advertise the dollar amount. I don’t give it automatically, she has to call and ask for it. I have frank conversations with her about her plans, and I provide information to community programs she can access herself.
So far so good… the only thing I worry about is getting snide remarks if I buy a piece of furniture, or take a trip somewhere. The tradition of the guilt trip runs deep in our family, and I am working hard to buck that trend.
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