Reader Stories: Breaking the boom-and-bust cycle
Published on - December 2nd, 2012 (by Ellen Cannon) This post is by Jezna. This story is part of our Reader Stories series. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks with all levels of financial maturity and income. Want submit your own reader story? Here’s how.
I never would have thought how much growing up is done in your 20s. Like many, I went to college at 19, but only now, at 26, do I feel myself breaking free from my parents’ money-mentality. And actually, it’s incredibly scary.
My parents never taught me anything constructive about money or budgeting – just that we had no money and couldn’t afford life. We were always just one car breakdown, illness, or emergency from disaster. Even today, I get anxious buying clothes because I always picture my mom’s stressed-out face, and I feel the urge to put half the clothes back. I could always tell she was calculating how much money was in the bank. Often, half the clothes were put back and the other half was put on layaway.
Looking back, my parents were fantastic at penny-pinching. When we had no money, we were able to do without in order to save a little bit. We ate cheap meals and dressed modestly. However, as soon as things got comfortable, as soon as we had a little bit of money left over, they would spend it. We’d order pizza, go to the movies, get a dog, celebrate Christmas, etc. As expected, another emergency would crop up, and we would be back to cheap food, not answering the phone because of creditors and being afraid to ask for anything new.
I went to college from 2004-2008. Neither of my parents went to college, so it was a huge deal for my family. Loans were really easy to get and didn’t require a cosigner (not that my parents cosigning would have lowered the rate). Since the loans were so easy to get and felt like free money, I didn’t do enough research on them. I took out loans for more money than I needed to finance my life. I went to a pretty good state school and lived like a college student, but I still managed to get $40,000 in student loans and $3,000 on credit.
This isn’t a story about how I got out of debt. I’m not out of debt. I’m still figuring things out. I did start dating someone who loathes debt. She was stunned that, two years out of school, I hadn’t managed to pay off my credit card. I would get the card down to $1,000, and then I’d decide that I really needed something – a computer, a new bed, clothes, etc. I was doing exactly what my parents did. When that number got comfortable enough to not cause me anxiety, I would spend more money. My significant other kept telling me that it was laziness that I hadn’t paid it off. I gave her every excuse.
“I’m trying!”
“I’m working on it!”
“Look at all the progress I made without you!”
“You don’t understand what the emergency cycle is like!”
I didn’t understand at the time that she was right.
She refused to date someone with credit card debt and she asked for me to try it her way for a few months. We went on a money diet. At the beginning of the month, I would take out a set amount of cash. I would pay the bills and then everything else, including groceries, would be paid in cash. Everything left over went to my debt. The credit card was paid off in three months . She was right. We celebrated with store-brand ice cream that we bought with coupons.
The most exciting and downright terrifying realization was that the boom-and-bust cycle is over. I now have an emergency fund, but I still keep waiting for the other shoe to drop. I keep expecting that something huge is going to go wrong and take all of my hard-fought money independence with it. Part of me feels a bit panicked about having money and would like to get rid of it so that I’m not responsible for it anymore. I don’t know what I should be doing with it. My parents never had any money! Sites like Get Rich Slowly have been a godsend, because at least there is information out there somewhere reassuring me that someone, somewhere, has been through this.
Lastly, the scariest and hardest part of growing up and breaking free is that I still have to witness the financial struggles of my family. My mom is now making a lot of money, but the house is still being foreclosed on. My sister is making as much as I do, but only has $100 in the bank. If I say anything, I get called an elitist, or a know-it-all who thinks she’s smarter than everyone else.
My approach has been to omit all money-related talk, but I’m struggling to divorce my feelings from their situation. I still associate some strong feelings with the boom- and-bust cycle. And subconsciously, I believe that they’re still the victims in this world – that life handed them a raw deal.
While that may be partially true, I know they’re also responsible for their own mess. I feel guilty that I’m putting money away in my IRA when my family is still struggling. I’m expecting that when I switch jobs that they’ll figure out that I have money and either resent me behind my back or ask for some help.
How do you deal with irresponsible family members? Do you help in emergencies? What do you do when the guilt is just too much? Do you run away from the conversation, knowing that not helping might breed resentment (even though you know that you lived cheaply and worked hard for everything you have)?
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Hi i am 46 yrs old and lived my life just like your parents until my mum died last year and she was pennyless.Its never to late to change and thats what i am doing right now but i have the same feelings as you,its good to know im not on my own, good luck i know we can both make it lol.
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Congratulations on setting yourself on the path to financial security. It’s really hard to overcome mental habits that have been ingrained since childhood, but it sounds like you have a great partner to help you stay motivated.
I have several friends who have gone through similar things with irresponsible family members and it’s caused nothing but heartache and struggle for them as they learn to establish reasonable boundaries. Based on what I’ve seen with those friends, I recommend visualizing those scenarios ahead of time and working through how you would handle them so when it does come–and it will, repeatedly–you won’t be caught emotionally off guard and will have an answer ready. If you find it really difficult, see a counselor who can help you resolve the emotional churn.
I also would say don’t bother with loans or making them promise to change their ways. There will always be an excuse (valid or not) why things won’t change. If you must give money, make it contingent on already changed behavior, like “If you get your credit card down to $500 I’ll pay it off when you cancel it in front of me.”
Good luck and keep surrounding yourself with others who share the same financial outlook that you do. You’ll be able to keep your strong perspective that way.
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Congratulations on figuring this all out at such a young age and making responsible choices! I was in my 30s before I learned there was a different way to be with money from the way I’d always seen (and I’m in my 40s now and still struggle with overcoming my ingrained ideas from my family and cultural norms). If you feel responsible for taking care of family members’ decisions, I recommend checking out some self-help or 12 step groups — I’ve never been to Debtors Anonymous, but I do participate in another 12-step group,Al-Anon, and it has helped me tremendously in learning to identify what is my responsibility and how to detach from other people’s problems — with love and without guilt. Keep up the good work!
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Well done. You should be proud of yourself for the maturity and confidence you are gaining as you become financially stronger. Helping friends and family is a tough one because they often feel entitled to your help and cannot see how much of their money failings is their own fault. I’ve had to tell my own sibling, “I am so sorry, I really am but all that money you keep thinking I can give you is in a retirement account and I can’t just go and get it out of the ATM.” I rarely talk about things like getting new tires or repairing things in the home because he is actually bold enough to ask how I paid for it and I don’t feel like I owe him an explanatin. In my case, I know, my sibling can lie through his teeth to guilt someone into getting his way and as long as he drinks up his paycheck, I just don’t feel guilty saying no. Every situation is different so I’m wishing you lots of luck as you sort it out. Again, congratulations on getting ahead. financially.
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This is something I still struggle with many years later. I’m the only child out of four that has (mostly) escaped this cycle. Our parents are gone now, but I’m concerned about my siblings as we grow older. I’ve been mostly successful over the years with training my relatives not to ask me for money. I never lend money to family or cosign loans, because that’s just a road to broken relationships, but if it’s an extreme need (e.g.,emergency medical care) I gift them an amount that I can afford.
You can only change yourself. Continue to work on changing your ingrained mindset and be thankful for having a supportive partner.
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Great story!
I wish I had advice for you for your family. We have relatives in that situation and I think part of the reason they can’t get out of it is because they feel guilty not giving to their relatives (in-laws for us) when times are good for them.
It’s really important to put on your safety mask first and to take care of yourself. And, as you’ve noticed, just giving money doesn’t seem to do much good anyway. (We sent them Dave Ramsey and it didn’t get read, but it did stop the complaining for a while. I do think the class would really help them, but there isn’t one in their town.)
One thing that we’re doing is contributing directly to the children’s college education. We can do that because we took care of ourselves. (And it helps that we now live in a different state so we’re not the first people they ask.)
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Congrats on breaking the cycle!!!! I understand how you feel about your family. My mom has chosen to quit her job and be a stay at home wife. Although they struggle, I have to remind myself that they are making their choices. I have been asked for money and said no. It was a hard thing to do and I had to remind myself that they have chosen to live the way that they do.
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I respect they way you’ve changed and grown.
In effect, you’ve broken your family’s rules (some of the most powerful rules are the unspoken ones). Interesting timing: I just posted this morning on ‘how to break the rules at christmas’. Of course, some folks never find themselves in the position of needing to break rules. But that would not be me, or Jezna
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What a great story! Thank you for your perspective.
It’s frustrating when you have been in a bad place and broken free of your own mind to get to a better one, and the people still back in the bad place repeat to you all the things you thought then but know aren’t true now! After you argue for a while, I think it’s time for another tactic – living by example.
If your family asks for help, do the same thing your girlfriend did for you – walk alongside them as they try to live differently. This is the “teach a man to fish” argument. And speak with humility! If they think you’re acting like a know-it-all (I get this all the time from my family too), give credit to other sources for your insight like the blogs you read.
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Emergencies will continue to happen, and your budget will by necessity fluctuate, because life has a large random component, but when you have savings the baseline is your positive balance, not zero or (worse) something in the negative, which forces you to go into debt.
Emergencies do not magically go away when you save, as some *cough* people *cough* claim– they are simply cushioned by savings.
Congrats on resetting your thermostat.
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You’re right, El Nerdo – but they do feel less dire if you have the money and don’t need to finance the emergency at rates approaching usury limits. =)
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El Nerdo, true! Emergencies never go away…
But, buying 2 new tires so your car can pass inspection is only an emergency if you don’t have any cash…
If you have cash, it’s no big deal, and you go buy tires…
So, having your cash CAN and WILL change your perspective about what counts as an emergency.
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Every family is different, so every scenario will be different but I think Karen’s advice in post #1 is great. Visualize how you will deal with the problem before it is a problem. If saying No is hard for you, practice it.
At the height of the recession we had a sibling ask for money and we had to say no. She was on welfare and my husband and I had to work two jobs each to help us get through an income loss of 60%. She felt because we had jobs we owed it to her. Then she had the nerve to stop talking to us because we couldn’t give her what she wanted. I can’t feel guilty about trying to keep our financial ship right….you shouldn’t either.
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“I can’t feel guilty about trying to keep our financial ship right….you shouldn’t either.”
I don’t often say this, but this should be embroidered on pillows and made into bumper stickers and magnets!
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This is something I can really relate to. My family would go through the same phases of boom and bust. After leaving home I soon realized that I have had the same habits ingrained into me.
For awhile those habits worked for me, a times I would have only a few bucks in my account shortly before payday. Not to long ago it finally caught up to me and since than my habits have changed. I have been saving more in case of an emergency and now I am not living paycheck to paycheck.
It is something I had to learn on my own but it was well worth it.
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Once, very early in our marriage my husband and I asked his dad for a $500 financial bail out. His dad said no. And while we were mad at the time, we have come to understand why he said no, and that it helped us learn how to manage our own finances. In light of that, I’d suggest that you do not give money to your family. If they ask for money, give them a copy of Dave Ramesy’s book, or something similar, and tell them you’d be willing to teach them what you’ve learned to help them out.
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Thanks for this story. It really illustrates the power of our financial upbringing and how difficult it is to break ingrained habits. Your parents are not victims, they have ridden the financial roller coaster of their own free wills. They never learned the lesson of saving for a rainy day when that lesson was clearly demonstrated to them over and over. Yes, everyone else was doing the same and I know, I did this too. But that doesn’t eliminate one’s responsibility for decisions about how family finances are handled. But I finally did learn the lesson and it sounds like you did too by allowing yourself to be in a relationship that doesn’t enable the bad impulses that still lurk inside you. Good for you! Keep up the good work, and like another poster said, if there is a Debtors’ Anonymous near you, perhaps it would be helpful to see what it’s about.
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Good work.
You can’t change the choices and habits of others; all you can do is not enable them by giving them money. This will force them to change (or not) sooner than they otherwise would.
I have in-laws in their 80s who continue to refuse to do anything differently despite decades of non-stop financial emergencies. I’m sympathetic to the stress their choices cause them but “helping them out” isn’t helpful–it just prolongs the problem and damages what is left of our relationship.
Good luck sticking with your new path–it is very worthwhile.
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I found your story very interesting because I come from a similar background. My parents had 5 kids starting in their early 20s, and only my father was working, as a teacher (which pays badly in France). We never had money, and I grew up worrying about it, watching my friends always have more things than me. For instance it would have never crossed my mind to ask for $10 to go to the cinema with my friends.
As I grew older I realised that my parents have always been financially irresponsible. We moved house many times without being able to afford it. My parents never saved or invested money when they inherited it from relatives. For years, I watched my family be financially insecure and anxious, and that gave me the motivation to not repeat their mistakes. I wanted a different life for myself. Get Rich Slowly has been a huge inspiration on how to be financially responsible: starting an emergency fund, setting financial goals, spending money mostly on things you do actually need, etc. No one in my family really does this. Some feel that it’s impossible for them to save, others just don’t have information at hand. My parents do feel like victims, but they’re mostly not taking responsibility for their spending. I don’t feel like it’s my place to educate them (I’m 23) so we mostly don’t talk about money. I don’t know what I would do if they started asking me for financial help. If I was in a position to help, I probably would, especially in their old age. With my siblings, about half of us are careful with our spending, the others not really. I’d feel much more comfortable talking to them about budgeting than my parents, as we’re going through similar things in life.
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I think it’s fantastic that you’ve got an emergency fund and are making great moves forward. Congrats!
My thoughts are: I don’t think it’s laziness that you never paid your credit cards all the way down. I think there’s a real FEAR, especially when you’ve grown up poor or financially struggling, of having no debt at all. It doesn’t feel normal, it doesn’t feel comfortable. It takes a while to adjust to having money. It takes an adjustment to living debt-free. I like the feedback you’ve gotten here, it helps to have a lot of support in making these changes.
I don’t lend money anymore. Big step. I’m not well-off, and am still working hard to rebuild after a financial downturn over a year ago. But I’m doing better than some of my family and friends, and I’ve learned a few things. I never discuss how much money I have, or how much I save. If I save $200 one month, to someone else, it seems like I’m rich. We all know here that I’m not. We’re pretty savvy about how much is needed in an emergency fund and retirement.
Also, I share some of my struggles with them, so they’ll understand why I’m not able to lend. I can’t emphasize that enough.
And it seems like a contradiction, but if someone in the family is really strapped, I will GIVE them what I can ONLY if I can give it and still meet my budget for the month. I never give money out of retirement or savings.
And I always let them know I’m able to give it by postponing some other expense, because I love them and hope they’ll be ok. My family really appreciates it and we’ve gotten to the place where they rarely ask, because they know I might have to say no. It works.
And the last thing is, I try not to give them advice. It would piss them off royally, because they feel like they’re doing their best. No one likes people thinking they don’t handle money well, even if they don’t. They have to find out on their own.
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Being Generation X (Feb 70) we were by the most part raised by Greatest Gen grandparents and pre Boomer parents. Most of my friends and I know where a Dollar comes from and how to earn and keep it. Sometimes tho’ a well meaning grandparent or other can ruin a person by giving in to every whim. I’ve seen it happen time and again, then someone terrible with money marries someone with EVEN LESS comprehension of how money works,its like the worlds biggest train wreck. The sad thing is the older I get the more train wrecks I come upon. No wonder the U.S. is 16 Trillion in debt. This is our National financial upbringing and it will take one Hell of a Dave Ramsey Program to get it turned around.
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I think this is more complex than a generational issue. Many articles cite that the baby boomers are not ready for retirement. And the pensions that the Greatest Generation had are a thing of the past. And how many of the greatest generation were not financially ready for a 30 plus year retirement. I have no memory of my grandparents working, and 2 of 4 are still alive and well.
The greatest generation and older baby boomers did not see an explosion of credit card debt until the 70′s, which was in a way, a financial protection.
Student Loans and tuition did not explode until the 90′s.
Yes, many generations have spoiled their children, and I know people of my age (I’m 33) who have parents who pay for cell phone bills and car insurance. Tsk tsk. The Millionaire Next Door books discuss emphatically about how subsidizing your children ruins their ability to accumulate wealth.
I just don’t think it is as cut and dry as blaming this on a generation or two.
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It’s great to read your story and how you’ve turned things around for yourself. My sister (one year younger) and I have chosen very different ways of life as well. I pushed through university as first one ever in my family, living on bare minimum with my boyfriend and worked hard to pay for any extras during that time. I got a government loan to finance my studies, half of which needs to be re-paid. I listened to my mom’s only ever financial advice and saved that share even though it meant living on 300 Euros a month which is considered impossible even where I come from. I then left Germany to work in Asia when I couldn’t find a job upon graduating (nobody in my family lives abroad) and have been saving most of my salary to send home since. I recently got a letter from the German government asking for the government loan share and was able to pay it in one go which felt great! I am happy with my life and how things turned out; I would do it the same way over again if I were to choose. My sister left high school to never complete anything she started thereafter and has been living on welfare, passing the blame bucket to either the government or our family. She foremost blames me for her misery, saying I got the easy way and thus demotivating her. I have given up telling her that one *can* achieve seemingly impossible tasks and money management is one of them, if one really wants to. I am very worried for her retirement in the long run as she and her long-term unemployed husband are very much in debt due to consumer credits but I feel it’s wrong to pay for things as it wouldn’t actually help her.
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My parents lived through the Depression and were very frugal with money. I was careful with money while at home. Then, I got married. My husband has never been especially good with money. I took a Dave Ramsey class in my early 50′s and was able to get back on a better path.
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My mom is part of the boom and bust cycle as well. She has gotten better and has savings now (and does save for retirement), but has not fully changed. She wants to retire yet won’t save more than her 401k max (thanks Gods it is increasing this year), and I expect her to call on me when she no longer can work. But I look around and she spends more than a grand on “fun” per month, and my husband and I get by on two grand total and I refuse to help someone who set themselves up for their problem. I tried to help, like you did, with helping plan a way for her to retire. She lasted two months. Sometimes you just have to walk away. Be strong.
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I am really touched by your story. What a great girl-friend, and how impressive that you really changed your behaviour. But what touched me even more is the ‘fear of money’ you mentioned. I had exactly the same when I realised that my debts where payed of and that my next wages were totally mine. I was so afraid that I payed rent ahead for 4 months just to give e some time to decide what I wanted to do with it. And to avoid spending it on silly things like a stereo.
And than you mention the family-problem! The family of my wife consists mainly of people spending all their money. And there are several family-members who try to borrow wherever the can from who ever is available. If they suddenly are very friendly to me, I know that they need money. To be honest, we have stopped giving and lending money totally. And by living in a small house, it is not obvious that we are well of which avoids a lot of discussions. And we find that nobody is really interested in boring advice like: spend less than you earn. So we don’t give it anymore. And help only people who have fallen o hard-times due to outside causes.
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Paid, Paid, PAID!
This is a PF blog for crying out loud!!!
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I’m sorry…don’t really understand your reply to Jerome?
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She’s complaining that he spelled “payed” instead of “paid.”
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Wouldn’t it be paid off, anyway?
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SHE WAS TRYING TO CORRECT “PAYED”….
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Great observation, Val!
It’s easy to understand “of” was hopefully just a typo for “off”, but “payed” for “paid” is more egregious. Since this is a PF Blog, where we come to learn about all things financial, I chose to ignore the typo and focus on the learning opportunity. Not a “complaint”, more of a point, actually, but thanks for your input, SK.
Now don’t get me started on their vs. there…
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Commas belong inside of quotation marks.
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Comma and period inside the quotation marks business is strictly American usage. The British don’t do it that way.
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Someone just told a personal story and you responded by berating them for a misspelled word. How rude.
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I agree. Not everyone appreciates the spelling and grammar police. (OK, I really don’t know anyone who does, except other s/g police…) Typically, you don’t see that sort of petty nit-pickiness happening on the GRS community boards, so it is somewhat of a shock when it does happen.
Back to the OP…
You mention living in a smaller house so it is “not obvious” that you have money. I don’t know if you’ve ever read “Millionaire Next Door,” but many, many people with high net worth live extremely modestly. According to the book, one’s choice of dwelling is probably the single most important factor as to whether or not people have a high net worth. (Expensive home = expensive property taxes & insurance, expensive furnishings, car, utility bills, etc…) I once read somewhere that Warren Buffett still lives in the same “starter home” that he and his wife bought when they were first married.
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There are quite a few participants here whose first language is not English, and I very much like reading their comments in spite of their imperfect spelling and/or grammar. Don’t know if that’s the case for you, Jerome, but whether it is or not, as long as I can understand what you’re trying to say, you can spell your entire comment phonetically for all I care.
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Excellent job, Jezna! As for your kin… Horse meet Water. Save your energy. I speak from experience.
It’s astonishing how people with almost our exact same chemical make-up can be so clueless. It’s like they are walking around a room full of jars of gasoline, waving a lit cigarette. We keep saying “Hey, that’s not a good idea. You shouldn’t do that.” And they say, “You mean THIS?” as they tug back on the cigarette right next to an open jar.
What makes situations like ours even more difficult is that their lack of planning means they will probably look to us planners to bail them out in an emergency.
Try not to think about it. If you figure out how to accomplish that – let me know!
Chip
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If your family ever looks towards you to bail them out: do so in the same way your girlfriend helped you.
It is the only way they will ever learn. You did…
For the rest: my advice is to let it go. Don’t think too much about how they (miss)manage their money. They think nothing of your money management, I assure you.
Better wait until they come crying for help. And when that happens… like I said, help them the way your gf helped you!! If they are really in a pickle, they’ll listen.
Good luck!
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Good story! My parents are frugal people, but somehow they ingrained an “entitlement mentality” in my mind. They wanted to be able to buy things for us kids, that they couldn’t afford in their childhood. While this makes them happy, it wasn’t really helping me with achieving financial responsibility. I’ve eventually learned my lessons from the way other people dealt with money and from great finance blogs like GRS. You should probably point your family in the right direction and then it’s really up to them whether to take that road of financial security.
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Jenza –
I think we grew up in similar households, and my parents still struggle very heavily with their finances. I think every time my father would get a bonus check at work we would end up with a new tv or something else random that was definitely not a “need”.
Luckily I’ve broken free of the cycle, and although I was working on developing good habits even before Mr PoP and I got together, I learned a lot about what a healthy relationship with money looks like from his family. I’m glad that your girlfriend has been a positive influence on your relationship with money, and that you’re moving in the right direction.
Best of luck with everything – 26 was a pretty awesome year for me (first house, marriage, kitten!), so I’ll be hoping it ends up that way for you, too!
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I like your description of the boom-and-bust cycle. We’ve gotten a lot of the way out of debt, but every time an unusual expense crops up, we’re raiding our emergency fund, and then it doesn’t get paid all the way back before the next expense comes up.
One of my favorite advice book writers, Harriet Lerner, suggests that we can connect with other people by asking them to share their competence; maybe after deflecting questions about your income, you could tell them that you are anxious about money too, and ask them what strategies have worked for them to pinch pennies. Everybody loves to share those.
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Congratulations on making progress. I think you will find that you’re less stressed and more self confidence now that you’ve taken control of the process and are paying off your debt.
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I can relate to your situation but I want to say that I think you are very smart to be addressing your relationship with money NOW as opposed to 20 years from now. Yes, it does take discipline to leave money in savings but, IMO, that’s far better than spending everything you have and more. Your family situation sounds a lot like my own situation and it was indeed a very stressful, wasteful and pointless time. Years went by before I finally hit the bottom and began to change my relationship with money. Good luck to you. You are definitely headed in the right direction.
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Having an emergency fund is insurance for those unexpected expenses. Anyone can do this. Living paycheck to paycheck leads to making poor decisions if you aren’t prepared properly.
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Hm, did I black out and write this? Our histories are very very similar. I was in college a year before you, graduated with similar debt, met a significant other who inspired me to get rid of my credit card debt, and have a family background of really poor financial decisions.
It will always be difficult to say no to family, but you have to remember why you are saving, your financial goals and obligations. I have a monthly fun money or personal allowance set up in my budget, and if one of my parents asked me for money greater than that sum, it’s a non-starter. I just say I don’t have that kind of money set aside from them. It is the truth, because the money I do have set aside is for loan repayment, or home and car maintenance, or my own money emergencies.
Maybe someday you’ll get to the point where you can comfortably set aside a bail-out fund for close family members, but if you have any debts, you shouldn’t feel obligated to bail out others.
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Thank you for sharing your story. I feel compelled to comment because I can very much relate to your feelings of guilt regarding your family.
I too have “broken the cycle” and am watching my parents struggle. I even feel guilty that I helped them spend their moeny while growing up but am now frugal with my own.
But there are some things you can do:
1. Model frugal behavior with your head held high. My parents are well aware that we could drive a newer car, live in a bigger house, etc. And they marvel at how happy we are right now. I’ve seen them putting two and two together and it’s pretty amazing.
2. Emphasize the truly important things in life, like spending time with family. When your parents or siblings want to go all out for Christmas, suggest doing secret santa instead and offer to play a game as a family. Reinforcing how unimportant stuff is can help.
3. Be ready to talk when they ask about your lifestyle. When you switch jobs, or an emergency comes up and you can deal with it, your family may ask you how. Be ready to talk gently about it, or (my favorite) have a PF book ready to hand to them. I find that having family read someone else’s words can have a much greater effect (less preachy).
Lastly, I just wanted to give you a word of encouragement. After living frugally for a few years (and having awkward run ins with family) my parents have started to change – they just sold a new car to buy an old one, they are looking at downsizing, and my sibling is starting to ask me about budgeting.
It may take time – but people do pay attention, and can change! Good luck to you and your family!
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Just in the past 48 hours I have had to help 3 people with real emegencies….and I am going on ramen noodles for the next month.
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My husband is a relatively high earner from a family in which he grew up feeling poor. I am a low earner from a financially comfortable family. When we married, he was in a lot of debt and I wasn’t. While he wasn’t terribly frugal in his own right, a lot of his debt seemed to come from an overdeveloped sense of responsibility to meet every need and desire of those around him– if he hadn’t been supporting so many people (and not just in their basic needs, but many of their wishes, too), he could have supported his lifestyle just fine.
Now I track our finances and our debt is swiftly diminishing. We still give a significant amount, on a regular, monthly basis, to family members in need. However, we have a budget category for that– we’ve analyzed what’s needed and what we can afford, and we stick to that. We think very, very hard before answering any more “emergency” pleas, and we won’t give if we don’t have the spare money in our budget. We don’t give out of our savings/emergency fund. My husband has to struggle hard not to automatically say “yes” to everything, but knowing he’s accountable to me helps.
So I agree with all those who say: if you want to give and help, do so, but only out of what you’ve got to spare. If you don’t have anything to spare, you probably can’t afford to be in the giving role!
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Eve,
Our spouses sound very similar! Like you, Mr. CincyCat and I have found it to be a great model also to put a line item in our budget for helping family members in need (we have quite a few family members who are on disability, or who truly lack the cognitive ability to budget).
Once it’s gone, it’s gone, though. The generous spouse doesn’t feel like they have to be “stingy” and the “bottom-line-watcher” doesn’t feel like the other will suddenly give away the grocery budget.
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You’re right, websites like this one truly are a god send when it comes to free advice on a variety of financial topics. Although we weren’t quite in the same situation, my parents also didn’t teach me much about money and find myself having to figure it out as I go. Its motivating to know you were able to pay off your credit card in 3 months, although I’m sure you lived very strictly.
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We have helped my in-laws before. They seem to be stuck in the boom and bust cycle. Once, we leant them hundreds of dollars for an emergency request to cover food and the mortgage, and then watched them spend about $100 on what I would consider frivolous items a couple of days later. After lending them money, we found ourselves unable to refrain from judging their choices. It is difficult, because we want to make sure they have their needs covered, but they also make good money.
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Jill,
You didn’t ask for my $0.02, but I’m going to give you a little advice.
I would seriously consider just “gifting” the money rather than making it a loan. As you are already experiencing, it just leads to relationship stress, and sometimes destroys the relationship altogether. If you make it a “gift” (at least, in your own mind), then some of the emotion gets taken out of the transaction. Also, it gets rid of the expectation that it will someday be paid back, which in most cases, is honestly never going to happen.
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Oooh I just got chills reading this because it is eerily similar to my life. Are we related?? Seriously, though I’m 25 and in a very similar situation. Right as I was getting my financial house in order, my dad declared bankruptcy. It was the right thing for him to do, but it broke my heart. I immediately wanted to empty my savings account and give him the money. You never want to see your family suffer. Still, my boyfriend talked me down from that ledge by explaining that as long as his views about money don’t change, my “help” will go down the drain just as fast as his money. I ended up giving him my car that I had just paid off because we were thinking of downsizing to one anyway. Still, it built up some resentment that I wish weren’t there. The best thing you can do is offer your help sorting through the mess or suggesting cheaper alternatives (like now I cook dinner for my dad rather than going out). Don’t overextend yourself. You’re not doing them or you any favors.
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This was a great story and really hits home with me. Although it took me longer to reach your point of view (I was in my early 30s). I too grew up with a family that live hand-to-mouth. To this day my parents still live paycheck to paycheck and struggle at least once a year with emergencies. Even worse, not only have I watched my older sister follow in the same path, but my oldest niece too.
My turning point or personal education came from a friend who got me into Amway when I was in my mid 20s. I am not a member / distributor anymore nor do I advocate for them – My experience was the books and tapes they pushed (most were junk, but a few of the personal finance books really started to click with me). My wife and I began to focus on living under our means and at the same time both of our careers took off.
Now we are looked at by both her family and mine as the “Rich” ones in the family that everyone runs to for help. For several years, we willing offered our wallets to those in need only to find that not only did they not change their ways or learn from their mistakes, but we were the ones that were still being talked badly about and the focus of most family gossip. So we sat down one day and made a decision – we could either continue to help everyone and be treated poorly and talked about badly behind our backs OR we could stop helping people that were not willing to do anything for themselves, let alone us and still be talked about behind our backs and treated poorly. We decided the later – since either way resulted in the same behavior from others at least if we stopped helping those who we knew didn’t appreciate it we would have more money for us.
Now we focus on ourselves and our future. We sock away extra money on our house, we paid off our cars and plan to sock away money so the next car I buy I can pay cash for it. We don’t live an extravagant life style, but we do live comfortable and worry free. We have gotten over the guilt and made the decision that we must worry about ourselves first. We do help others in need, but only if they are willing to help themselves first.
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Congrats. It’s always amazed me that people close to you, especially family, are among the first to be willing to tear you down and treat you like dirt if you start to get ahead of them in life. You’d think they would want to learn from you and raise themselves up upon your example but no, it’s as if you are an affront to them for daring to become more than they can manage because of their own fears, their own regrets. I have a high school friend who became a millionaire and all our old friends could do was snipe about him. Then when he lost it all, some were actually glad or felt he “deserved” it for aiming so high. Jokes on them, he recoverd and has been doing great for some years now, yet they still talk about his failure rather than his ability to bounce back. Similarly I saw my brother-in-laws constantly mocking the youngest of them for going to college. Now he’s the only one with retirement savings, a house, a wife, and a steady job. Yet they now give him grief for those things even though they don’t have anything close. Is that crazy or what?
They all think it’s money, but it has less to do with money and all to do with attitude and actions.
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Wow, this was like reading a post about my own family. I really appreciate seeing this post here — it’s hard to describe how having financially irresponsible family members, when you yourself are financially responsible, can make you feel awful, guilty, and proud all at the same time. I’m glad to know there are others out there with similar familial financial problems as mine. Thank you for writing this.
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Great post! I have similar issues with my family as well, especially my sister. I have a financial background and have been working on getting my financial life in order which makes me want to help her all the more. Even though we both grew up in the same household and same education system and the same chances, we lead two totally different lives. I cannot talk about my financial successes and when I try to help her, she won’t take any advice. She lives in that same boom and bust cycle and I wish I knew of a way to get her to let me help her out of it.
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This is my story from your girlfriends side! My husband and I have been married for 19 years now. I had to teach him how to break the cycle. It’s really hard, but you have to keep your finances a secret from your parents and relatives. My family knows but we don’t tell his family. They spend everything they get their hands on including any money we give them. Stay strong and you will be debt free someday. We paid off the house 2 years ago at 45 years old.
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This is one of my favorite (recent) articles. I think it was very honest and well written. Thank you for submitting it!
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