Dealing with family members who aren’t as financially savvy or frugal as you are is a common problem. Reader Mike in New Hampshire wrote to tell us his dilemma, and he wants your thoughts on what he should do. Here’s his story:

In college I majored in Communication and Journalism, so when it came time to choose electives to meet the requirements for math and science I had pretty simple goals: Find the easiest possible classes that had nothing to do with Calculus or Anatomy and didn’t start at 8 a.m. My search for simplicity landed me in Meteorology and Consumer Mathematics. One was interesting, but the other class changed my life for the better, while sadly showing me how little my father knew about personal finance.

At this point in my life (I will be 33 in a few months) I am in a very solid position: I have no credit card debt, I am working toward a goal to have a full year of expenses in my emergency fund by the end of 2013, and my retirement is funded appropriately through my 401(k), Roth, etc.). My car is paid off and I pay extra on my mortgage each month in an effort to have it paid off in 15-plus years, hopefully allowing me to retire early at 55.

My father, whom I love dearly and consider a best friend, will be 65 in December. He has taught me so much over the years, but unfortunately personal finance is one area where I learned what not to do from watching him. His financial position is not exactly the same as mine. Despite only having a $400 per month mortgage payment, due to the many times he has refinanced, he has no retirement accounts (he works for a small business that does not offer 401(k) and was not interested when I offered to set up a Roth for him), uses his credit card and home equity line on a regular basis when emergencies come up, and has a car payment on his older-model vehicle because he continues to roll these loans over.

Retirement in doubt

He is at the point in his life where he should be looking forward to the light at the end of the tunnel, but instead he is caught in this difficult place where the decisions of his past are holding him hostage. His original philosophies on retirement and spending were “I will just work until I’m dead” and “If I want it, I’m going to buy it.” The problem is over time he has grown tired of work and, as he sees people around him retiring, regret is starting to take over.

Last year we looked at his balance sheet and I was so proud of him for saving about $20K over the past few years. This was short lived when I looked at the other half of the sheet and realized that he was so stubborn about “not touching his savings” that he had pretty much offset that entire amount via credit card and home equity debts. No matter how many times I explain that he isn’t saving and is actually losing money after the interest rates are taken into consideration he refuses to change.

I realize that my father and I aren’t an apples-to-apples comparison since I do earn more than he does. The great equalizer, though, should be his mortgage payment. At $400 per month it is a small portion of his salary and should give him an incredible advantage when trying to build wealth. At one point in my life my car payment was nearly $150 more than that (yes, I learned my lesson on the new cars but also hope to end up owning my 2006 for many more).

Not all his fault

Not all of his money was spent on toys and gadgets, though. One of the times he refinanced when he and my mother went through a divorce and during this time he also cashed in his life insurance policy to settle things up. He also has some loans that he took out to help me pay for school with the promise that if I did well he would take care of it. Even now, he refuses to let me take them over or even help pay for them.

I have tried to help him every way that I can think of to retire; I even offered to finish my basement for him as an in-law apartment so he could rent out his house and use that as his retirement income. I appreciate everything he has done for me and want nothing more than  to be able to teach him some of the things I have learned and help him enjoy the retirement he deserves. He doesn’t want to be a burden to me. The sad part is I wish he would realize that seeing him unhappy and stressed out at this point in his life is the greatest burden of all.

Are others in this same situation with their parents and/or children? Any tips or suggestions would be welcome on this topic from either perspective.

This article is about Ask the Readers, Credit Cards, Retirement, Savings