# worried about parents' finances



## joncnca (Jul 12, 2009)

i don't really know what kind of advice can be offered that i haven't already considered and/or tried, maybe i'm just venting.

i love my parents dearly. they are good, honest people, and they have raised me well and given me many advantages in my life. i am immensely grateful for the love and support they've given me, and even though i may have been somewhat naive in my upbringing (about money), i have warm memories that they always put a nice roof over my head and i was well fed. who can ask for more?

unfortunately, as i got along in my 20s (late 20s right now), i became much more financially literate, interested, and disciplined. and i realized that my parents (who are nearing retirement; i'm the younger child), have made some very questionable financial decisions. 

they've had a decent share of good opportunities, some of which were capitalized on. but i think they fell into the stereotypical immigrant plight, in which creditors started offering them money that they weren't able to repay, and they weren't 'educated' enough about money (they're actually PhD-educated in their fields).

i think this must be a common problem for many people, even non-immigrants? there is a shocking dearth of education about financial matters for the uninitiated.

anyway, they're in a house that's way too expensive (and unnecessary), and have consumer debt that makes my heart sink (and i'm a pretty tough guy emotionally). i think people on talk shows have less debt, sometimes.

i've tried to organize their bills, receipts, give them advice on how to save, cutting back, pleaded with them to sell the house, arranged a consolidation service (not a loan) which they were unable to sustain, and i try to monitor things as much as possible. but i'm really busy myself, i have my own matters to attend to, i'm getting married soon, and plus, i don't think they really like having their son babysit their decisions. it's particularly difficult for them (who are otherwise great at most other things they do) to understand that this is a problem.

they're unwilling to make drastic changes. it's not just that they don't know anymore (because i provide a lot of information), it's something that they're unwilling or unable (from lack of discipline?) to do, that is, live sustainably. they need an intervention, headed by someone other than their son, because maybe that's why i haven't been able to get through to them.

anyway, does anyone else find themselves in this kind of situation, or perhaps understands that position that i'm in? i want my parents to live happy, healthy, lower-stress lives. they're both working very hard right now, but i think it's unnecessary, especially since a lot of it is now wasted (e.g. interest). and they shouldn't need so much, neither my sister nor i have needed financial support from them since we were 18 (although we lived at home during university, we had scholarship money and part-time jobs)

sigh. sorry about the long post. wondering if anyone can empathize.


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## the-royal-mail (Dec 11, 2009)

I can empathize but to a far lesser degree. I'm not willing to share too many personal details, but suffice it to say I have a few minor ideas on how they could be better managing things. My mom has this thing with her money being "locked in" for various investments and such and what little I know, suggests to me that this really isn't necessary in most cases. I would love to fix that and offer some suggestions. My mom taught me about managing money at a very young age, but I think I can offer a few suggestions to build on what is already a great "save your money" mindset. That's all.

My advice is not to stress out over this and not to put pressure on them. You sort of have to take a passive approach, toss out some suggestions here and there and see if they take the bait. If not, then leave it be and refocus on your own life. I think your plate is quite full as it is without taking on someone else's problems. There will be plenty of time for that in your life (you said you are getting married) as they get older and start to need more of your help.


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## peterk (May 16, 2010)

I can certainly understand. My dad spent 25 years working for a small private company that paid him far less than he was worth. They haven't struggled to get by, but they have struggled to save much at all. Their house still isn't paid off. Luckily he's recently moved into a government job that pays much better, gives our family heath benefits, and I'm sure there's some sort of decent pension coming his way now when he retires (likely after 65)
Unfortunately my parents are under the impression that "stocks are for people that have money to lose" While this is certainly "right" it's also lost them a lot of growth of what little savings they do have by being only invested in "safe" and "income" mutual funds sold by the bank.

In regards to helping, I took a very passive approach over the holidays. I got out my copy of Wealthy Barber (which I purchased at value village for $2  ) sat around all day reading it, and then just left it out on the coffee table when I was done. Turns out they've both read it in the last couple months. My mother was telling me the other day how to make sure I save 10% of my income if I want to have a nice retirement someday, hopefully she takes her own advice.


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## twowheeled (Jan 15, 2011)

in the same boat here, parents are immigrants who are also very financially illiterate, the only reason they have gotten by is by saving every penny and being frugal. It's fustrating but they will only invest in the safest things like GIC's and govt bonds. They did have some very conservative mutual funds and got scared into selling them for a big loss back in 08. They're also uneducated about the stock market, firm believers that stocks evaporate overnight and you lose everything. What's worse is they refuse to spend any time reading financial books or learning how to invest.. but will spend hours on end checking their grocery receipts to make sure they weren't overcharged 5 cents a lb on cabbage. Or clipping coupons and driving across town to save a buck on soup while burning 10 on gas. 

I figure you can't teach an old dog new tricks, I've not only left the books around the house but also given them several money management books, which only collect dust. Printing online articles, etc, all a waste of my time as they just get stuck in a pile and forgotten. Oh well.


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## ldk (Nov 10, 2009)

Same boat, here, though my parents are not immigrants....rather well-educated and self-employed boomers who figure the party is never going to end. They have always earned a good living and have spent every dime--swimming pool, cruises, winter vacations, etc. and haven't saved a cent for retirement. (no pensions, obviously, being self-employed.) They are now 65 and 67 and still working hard under the delusion that they are going to be able to sell their business 'some day.' (They aren't, but that's a story for another day.)

I struggle with what my responsibility is going to be to them when their health or other circumstances dictate that they are going to have to stop working. With even a modicum of planning they could have been well set-up, but they have refused to discuss the situation. 

I don't think there is an solution to the dilemma, personally, but if anyone else has some advice, I too could use some!!


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## I'm Howard (Oct 13, 2010)

First, why do people tell a complete stranger their most intimate financial details, but won't share them with their Family?

Second, reality is that the money is not really theirs, it is whoever they plan on leaving the money to, they are not losing money, they aren't spending it anyway, the Estate is losing money.

I handle all my Families monies, it occurred only after listening to me for years, losing money thorugh FA's, most of my relatives asked me to look after their money.

It is not easy, you fret, they don't, but at least with my future estate I now have a measure of control.

My Dad is mid 90's, i keep telling my Family Members it is in all our interests to make sure he continues to live because every year the estate will grow.

I regret not having done this sooner, Nortel and a loss of $300,000 would not have happened..

My major hurdle now is that a Trust Company has been hired as an executor and from what I have seen, their major purpose seems to be separating the Heirs from the money by charging as much as possible and dragging out the whole process uneccessarily.


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## Sampson (Apr 3, 2009)

I'm Howard said:


> reality is that the money is not really theirs, it is whoever they plan on leaving the money to


What an interesting perspective.


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## OhGreatGuru (May 24, 2009)

Sampson said:


> What an interesting perspective.


My thoughts exactly.


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## OhGreatGuru (May 24, 2009)

The issue as described is not "financial literacy". These people don't need help in how to invest their money. They are living beyond their means, spending money like the proverbial drunken sailor. There are plenty of people with modest educations who know you shouldn't do that, and can't do it indefinitely. They need a financial reality check, not a financial education. And they aren't likely to start listening to their son now. 

Can you "disinherit" your parents? If the situation is extreme OP may need legal advice to protect himself from his parents' folly. Particulalry if they have an expectatin that OP will take care of them (and their debt) when all their money is gone. But otherwise it's the old "You can lead a horse to water, but you can't make him drink" routine. Distance yourself, don't nag, and don't give them too much sympathy when they complain about their finances.

PS. maybe buy them a book on managing debt/personal finances for their anniversary.


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## Cal (Jun 17, 2009)

It's their life to live.

Ultimately they will change their ways if they want to.


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## Rico (Jan 27, 2011)

The filial support laws may have relevance to this discussion. Apparently, all provinces except Alberta have them.

http://www.vancouversun.com/Family+...kids+support+their+parents/3314923/story.html


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## George (Apr 3, 2009)

OhGreatGuru said:


> Can you "disinherit" your parents? If the situation is extreme OP may need legal advice to protect himself from his parents' folly. Particulalry if they have an expectatin that OP will take care of them (and their debt) when all their money is gone. But otherwise it's the old "You can lead a horse to water, but you can't make him drink" routine. Distance yourself, don't nag, and don't give them too much sympathy when they complain about their finances.


"Disinheriting" the parents isn't really needed. As a rule adult children have no legal obligation to take care of their elderly parents - the technical term for this is "filial responsibility". Some provinces (BC, NS, NB, QC) have laws that raise the possibility, but they are very rarely invoked.

The best option, IMHO, is just to live your life as best as you can and set a good example for your parents. They are grown-ups and responsible for their own decisions and the consequences of those decisions.


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## twowheeled (Jan 15, 2011)

what if parents rack up huge debts and pass away? Who do the collectors go after?


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## OhGreatGuru (May 24, 2009)

As long as you haven't cosigned anything, I think creditors are out of luck. It's more a problem of will you feel morally obligated to support your destitute parents, even if it was their own foolishness that caused it?


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## George (Apr 3, 2009)

twowheeled said:


> what if parents rack up huge debts and pass away? Who do the collectors go after?


Debts *cannot* be "inherited" (although many debt collectors will try to convince grieving family members otherwise).

If the debt was cosigned, then the creditor can go after everybody who cosigned on the loan. If not, they can only target the assets *owned* by the debtor. Often a spouse is an exceptional case because most people have assets jointly owned with their spouse, so the widow/widower can be in the unfortunate position of needing to sell or mortgage the family home to pay the debts of their now-dead spouse.

Put another way: What you *own* when you die has to be used to pay for what you *owe.* Everybody dies leaving at least a few creditors unpaid (i.e. taxes, utility bills, etc), and when you die your assets will be used by your estate to pay any debts owing. If there's money left after the debts are paid, then the beneficiaries will receive an inheritance. If there isn't enough to pay all the creditors, than the remaining creditors are simply out of luck and will have to write off the debt as uncollectible.


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## I'm Howard (Oct 13, 2010)

My Brother in Law died several years ago, last week we got a letter from Revenue Canada adressed to his Estate because they had paid him $61 more in GST rebate than he should have got,he was dead when the cheques was deposited.

I paid the bill, the letter opened a lot of old wounds for my wife.


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## briant (Jun 23, 2009)

I totally understand where your coming from. I'm around the same age, and stage in life. My parents have both made stupid mistakes that I've tried to help them get out of (re: timeshare fiasco)

Generally speaking it's not much use worrying about it. I've become somewhat of an adviser to them, helping them make changes in they way they manage money. I've helped with setting their investment portfolios and budgeting. 

The thing is, there's a lot of people out there that just want to take your money, and older immigrant parents are often susceptible to this. There's a reason for the adage "A fool and his money are soon parted".

Just help them out where ever you can.


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## Plugging Along (Jan 3, 2011)

I don't neccesarily think it's an immigrant/non immigrant issue. As my parents are immigrants and were very wise with their money. I know people who are good with their money and not good, and they are in both.

I find a lot of money issues are really the surface for something bigger. In order to fix or improve or understand what's really going on, you have to dig deeper.

Money for alot of people isn't just a means to buy stuff to survive. For many, it's highly emotional, as it represents something to them. I have talked to many friends and family about money, and it's often started out as not a conversation about money or fianance, but rather of value, wants, needs, life etc. Once, I've been able to get an understanding what is important to them, and where their attitudes and beliefs have come from, then I may bring up how their current spending/finances are impacting the overall picture.


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## joncnca (Jul 12, 2009)

thanks to everyone for replying, i appreciate the kind advice and understanding....not to say that i'm 'glad' that many have you have gone through the same thing....it'd be better if none of us had to worry about this type of thing....you know what i mean =)

it's true, financial literacy is not exactly what they're lacking now. in fact, if i really think about it, my father is actually quite "aware" of how investments work and he often has great ideas, but lacks the commitment/discipline/means to implement these strategies. plus there are other things that're a little more out of his control that make it difficult (because i don't want to make it seem like he's completely to blame). as i keep saying, they're great people with good hearts.

it is frustrating how sometimes family members will divulge information to strangers, but not to their own family. perhaps it is fear of being judged. it's easy to tell a stranger, they will only smile and talk trash behind your back. but as i tell them often, i may be delivering the harshest messages, but no one in the world actually cares about their ultimate outcome as much as i do; i don't care how 'nice' some others may appear.

and yes, i've tried to take a more passive approach to it. i realized that fighting fire with fire, particularly with the maternal unit, only leads to everything being burned down. so i've tried to just make sure all of my own affairs are well taken care of, and i try to drop hints whenever possible. leaving financial management books around hasn't worked. again, not so much a lack of literacy (not completely, anyway). reality check is in order, but i feel like no matter how logical i present my arguments, they can't see past the fact that i'm supposed to be their child...maybe..to be fair, i have seen some minor progress. i guess that's as much as can be hoped for. 

it just really burns my biscuits because they've clearly had, and even now, still have opportunities to turn that ship around...but it's not happening. i just can't be around all the time to police them, and as i mentioned before, the house is totally unnecessary for two people. i think this is a huge problem, and those criminals at the bank should be shot for being so reckless...though i realize that no one has anyone to blame but oneself. the truth of the matter is, while i try really hard not to begrudge them their poor financial decisions because they've been good, kind parents (nothing like the woman in that article), i'm so pissed off that i have to deal with this too, especially since they still have ways of resolving this issue, but they're not capitalizing on them. intellectually, i know that parents are not perfect, they're just doing the best they can. but i feel so dismayed that it could have gotten so bad. and i certainly don't want this to create an undue burden on my future wife and kids, again, especially since it seemed so avoidable. anger plays a part in this mix too, whole big mix of emotions, haha.

i think regardless of legal obligations, i don't think i could live with myself if my parents were truly destitute. i can't bring myself to leave them out on the street, uh...even figuratively. so it's like the feeling of being between a rock and a hard place. that being said, over the past few years i've diligently tried to distance myself from them financially. nothing that i own has any ties to them, and i'm well aware that creditors have no legal right to collect anything from me, though they may try to convince me of an obligation. but i feel guilty for even thinking about this. i really don't want to think so far ahead, because i'd still like my parents to live for a good amount of time and to actually reach a point where they aren't so crushed by this financial burden, and can enjoy themselves more. this whole thing has put a serious strain on our relationship as well, and what bothers me the most, is that it seems all so unnecessary. no one got a terminal illness, no one was in a fatal car accident, it seems like this all could have been avoided.

it's not just an immigrant/non-immigrant issue, of course. and yes, the money issue is usually symptomatic of something deeper. i feel kind of helpless in that respect too because of my position. there's a lot of pride, and a lot of unpleasant history that's probably more of a root cause. and again, i don't think they take me adequately seriously because i'm their child...or maybe as persuasive as i can be otherwise, i'm just not effective with them in particular, perhaps a result of my own failings.

i don't think about it constantly, i try not to, but sometimes it's worse than others. it's not like some casual acquaintance you can just cut out of your life.


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## Karen (Jul 24, 2010)

To begin with, I want to tell you that I am hugely impressed by your insight into both yours and your parents attitudes to this situation, particularly since you are so young. As you suggest, your parents obviously did something right - their parenting skills were considerably superior to their financial abilities!

You mentioned in your original post that you are the younger child - have you discussed your concerns with your older sibling? Does he (or she) share your concerns? If so, but he has not been as closely involved as you have in trying to "reform" your parents, is it possible that they might accept advice from him more easily than from you - simply because he hasn't made them feel backed into a corner? Another possibility is that they might find it harder to accept advice from you if they still think of you as the "baby" of the family. 

Just a couple of thoughts that may well be completely off base.


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## hboy43 (May 10, 2009)

Hi:

Like being an alcoholic, overweight, or whatever, the drive to change ultimately must come from within.

Can't really nag people, otherwise they have their particular problem plus a bad relationship.

hboy43


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## twowheeled (Jan 15, 2011)

George said:


> Debts *cannot* be "inherited" (although many debt collectors will try to convince grieving family members otherwise).
> 
> If the debt was cosigned, then the creditor can go after everybody who cosigned on the loan. If not, they can only target the assets *owned* by the debtor. Often a spouse is an exceptional case because most people have assets jointly owned with their spouse, so the widow/widower can be in the unfortunate position of needing to sell or mortgage the family home to pay the debts of their now-dead spouse.
> 
> Put another way: What you *own* when you die has to be used to pay for what you *owe.* Everybody dies leaving at least a few creditors unpaid (i.e. taxes, utility bills, etc), and when you die your assets will be used by your estate to pay any debts owing. If there's money left after the debts are paid, then the beneficiaries will receive an inheritance. If there isn't enough to pay all the creditors, than the remaining creditors are simply out of luck and will have to write off the debt as uncollectible.



I didn't realize that. It might be a dumb question, but what is the incentive to be fiscally responsible if you don't intend to leave any inheritance? Why not simply spend the latter half of your life racking up huge debts making only the minimum payments with no plans to pay any of it back? Seems like a free pass to me?


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## Square Root (Jan 30, 2010)

twowheeled said:


> I didn't realize that. It might be a dumb question, but what is the incentive to be fiscally responsible if you don't intend to leave any inheritance? Why not simply spend the latter half of your life racking up huge debts making only the minimum payments with no plans to pay any of it back? Seems like a free pass to me?


Why not indeed. Creditors try not to lend to people who fall into this category though. My sister had few monhs where she knew she was dying so ran her credit cards up to the max. The max wasn't very big and she really didn't feel much like having a good time anyway.


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## financialnoob (Feb 26, 2011)

hboy43 said:


> Hi:
> 
> Like being an alcoholic, overweight, or whatever, the drive to change ultimately must come from within.
> 
> ...


I agree about the nagging. It's not going to work. In my experience, it can even exacerbate the problem.

But I do think you should have one big sit-down with them to talk about it. Explain first that you won't nag after the fact, and that you simply want a good opportunity to explain your position to get it off your chest, and then you will leave the matter alone.

You mentioned lots of consumer debt. But what is the root cause for this? I don't mean just what they're buying, but also why they feel the need to continue to buy things they can't afford. Is it a pride issue, to keep up with the neighbours? Making them verbalize this may make them see how silly it is.

And why the big house? Do you have any siblings living with them? Are they retired yet? If not, maybe you can talk to them about it and how they could retire debt-free with some changes in lifestyle, or maybe even retire early.

Alternatively, talk to them about your finances if you're comfortable. You don't have to break down your portfolio or anything. But make up an excuse to share some info with them, like you're saving for a house. You could tell them how it's going well, and you've saved $10K. And next time, talk about how you've done something to save more, say eat in more so you're now up to $13K. And next time your savings are up to $17K. Maybe them seeing the constantly-growing bank account number vs. their dwindling one will be a trigger. 

Ultimately, I think the above will do absolutely nothing in terms of resolving the issue at the time. But it may plant a few seeds that can grow over time.


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## George (Apr 3, 2009)

twowheeled said:


> I didn't realize that. It might be a dumb question, but what is the incentive to be fiscally responsible if you don't intend to leave any inheritance? Why not simply spend the latter half of your life racking up huge debts making only the minimum payments with no plans to pay any of it back? Seems like a free pass to me?


It's a little more complicated than that. Most people's money habits are formed over a span of decades. That means that it is pretty unusual for somebody to completely change their ways later in life. If somebody has always had large debts racked up for their whole life, then they probably wouldn't be financially able to rack up further debts later in life because their credit rating would likely be poor.

If somebody had good financial habits their whole life, they'd likely end up later in life with a large chunk of equity in the form of a paid-off house and significant savings in the bank. They wouldn't have much need to rack up large debts, because they'd have more than enough money from their own resources to pay for anything they might want to do.

On top of that, most people who are able would like to leave some form of inheritance to their children and grandchildren. It's called leaving a legacy - something that you'll be remembered for.

I very specifically remember one term of university being fully paid for via an inheritance from my grandfather. Even though I had only met him once as a young child, it was a way for him to be remembered.


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## twowheeled (Jan 15, 2011)

I see where you're coming from, but leaving I would rather not leave a legacy in the form of an inheritance. In fact, I've told both parents I do not expect nor want a single cent coming my way. They worked for the money, I don't see why anyone else, including me, should expect to enjoy the fruits of their labor.


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## Square Root (Jan 30, 2010)

twowheeled said:


> I see where you're coming from, but leaving I would rather not leave a legacy in the form of an inheritance. In fact, I've told both parents I do not expect nor want a single cent coming my way. They worked for the money, I don't see why anyone else, including me, should expect to enjoy the fruits of their labor.


That's a reasonable request but it's pretty hard to get your finances such that you pass on with exactly zero left. Certainly wouldn't want to run out so a cushion of some sort is required.


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## George (Apr 3, 2009)

Square Root said:


> That's a reasonable request but it's pretty hard to get your finances such that you pass on with exactly zero left. Certainly wouldn't want to run out so a cushion of some sort is required.


If you want to die and not leave an inheritance to your children, you could simply ensure your will states that the residue of your estate is to pass to a charity (or multiple charities). It'd be a very good idea to explain to your children exactly what you're planning to do and why so that they don't expect an inheritance only to find that one isn't coming.


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