Often we hear about boomerang kids, or middle-aged “children” who keep asking their parents to subsidize them. But what happens when Mom and Dad hit you up for a loan?
This complex issue is the topic of my current column at MSN Money. “Are you your parents’ ATM?” addresses when helping is (a) enabling and (b) a real danger to your own finances. Or both. [Edited to add: All my old articles on MSN Money disappeared when the site changed platforms.]
It includes strategies on how to help your parents take a realistic look at their expenses, how to set limits on what you will contribute and even how to say “no.”
I liked the way one expert put it: “Sit down with them and say, ‘Here are your three options. If you choose anything but these three options, our conversation has to be over’.” Now that’s some tough love.
Understand: I’m not saying you shouldn’t ever help your family. My mother is dead, and my father is doing pretty well in retirement, but I do send money to my Aunt Dot every time I get paid. She didn’t ask; in fact, she sometimes frets about me “running short” if I help her. I do it because she needs it, and because I feel better knowing she has a little extra.
Readers: Have your parents asked you for money? Did you ask them to make any changes in their lives (e.g., quit going to the casino so much, stop eating every meal out) or did you just give it? Have there been times when helping them out affected your own finances adversely?
What a timely article! With interest rates for savers at awful rates now for a couple of years some seniors are hard pressed to maintain their lifestyle. I have first hand experience with the scenarios you write about and then some…. it’s not easy. My folks STILL don’t get it. My DF just the other day told me if he could just get refinanced…all would be well. I explained it’s hard to “borrow yourself to prosperity” and the conversation went downhill from there. My thought…I will make sure they have food, their medicine and heat. Other than that ….they are on their own.
I’m one of those parent ATM :-/ Sometimes I do say no but it’s so hard for me to deny them all the time, so I end up giving in and giving them the loan which results in a gift because I know once that money is handed over I won’t be seeing it ever again.
@MommaStar: I’ve got a few of those outstanding loans myself, although not with family. That’s why I’ve shut down the bank:
http://www.donnafreedman.com/2011/01/30/im-not-a-payday-lender-but-i-play-one-on-tv/
Thanks for reading, and for leaving a comment.
Its hard to bite your tongue when you see someone about to take on the responsibility of parents or inlaws. Reality can be quite stressful compared to the idea of helping them.
I really enjoyed your article about Aunt Dot and what broke really is. SO True! Seeing people say how broke they are with nails and hair done and cell phones really bugs me ~ You are surely a blessing to her and your cousin!
My parents have never asked me for a loan, but I’ve seen them struggle with whether to intervene when one of their parents obviously needed one and was too proud to ask. After it became clear my grandmother wasn’t willing to have that conversation with them, they quietly found other ways to help out (bringing her food, taking care of her yardwork, giving her gas and grocery cards, etc.). In retrospect the biggest thing they could have done to help her was try to nip some of her bad spending habits in the bud before they caused such problems, but there’s also the possibility that would have gone over like a lead balloon. It makes me hope that if my parents ever start to wander down the wrong financial path themselves once they’re retired and on a fixed income, I’ll have the temerity to try to help them before it’s too late.
A friend helped his mother out. That enabled her to give money to his sister who was 50+ and unwilling to sacrifice her pride and work in Walmart after she had bragged about being a decorator. A trade school took her money after she quit a responsible hospital administration job. She has neither the personality or talent to be and “interior decorator.” Yes, she wants to be a designer but doesn’t know it. So, the mother enables her to live like she must and the son subsidizes the mother when she is broke. The mother accidentally let it slip that she paid the daughter’s bills. It is so entangled that only backing away will help.
Raising Hand! My DH and I subsidize BOTH mothers. They are very poor. MIL has taken heed and really minds her new spending plan (for the most part except when she weakens in supporting LOSER $100K earning SIL).
My mother is a different story. She now “expects” help and throws tantrums when me and my sibs and the grandkids don’t just do things for her. DH and I discussed the what to do about it last night. She needs the help but she’s not willing to make any changes.
I’m going to check out the link in your previous comment –
Thanks Donna!
@Child of Hip Hop: That’s a very difficult situation, both financially and emotionally, with your mom. It can be very hard not just to say “Here are your options, if you cannot choose one of them then our conversation has to be over” but also to make it stick.
I wish you luck. Thanks for sharing your story.
Hi, Donna and glad I found your blog. I did support my parents for about fifteen years; it did not break my bank account but it did break my heart. My Dad retired as a high ranking officer from the army of a small European country. My Mum looked after everyone – and she did it well. They had money saved, they were always careful, they never did much of the stuff that makes ‘your heart sing’. They have money saved for another apartment, and thank Goodness, had their own paid off. Until the hyperinflation from the early 1990s transformed their savings from an apartment to two ice-creams within three-four months.
I always helped them although they were too proud to a ask. I’ll transfer the money and they will protest but then it will be used. I always knew that they will be as careful with it as possible.
Helping our parents is sometimes necessary because of circumstances completely beyond our control. I am just glad I could do it!
I have a question for you? What if you can´t and as a result of paying their rent you have become homeless and fell into debt? What would you do then…? Everyone has different circumstances, some have good responsible parents and some have bad irresponsible parents. When I was homeless they were remarried and I was not welcomed to live with them… Today my father is retired.. but my mother after 31 years is still irresponsible and still asking for money….It is a never ending story and she does not want to go and get professional help… So, it is not as peachy as some people say, and that they are happy to be able to have helped their parents.. Somtimes it just isn´t that easy–because sometimes the parents never even helped you when you were younger.. you try to get on your feet as a teen but they are always dogging you for money to pay their bills and on top they work… and just do not manage their money well.. in this case only my mother.. So what does one do? You have to see that side of the coint too.
At some point, you distance yourself. Some people I talked with have had to do just that, either moving out of the area or screening calls/e-mails. It may sound callous but you have to see to your own needs so that you aren’t in a pickle when you get older.
The hell of it is that some states may force you to provide for your aging parents, no matter how badly they’ve treated you. These laws aren’t often enforced but they could be.
As one of the therapists I interviewed on this topic put it, you state what you can do — for example, send $50 in cash per month and no more, or pay for $50 worth of groceries every month. Then you say, gently but firmly, “If you try to bring up other options, this conversation has to be over.”
Making it stick? Another question entirely. Good luck.
I loan my parents money, I gave them $1700 a few months ago to fix their car, they’re paying me back on schedule, so the bank is still open to them! They save money, but probably not as much as they should so sometimes they get wiped out by a few things coming at them fast, I’m happy to catch them when they fall, they’re my parents and they deserve my help, they did raise me! 🙂
I have helped a brother. He called, he and his wife had hit the wall and needed 1,000 dollars. Since I had saved all of the money inherited from my parent’s estate I had the amount to give, yes give to him. I gave it willingly, with a calm feeling this was the right thing to do. I told him he did not have to pay it back.
Flash forward several years. The 80 year old clock he’s received from a parent, he calls and asks me to take it, it’s mine. That clock is worth a lifetime of family memories, is one of a kind and worth way more than the money given. He paid me back in a way that meant more than the money given and kept that piece in the family. I thanks him everytime I hear it chime.
My husband’s parents live in our back yard in a motor home. They live on their social security. They never saved anything. I make sure they eat two meals a day with us, and we pay for the heat, cable, internet, and water for them. And its sad that they still run out of money at the end of the month. So Yes, we do give them money and yes, I really wish they would stop going to the casino so much.
Hi! Your article spoke my mind! I had been Brain-washed since young to support my parents and help in every way I could when they get old. I have an older brother which this theory doesn’t apply to him, in fact, was taught to support him if need be (on top of my parents). Free giving of cash since ten years ago, from the impression of “save up for yourself, we don’t need the money” to “appreciate your contribution, we will save up the money for you and will never touched it” to “we need some home renovation.. new television… fridge… trips.. cruise..”. Economy isn’t getting any better, paycheck wasn’t increasing but the needy parents became more demanding as my sole working dad’s business wasn’t going too smoothly. All this for me to provide while reminded to keep my brother out of this hassle. Soon, wedding came for me, rather than being supported, advance payment of two years home allowance was asked and all expenses were covered by newly weds. Bride’s side of wedding favours (cash) was taken away without permission in my parents’ piggy bank. During pregnancy, I mustered my courage to stop the money giving to parents – to bring to an end. Miserable parents and drew their line to not help with condition when my child was born. Later, Mom had to do a surgery, took the initative to confess for not being able to help due to some housing commitments I have. Advised parents to use the pot of gold they said they saved for me during this critical time. I assured them, I had no means to take or have them give me that pot of gold which they saved for me. Confronted by Dad that I don’t have any rights to even touch that, it’s theirs all his while for their retirement. My last scarred image of my dad stating, “If you don’t provide support financially and label yourself to be a respectful daughter? Forget it! Hope you managed to face your heart and sleep at night!”
I am so sorry that you were financially exploited, and that they tied it to filial piety and “respect.” So manipulative.
Not sure what it’s like in your family of origin, but in this country you don’t “owe” your parents.
I wish you peace, and healing.
Thank you Donna for your reply, it means a lot. Currently I’m in the state of acceptance to how my (Asian- Chinese) parents hold strongly to filial piety as it is their way they raised me. However from time to time, it makes me sleepless to reminisce days of not knowing and just robotically obey to their demands. I became rather distant with my parents after realizing I was their ATM, victimized for over the years with their manipulative and deception. Yet, there’s a side of me, feeling the guilt for mistreating them or being defensive about all this. Am I wrongful to act like this? My brother is also sold into the role that I am just being disrespectful and heartless to them. I am pretty much alone in this matter and at doubt if I’m really the victim or are they?