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A question about my sister
Old 07-06-2014, 08:51 PM   #1
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A question about my sister

Hey everyone. This doesn't exactly fit the topic of this forum but I was looking for something for Dave Ramsey's style, but the only forums there you had to pay for. I googled Financial Independence Forum and found this, so I went with it.

Dave Ramsey addresses some stuff like this but nothing exactly that I saw. I'm 23 years old, I'm doing pretty well, good job, saving a good amount, no financial dependence on my parents for anything, all that. I'm working towards retiring early. My sister is 21, she's still in school so my parents are mostly supporting her. She has a part time job but only $14/hr for 10-12 hours a week. She's not incredibly wasteful (by normal standards) but she's not frugal either. What most concerns me is what my parents pay for her. Now, this is really their business, not mine, but I can't help but worry that it's unsustainable and will be ongoing. My parents are both retired, and have a networth of just slightly over 1M, most of that is in home equity. They own their home and 2 cars outright, but they only have about 400K-500Kish in financial assets, and they're spending it quick. They recently bought my sister a $27,000 car and a $69,000 condo in town. I don't know what her expenses are exactly but I expect something like $2000 a month, and that's without rent/mortgage or tuition. I'm worried that they are seriously depleting their savings quick. I don't think my sister will be able to maintain what life style she has once she graduates, she goes to a local state school (which is fine, I went to the same school and got a good job before I graduated) but she's majoring in psychology and isn't doing well at that even (not failing, but mostly Bs and Cs - I asked and she said her GPA was 2.8 or so), so I am worried it will be hard for to find professional work. Even if her part time job turned full time, that's still only $2240 a month, and after taxes more like $1600. And I am skeptical she'll even get that, it sounds like that business isn't doing well. To clarify, she's not a bad person or anything, she just doesn't watch money or think about her future at all.

I'm worried that my parents will either deplete their savings too quick trying to finance her and will go broke, or will cut her off and she'll just pile on debt until nothing can be done. I've been trying to talk to her about school (trying to get her to major in something more profitable instead, she just finished sophomore year so it's not too late), or about just making sure she does better so she's in the best position of all psychology graduates. She always says she's gonna get straight As next semester, and next semester is always the same, a couple Bs and a couple Cs. I tried talking to her about her spending yesterday for the first time, but she doesn't even know what she spends. Also, it's hard for me to do much since I don't live in town any more (my job is about 800 miles away from my hometown, I'm planning on going back for Thanksgiving), so it's harder for me to help from here. I tried asking my parents what they thought and they basically said it's not my business (which they're right, but I'm just worried about them).

I'm wondering what advice you guys have. Should I try to do anything? If so what can I do?
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Old 07-06-2014, 09:02 PM   #2
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You can't save them all.

You might try showing them the numbers on how this is all going to pan out, but based on your descriptions of their personalities and reactions I doubt it will have any effect.

You are right. Your parents will be broke very soon if they keep this up. Your sister may very well sink into a lifetime of servitude to the credit industry.

Save yourself.
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Old 07-06-2014, 09:12 PM   #3
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I agree with Walt.

You are stepping into a situation your are parents going along with. Just write them and express your concern politely. Maybe they will see the light when things get worse and pull the plug or take other action. Or maybe all will work out (you never know).

She may find a guy and fall in love and get married and sometimes that makes a lot of things change. There are too many variables in a situation like this so predicting an outcome is guesswork.
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Old 07-06-2014, 09:15 PM   #4
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The best thing my parents didn't do was to give me money when I dropped out of school and moved hundreds of miles away. I didn't ask anyone, just drove.

I learned what it waa like to live on a tiny biweekly paycheck.

They did, however, come out to make sure I wasn't dead. Good Mom and Dad.

I flipped around (somewhat, you know my posts).
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Old 07-06-2014, 09:18 PM   #5
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You can't save them all.

You might try showing them the numbers on how this is all going to pan out, but based on your descriptions of their personalities and reactions I doubt it will have any effect.

You are right. Your parents will be broke very soon if they keep this up. Your sister may very well sink into a lifetime of servitude to the credit industry.

Save yourself.
Sorry, but that answer really doesn't sit well with me. Because if either of those two things happen, I now have two options. Either bail out whoever needs to be bailed out (either my parents if they keep subsidizing her, or my sister if she subsists on credit cards), or let them go hungry. These aren't strangers, they're my family, I can't let that happen, I have to bail them out if it comes to that. And when I do that, I'm not saving myself either.

I know that "stay out of it" was an option I presented as an action I could take, but it just isn't actually.

I can see a bad situation developing, I just want to stop it. I just can't figure out how to.
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Old 07-06-2014, 09:21 PM   #6
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It is good for you to worry about your parents and your sister. However, once you have said your concerns, there is not anything for you to be able to do to change the situation. Be responsible for yourself and work hard at your job while saving for future.

Making a big deal and creating bad feelings will not benefit you or family relations in the future. Show them all by example is the best way to validate what you have told them.
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Old 07-06-2014, 09:25 PM   #7
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Save yourself.
+1

Sadly, there are many, many people in the world who approach financial matters like your parents and your sister. As Walt said, you can't save them from themselves - some won't listen, some just don't "get it" until it is too late.

Your parents and your sister have to live their own lives and make their own mistakes. Yes, it is painful to watch but you really don't have any way to influence their actions beyond what you're already doing.
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Old 07-06-2014, 09:38 PM   #8
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I guess I should clarify. I think my dad gets that it's unsustainable. He said that they spent about 70K in just daily expenses last year for them and my sister, but the spent a lot more because they bought that car and condo and my parents went on a vacation to France and Italy - and he can put some numbers in a spread sheet and see where things are going, but he just isn't doing anything about it. He became a millionaire because he earned well, but I don't think they've ever been good on the spending side (I'm not either honestly, but I'm working on it), and I think maybe he's just too used to having an income and hasn't adjusted correctly yet.

I don't think my mom gets that it's unsustainable, or my sister either. So they just go along with what they've always done because there's always been money to spend.
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Old 07-06-2014, 09:38 PM   #9
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Anyone on the Dave Ramsey forum ( of which I am a Legacy member) would tell you the following, and they are a pretty brutal bunch:

This is not your problem nor is it your issue if your parents overspend their money. Do they have Social Security and/or pensions? How old are they that they are retired and you 2 are relatively young? If they are in their 60's they might not be that bad off. Maybe you can give them a copy of My Total Money Makeover or ask them to go to FPU. Or ask them to run FIRECalc but prepared for them to say no.

You run the risk of experiencing what DR would call 'powdered butt syndrome' - they diapered and powdered your butt as a baby so they aren't going to listen to you much as an adult. You can make suggestions but their lives and decisions are their own. Don't get overly involved in their mistakes - you can't control them & you aren't responsible for them.

In a way it's a good thing you are 800 miles away. I think the best thing you can do is teach by your example.




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Old 07-06-2014, 09:46 PM   #10
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One way of looking at it is to expect no inheritance, do what is best for your own security, and listen if/when asked for advice.
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Old 07-06-2014, 09:49 PM   #11
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Why didn't your parents buy a car and condo for you? Are you guessing at your parents finances or do your parents and sister discuss their finances with you? You may be worrying when there is no reason.
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Old 07-06-2014, 09:59 PM   #12
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Your parents may just be smarter than you give them credit for.
Politely let them know your concerns and then keep your nose out of their business.
They earned and saved that much money, raised a financially smart kid, give them some credit.
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Old 07-06-2014, 10:08 PM   #13
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Why didn't your parents buy a car and condo for you? Are you guessing at your parents finances or do your parents and sister discuss their finances with you? You may be worrying when there is no reason.
My dad discusses with me, often he just spontaneously complains about "Your mom just spent $600 on an iPad" or "Your sister just bought $300 in clothes" or something, and then I ask how things are overall and he tells me more about all his finances. My sister doesn't know what she spends (and neither does my dad) so for that one I'm taking a guess. But I know before I moved out of town she was still buying new clothes, fancy drinks from Starbucks, eating out, all that.

Edit: I do try to bring up that he should do something different, and that's when the "none of your business" comes up usually.

My parents are both in their early 50s, so they have a while before SS. They have some 401K but that's part of the 400-500Kish they are counting. There's no pension.
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Old 07-06-2014, 10:18 PM   #14
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My parents are both in their early 50s...
On a more positive note, they may be able to go back to work if it becomes obvious they can't support their spending.
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Old 07-06-2014, 10:28 PM   #15
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The OP is 23 and worries about her parent's squandering their money. Since the parents are 50 something I don't see their behavior changing. It is admirable of her (OP) to show concern, but at the end of the day the only person you can control/change is your self.

Having said that, sure, go ahead and have a frank, non judge mental discussion with your parents about the sustainability of their lifestyle. At least you can take comfort in knowing that you tried.

In any case, good luck to all of you.
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Old 07-06-2014, 10:31 PM   #16
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You can't save them all.

You might try showing them the numbers on how this is all going to pan out, but based on your descriptions of their personalities and reactions I doubt it will have any effect.

You are right. Your parents will be broke very soon if they keep this up. Your sister may very well sink into a lifetime of servitude to the credit industry.

Save yourself.
+100
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Old 07-06-2014, 11:18 PM   #17
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My parents were very conservative, ditto one brother. My sister is a wastrel, but her separately living but very responsible husband has a pension and keeps her on an allowance. I doubt she has lifetime earnings herself of > $150,000.

I have one cousin who worked hard since childhood, got a pretty good inheritance, but tried to support her alcoholic brother and lately she has been unable to get work in her field. My sister told me her next likely event is bankruptcy and being on the street. She is far from SS.
She is also a spendarina, even though she has always been single. A soon as her useless brother figured out that she might not be able to continue supporting him in the manner to which he ahs become accustomed, he took off, I guess to see if he can still attract a lover to support him.

Since in America we have no control over our relatives, we have to realize that they may well get themselves into really bad trouble, but that is not our fault or our responsibility to remedy. These people will rarely do anything sensible or valuable to anyone else.

Also to OP, it isn't very cool to come asking for suggestions, then reject them. If you don't like them, don't apply them. You are definitely not our responsibility. I am often amazed at how much information and experienced help members are willing to give to strangers who have never given them anything, and are not now offering anything of value in return for the advice they are requesting. Advice from experienced, self made millionaires, many with some age on them, is very valuable
.
Ha
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Old 07-07-2014, 12:33 AM   #18
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You can't save them all.

You might try showing them the numbers on how this is all going to pan out, but based on your descriptions of their personalities and reactions I doubt it will have any effect.

You are right. Your parents will be broke very soon if they keep this up. Your sister may very well sink into a lifetime of servitude to the credit industry.

Save yourself.
+1

I love my family to pieces and I hate to see some people suffer the consequences of poor financial decisions. But they are adults. I can't tell them how to live their life. I offer my opinion when solicited. In my experience, it is a futile exercise. Overspending is often the culprit in these situations. But any suggestion to cut spending and live frugally is generally not well received.
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Old 07-07-2014, 06:25 AM   #19
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I can see a bad situation developing, I just want to stop it. I just can't figure out how to.
You are the only person you have power over.

You could give them books on money management or pay for online traaining for them.
But as long as they are not ready for it they would just ignore your support or even regard you to be insulting.

If your dad brings up the "none of your business" you might reply that it could become your business if things go on, as you will have to support them in their old age. The downside is that they might take this as incentive to spend more.

I love my family a lot, but when I give advice I know that I have no powers on their implementation.
On the other hand, why should those who took the freedom to ignore my advice be entitled to rely on my financial support?
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Old 07-07-2014, 06:35 AM   #20
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Not sure I'll be of any help here, but I think something similar will happen with my sister.

She basically got a house for (almost) free from our parents, is employed on and off in a rather low wage field (speech therapist), but steadily declining in hours worked. She keeps leaving employers, gets herself put on sick leave, or sometimes fired. It's never her fault though

She's been unemployed since december, and mostly spends her days training a new dog she bought and taking vacations. In her situation I'd be panicking instead. She has a boyfriend now, at least he's earning slightly above minimum wage.

The last savings she has are now dwindling I believe. She's 31 years old and talks about having children, too

Good thing she lives in a socialist country (Belgium, a bit like France), so total destitution probably won't happen. She'll probably end up with a higher social security than me in the end. The state provides ..

From my side I am leaning towards intervening only when there is really big trouble, and only if it doesn't jeopardize my own financial security. Parents are financially sound, luckily.

Towards the OP: You might want to try forcing the conversation with your father by mentioning you are thinking about setting aside money to support him in a few years. If that doesn't wake him up, nothing will.

I'm sorry you are in this situation.
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