Money Dilemmas

[Finance Dave]

Each of us has probably had one, a situation where you're not sure how to act as it regards money. Sometimes it's with family, sometimes friends, etc.

I'll start with a couple, feel free to add your own.

1) When I was in my mid 20s I was an auto mechanic. I made about $20k/year...which would be like maybe $32k today. Not poverty, but not enough to buy the finer things. My brother was an exec at a large company, and my sister was a doctor. Most holidays (Easter, Father's Day, Mother's Day, etc.), they'd all want to go to these fancy brunches that were $18/person...and I was bringing my girlfriend. I could not afford it.

I wasn't sure what to do at first. I wanted to go, as I lived in a different city than my family, but the cost was prohibitive for me. The first time, I sucked it up and paid it....but then my bank account was low at the end of the month. I wasn't spending elsewhere frivolously....so I realized this is not something I could do 6-7 times a year.

So the next time around, I called the restaurant in advance and explained my situation. They would usually say they had a lower-cost option for me, such as a soup and salad bar for half the cost....so we did that for a couple times. Then my brother noticed what we were doing, and he offered to pay the difference for us between that meal and the regular meal...he was very kind about it. So we did that a couple times.

Now I make as much money as they do...so I've returned the favor a couple times. It all worked out. What would you have done?

2) Where I work, we have recognition events when employees reach milestones, or retire, or leave the group, whatever. We used to fund these out of department expenses...take everyone to lunch or have it catered in, whatever.

But then the recession hit. After that, when these events would come up, we had managers suggesting we do "pitch in" events instead. While I could afford this, I didn't think this was right for my staff...some of who are making around $30k/year. Because the company can't afford it they ask employees to fund it? Employees are struggling too...not just the company...this did not seem right to me. Certainly it's one thing if they make the pitch-in optional...but it was more like "Dave, your team can bring the drinks".

I struggled with this for a bit...not knowing the right answer. I wanted to support the person being recognized, but was not willing to force my employees to contribute if they didn't want to.

In the end, I held a meeting and told everyone that their participation was optional...and that I understood some of them had other financial obligations...and nothing would be held against them if they did not attend. I even bought a nice card and said as an alternative everyone could sign it.

Of course the implication of this was that we did not have enough people supporting it to bring all the drinks...so I let my boss know this in advance. In the end, my boss bought the drinks with his money...but he clearly was not happy with me for not "pushing" harder. I have not lost any sleep over it...I think I did the right thing.

Now that times have improved, this has loosened up a bit...company-paid events are back on!

[Sarah in SC]

I think you are a kind and thoughtful brother and boss, if you ask me!
Both of those situations were handled gracefully and honestly.
I, too, have worked in situations where there were big gaps between disposable incomes within an organization, and tried, perhaps less elegantly, to resolve them when group events took place.
I think you've done a good job with both of these.

[Dreamer]

Quote:

Originally Posted by Sarah in SC I think you are a kind and thoughtful brother and boss, if you ask me! Both of those situations were handled gracefully and honestly. I, too, have worked in situations where there were big gaps between disposable incomes within an organization, and tried, perhaps less elegantly, to resolve them when group events took place. I think you've done a good job with both of these.

+1

[Blackwoodt]

Quote:

Originally Posted by Finance Dave Each of us has probably had one, a situation where you're not sure how to act as it regards money. Sometimes it's with family, sometimes friends, etc.

You live by the golden rule: Treat others as you would like to be treated. Coming from a background where money was tight, you know how others less fortunate than you feel.

I struggled too making ends meet when first starting out. Now I make more money than my siblings, so when we have dinners, I buy. No one makes a big deal out of it, I’ve been lucky in my career, and we are all just happy to get together.

Thankfully where I work for the next 190 days is still picking up the tab for any employee recognition gifts, or luncheons. I think it’s commendable the way you handled the issue where you work!

[martyp]

At our organization we had special performance awards of $1000. I got two of these in my later years. It was an awkward program because they would be given to individuals but it was clear the accomplishment was a group effort. We occasionally went out on group lunches and I would offer to pay a couple of times until I depleted the money. I never really said what I was doing.

[W2R]

Quote:

Originally Posted by Sarah in SC I think you are a kind and thoughtful brother and boss, if you ask me! Both of those situations were handled gracefully and honestly.

+1 You handled these beautifully IMO.

Retirement celebrations at my work were traditionally at restaurants. So, in addition to contributing to the retirement gift, we had to pay for our meal. This was about $30 on average, the same fee for everyone and paid in advance with no options for a lower priced meal. This was way more than I ever paid for any meals when I was in the accumulation phase. So, I didn't go. I would approach the retiree individually and congratulate him/her that way. It was awkward and I felt bad, but spending that much on lunch was just not consistent with my LBYM efforts at the time.

When I retired, I started what I hope will become a new LBYM-friendly workplace tradition. I had my party well after lunchtime, in a conference room at work with non-mandatory potluck snacks. People could come and wish me well, and if they were busy they could grab a plateful of snack food and vanish to do their work. The conference room was filled, the food was great, and it went very well, all in all.

[Danmar]

When I was younger and money was pretty tight my parents would often ask us out for dinner and pick up the tab. We really ppreciated this. Now that we are much better off we pay for my mother and siblings when they are included. This also extends to trips that we pay for if we want their company. I certainly think those that can afford things like this should be generous.

[LOL!]

Here's one: I was living overseas. My sister decided to get married back in the US. If I went back for the wedding, I would not be able to qualify for the foreign income exclusion and would have had to pay a boatload of taxes. Plus I didn't have the money for the round trip airfare either. My parents offered to pay for the airfare, but they would not pay for my taxes. I did not go to the wedding.



If I invite my siblings out to a fancy brunch, then I pay. That's not a problem for me. I am surprised the OP's siblings did not pay for his meal. Or maybe there was some pride involved?

[lemming]

I don't want to stop anyone from picking up the check, that's always a nice gesture.
But please don't announce you are doing it because you make sooooo much more money then I do. I get that, but my buying dinner once in a while isn't going to break my retirement.

[Khufu]

Quote:

Originally Posted by W2R +1 You handled these beautifully IMO. Retirement celebrations at my work were traditionally at restaurants.

How the world has changed. I worked in New York City for the last 25 years of my career. I never saw anyone retire in any company I worked at. The last place I worked at had 500 employees or so and was a ten-year old company. I was the only person ever to retire from there. When i told people I was retiring they kept asking me where I was going to work next.

[W2R]

Quote:

Originally Posted by Khufu How the world has changed. I worked in New York City for the last 25 years of my career. I never saw anyone retire in any company I worked at. The last place I worked at had 500 employees or so and was a ten-year old company. I was the only person ever to retire from there. When i told people I was retiring they kept asking me where I was going to work next.

I didn't notice any difference at any of the jobs I had (but then I didn't work in NYC or for any companies that new). The senior scientists at my work were generally in their 50's to 80's in age, so perhaps that made a difference. We also had the semi-obligatory restaurant farewells for longtime employees leaving for other jobs, as well, or even for those being promoted to different parts of our organization where we wouldn't see them much. These were all supposedly important to go to for networking and/or office politics reasons, but I couldn't afford to go to very many of them at all.

[Zero]

Here is my current money dilemma and it's not a fun situation to be in because it involves my deceased uncle's 2 sons in their 30's and their current long term unemployment. They live in a medium size city in Oklahoma and are relatives that I've only seen maybe 3-4 times, ever. But did visit a couple of years back because my uncle was gravely ill.

Recently one of them called (they are sharing a home) and explained that they don't make enough in unemployment to cover expenses and he asked for a loan of $10,000 to pay his mortgage that was in arrears.

I am not going to send $10,000, no way. They both smoke constantly and drink heavily, but I do feel that I could help out a bit by sending $2,000 to start and then $500 a month for 6 months or so till they find some kind of work.

I'm not going to set up any draft from my brokerage, or it's associated bank account. Does anyone know of a method that I could deposit $3000 in a bank account and limit their withdrawal to $500/month?

[obgyn65]

I agree with Sarah.

Quote:

Originally Posted by Sarah in SC Both of those situations were handled gracefully and honestly. (...) I think you've done a good job with both of these.

[caninelover]

Quote:

Originally Posted by Zero Here is my current money dilemma and it's not a fun situation to be in because it involves my deceased uncle's 2 sons in their 30's and their current long term unemployment. They live in a medium size city in Oklahoma and are relatives that I've only seen maybe 3-4 times, ever. But did visit a couple of years back because my uncle was gravely ill. Recently one of them called (they are sharing a home) and explained that they don't make enough in unemployment to cover expenses and he asked for a loan of $10,000 to pay his mortgage that was in arrears. I am not going to send $10,000, no way. They both smoke constantly and drink heavily, but I do feel that I could help out a bit by sending $2,000 to start and then $500 a month for 6 months or so till they find some kind of work. I'm not going to set up any draft from my brokerage, or it's associated bank account. Does anyone know of a method that I could deposit $3000 in a bank account and limit their withdrawal to $500/month?

I would just set up a checking account in your name, and set up a recurring electronic payment (either directly to their account or via check) for $500 a month (or $250 twice a month) to them until the account is depleted, then close the account. Alternatively you can set up the account with their names on it as well and they can draw on it a little bit at a time. Only problem is if they overdraw then you'll probably get hit with overdraft fees. I would just send them a check every month, either from your main bank account or from a separate one if that makes you feel safer doing it. A number of online banks and credit unions still let you open no fee checking accounts w/ no minimum balance.

[caninelover]

So here is a common work situation that comes up fairly regularly where I work. People with kids who are doing fundraising for their kids' schools or activities will bring in something they are selling to aid the fundraising, and ask co-workers to 'order' whatever they are selling to support them (e.g. cookies, candies, gift wrap, etc). These items are usually overpriced and not what I'd buy normally but there is the 'peer pressure' of having to buy something. I usually cave and order one of some inexpensive thing that ends up in the break area for everyone to eat (cause I don't want to). Once in awhile I wouldn't mind but it seems to be fairly constant, especially around the holidays. I really wish companies would prohibit staff from these types of solicitations in the workplace.

[Sue J]

Quote:

Originally Posted by Zero Here is my current money dilemma and it's not a fun situation to be in because it involves my deceased uncle's 2 sons in their 30's and their current long term unemployment. They live in a medium size city in Oklahoma and are relatives that I've only seen maybe 3-4 times, ever. But did visit a couple of years back because my uncle was gravely ill. Recently one of them called (they are sharing a home) and explained that they don't make enough in unemployment to cover expenses and he asked for a loan of $10,000 to pay his mortgage that was in arrears. I am not going to send $10,000, no way. They both smoke constantly and drink heavily, but I do feel that I could help out a bit by sending $2,000 to start and then $500 a month for 6 months or so till they find some kind of work. I'm not going to set up any draft from my brokerage, or it's associated bank account. Does anyone know of a method that I could deposit $3000 in a bank account and limit their withdrawal to $500/month?

Ok, you didn't ask for advice but here it is anyway.

Are you considering sending $2000 to start and $500/month for 6 months as a loan? Or is this a gift?

If they are already $10,000 in arrears on the mortgage, unemployment doesn't cover their expenses and they smoke and drink heavily then you may as well consider this a gift because there is very little chance that this will ever be paid back. Do you really want to gift them 6 months of smoking and drinking?

After 6 months what happens?

I don't know you or your family dynamics but this doesn't sound like close relatives. How many other "closer relatives" have they asked for money before they reached out to you?

Maybe you are very well off and $5000 is a just a speck of your wealth that you'd never miss and you like being generous. If you're not, then "lending" money to these cousins is not a good idea.

As for your question about how to deliver money to them, you can set up most bank accounts to make regular monthly payments to their bank account. Or you can send money for free via PayPal, use the Send Money tab, then the Personal Payments tab to avoid transaction fees.

[Sue J]

Quote:

Originally Posted by caninelover So here is a common work situation that comes up fairly regularly where I work. People with kids who are doing fundraising for their kids' schools or activities will bring in something they are selling to aid the fundraising, and ask co-workers to 'order' whatever they are selling to support them (e.g. cookies, candies, gift wrap, etc). These items are usually overpriced and not what I'd buy normally but there is the 'peer pressure' of having to buy something. I usually cave and order one of some inexpensive thing that ends up in the break area for everyone to eat (cause I don't want to). Once in awhile I wouldn't mind but it seems to be fairly constant, especially around the holidays. I really wish companies would prohibit staff from these types of solicitations in the workplace.

When our kids were in school we encountered this. DH worked for a public agency and they were not allowed to do these kinds of fundraising in the office. I was a stay at home mom. There were fundraisers too often so I finally got to the point that I asked the teacher how much the kid was supposed to sell, how much profit did that bring in. Instead of selling crap to the same people all the time, I donated the expected profit. It was usually $10-$15. Not a problem for us. When the kids were older they could do a job around the house to earn the money to donate - gutter cleaning, leaf raking, car washing etc.

The fundraiser was usually presented to the students in an assembly with a lot of sales pressure and contests for prizes. I remember one of these coming with instructions on who to sell to and it said that you should sell to your family and friends and your church groups. Have your parents set up a display at their workplace instead of going door to door in your neighborhood. I packed up the sales kit and sent it back to the school.

If you look into these fundraising companies and the junk they are selling you may be surprised at how little gets to the school.

[caninelover]

Quote:

Originally Posted by Sue J If you look into these fundraising companies and the junk they are selling you may be surprised at how little gets to the school.

That's what I always suspected.

Equally as irritating are friends or acquaintances that invite you to one of their home-based sales sessions (tupperware, avon, clothes, bags, candles, baskets, etc). I just flat out decline those 'invitations'.

[Zero]

Quote:

Originally Posted by Sue J Ok, you didn't ask for advice but here it is anyway. Are you considering sending $2000 to start and $500/month for 6 months as a loan? Or is this a gift? If they are already $10,000 in arrears on the mortgage, unemployment doesn't cover their expenses and they smoke and drink heavily then you may as well consider this a gift because there is very little chance that this will ever be paid back. Do you really want to gift them 6 months of smoking and drinking? After 6 months what happens? I don't know you or your family dynamics but this doesn't sound like close relatives. How many other "closer relatives" have they asked for money before they reached out to you? Maybe you are very well off and $5000 is a just a speck of your wealth that you'd never miss and you like being generous. If you're not, then "lending" money to these cousins is not a good idea. As for your question about how to deliver money to them, you can set up most bank accounts to make regular monthly payments to their bank account. Or you can send money for free via PayPal, use the Send Money tab, then the Personal Payments tab to avoid transaction fees.

I have all ideas that it will end up being a gift even though I want/expect to be repaid. And exactly, if this loan just enables them to continue expense/bad habits, then I've been misled by them and I figure any relationship with them will be long gone.

I do have the money to give but not because of wealth but more so because I spend very little for toys or status. But $5000 is not given lightly.

Unfortunately, I know very little about the other relatives there in OK, and hardly know these two cousins but I knew their dad (my uncle) fairly well because he visited my dad in Los Angeles several times. I guess my willingness to help these guys is based on memories of the uncle.

This is kind of a stressful thing for me and it does not feel good.

Thanks for your comments and on Monday, if I decide to go ahead, I'll look into one of the local banks setting up a monthly xfer. Might even cut down the per month amount.

[Sarah in SC]

Zero, I know this isn't really what you want to hear, but I think a better way to honor you uncle's memory is to donate that money to a cause that was meaningful to him. I think your cousins are opportunistic and using your emotions to manipulate you into giving them this money.