Spendthrift Mom

[Milton]

Well, looks like this fellow's mother has a bizarre interesting rationale for spending everything:

I vividly recall in grade school her telling me that "if money was made for saving, God would have made everything free." That philosophy has been a guiding principle in her life.

Love & Money - WSJ.com.

Personally, I'm not sure that things are as bad as he believes. In the first place, the inheritance will presumably be some time in coming, and perhaps his mother may not be quite so keen on "the grand consumer opportunity" when she actually gets her hands on the money.

Secondly, his mom reportedly intends to use the inheritance to upgrade from a one-bedroom condo to a two bedroom condo. If necessary, the latter could later be sold, leaving mother with a cash reserve. It's not like she plans to spend the money on a new car or a cruise.

[Nanita8140]

You can follow this writer's family stories weekly in the Florida Sun Sentinnel(Sunday edition). Last I read, his grandmother became sick, so he moved the grandmother and an aunt into one house so as to help ends meet. His "mom" if I recall correctly didn't/couldn't/or wouldn't come back from India to the states to care for her mother. She sounds to me to be a very irresponsible woman from all I've read up to now. Last I read from him he wanted to move his family overseas to Japan but have since changed their minds for many reasons and one may be because of his sense of obligation for his grandmother.

[Jessica08]

We can't really judge without hearing all sides of the story. Perhaps she grew up very poor and never learned proper money management skills. This could explain why she would want to live a better life before she dies. What will happen to the money if him mom doesn't spend it all? If it were to go to the government, I understand why she would want a large portion now. But if the rest would go to her son, then that would make her very selfish.

[CitricAcid]

Originally Posted by Jessica08

We can't really judge without hearing all sides of the story. Perhaps she grew up very poor and never learned proper money management skills. This could explain why she would want to live a better life before she dies. What will happen to the money if him mom doesn't spend it all? If it were to go to the government, I understand why she would want a large portion now. But if the rest would go to her son, then that would make her very selfish.

If she grew up poor, I would expect her to have much better money management skills than if she had grown off very well off...

[Jessica08]

Originally Posted by CitricAcid

If she grew up poor, I would expect her to have much better money management skills than if she had grown off very well off...

Not necessarily. Many people are well off because they have good money management skills. If she came from a family who didn't, and never had the resources to learn these skills, then it would make sense that she would not have the proper skills now.

[Marquette]

Originally Posted by CitricAcid

If she grew up poor, I would expect her to have much better money management skills than if she had grown off very well off...

Growing up poor is actually the biggest detriment I've faced... not because I didn't know what it meant to stretch a dollar or live on as little as possible, but because, by golly, I finally had money! All those years of not getting the latest and the best, I was finally entitled!

My wife had a similar upbringing and a similar lifestyle when we met. Fortunately, our income far outstripped our desire to increase our lifestyle, so we quickly paid off the $13k that was on the credit card and then realized that we were happier living like our parents than our peers. Still, that put me back a few years on the ER trail.

[CitricAcid]

In a similar vein, however, those who grow up well off, whenever they get out of college or high school or get their first job feel that they can live on the same amount of steak, food, nice clothing and housing quality that they had grown accustomed to. Most people will not realize that initially and have to make considerable (at least to them) sacrifices, pile up a ton of consumer debt, or go bankrupt. But, those who are accustomed to stretching a dollar will be able to transition better without the expectation/entitlement of growing up well off.

[bssc]

I suspect that it is the person, not how they grew up. My wife grew up poor with hand me downs, I grew up rich, with maids and cooks. Both of us are savers and clip coupons. (I saw one of our VPs at Costco, he makes a ton of money but he still had the coupon book with him and was using it). Our sisters are both spendthrifts. I don't think that you can generalize by class.

[Want2retire]

Originally Posted by bssc

I suspect that it is the person, not how they grew up. My wife grew up poor with hand me downs, I grew up rich, with maids and cooks. Both of us are savers and clip coupons. (I saw one of our VPs at Costco, he makes a ton of money but he still had the coupon book with him and was using it). Our sisters are both spendthrifts. I don't think that you can generalize by class.

Children learn from their parents. If their parents do not show them how to deal with money responsibly, it is harder for them to figure it out when they are older.

I think you are right, in that bad financial practices don't always lead to being poor, and good financial practices don't always lead to being rich. But often things do seem to work out that way.

[harley]

Originally Posted by Want2retire

Children learn from their parents. If their parents do not show them how to deal with money responsibly, it is harder for them to figure it out when they are older.

I think you are right, in that bad financial practices don't always lead to being poor, and good financial practices don't always lead to being rich. But often things do seem to work out that way.

My granddaughter's father is living according to his father's financial philosophy. One of the best I ever heard - "Live rich to be rich".

This may be why my daughter was in court yesterday trying to get him to pay his back child support.

[bssc]

Originally Posted by Want2retire

Children learn from their parents. If their parents do not show them how to deal with money responsibly, it is harder for them to figure it out when they are older.

I think you are right, in that bad financial practices don't always lead to being poor, and good financial practices don't always lead to being rich. But often things do seem to work out that way.

Well, we both had the same sets of parents but ended up different, although both parents were thrifty. You have to listen to your parents to be like them. On the other hand, I have a friend whose parents were spendthrifts (love the irony in that word) and she became thrifty because she didn't want to end up like them.

[A854321]

I haven't followed this fellow and his mother's story, but I think Mom is quite remarkable. She actually moved to India so she could have an affordable lifestyle on SS. She does have some degree of financial planning to be able to do that, and some rather remarkable gumption.

Honestly, I contrast her with the QVC shopaholic in the other article and I'm rather impressed. It doesn't sound as though his Mom is constantly calling him for money. It sounds like she has some reasonable ideas about buying a larger, but not massive house. Who wouldn't want a 2 bedroom place if you were living in a 1 bedroom in India. As mentioned above, it's not as if she is going farther and farther into debt because of impulse buying. And it doesn't sound like she is doing anything unethical or illegal.

Perhaps she is unorthodox, abrasive, and maybe unreliable. But she has figured out one way to keep herself going.

[ladelfina]

mmm.. there is the unspoken issue in the article that a trust kicking off a monthly income will likely have as ultimate beneficiary the author (and possibly whatever other grandchildren). So that might be a conflict of interest.

This story itself is one more example of upbringing not having a positive correlation to someone's financial attitude. I think it's interesting how spendthrift/frugal parents don't seem to have a huge amount to do with whether the offspring are spendthrift/frugal.. judging by people's anecdotes. I think I would like to do a poll...

[lazygood4nothinbum]

a cousin of mine who i took to lunch last week is often concerned for her parents. the father (our blood connection) has to work even though he must be at least 75 years old by now. the mother is from a previously wealthy but poorer branch of an "old monied" family. the grandmother spent all which came their way and died poor so neither the mother, of course, nor my cousin have significant inheritance coming. the mother only knows how to spend. so the father will work until he is dead.

they have no savings to speak of but they do have a house paid off, worth maybe 2-300k which my cousin will have to liquidate later in life to help pay for her aging mother after her father dies so that he can no longer support the mother in the manner to which she has become accustomed. hopefully, with all due respect, the mother also will pass before her house money is completely gone.

my cousin is an incredibly responsible person with money and with family. i would hate to see her lose all the good ground she has struggled to gain by being dragged down later in life by her mom.

ps. ladel, i caught that conflict of interest as well.

[haha]

My take on this is that we don't know enough to accuse the author of thinking of himself. The trust might be small; he might have numerous siblings; he may not even be the remainderman at all. Also, it is clear that his mother is thinking of herself. "What if I don't get to spend it all?" Does she consider that she has no more inherent right to it than he does, or his children do? And, she will be depending on him- why not try to share with him?

We also don't know if there is any corpus liquidation in the trust, or how it would be figured if there were any.

If he is worried about this criticism he could consider a SPIA. But really, what he is advocating is what 95% of our forum members do- make your own annuity.

The other thing is- he admits that he will be called on to backstop his mother. It sounds like they are anglos- not people used to taking care of their parents like Asians are. I don't blame him for wanting her controlled by an institutional structure. For example, why does she need a 2 bedroom apartment? She can't sleep in both bedrooms at the same time.

She is currently living and saving on her SS. The trust payout, when it comes will be gravy.

Ha

[chris2008]

Would she still lawfully receive SS if she gets either the lump sum or the regular trust payment?
My guess: Mom might feel that the trust payment will just be a benefit for the SS system whereas she receives the same amount as before the inheritance.
If she gets the inheritance at once and buys a house for it she might not report the money to SS as income.
We can only guess...

[Caroline]

You can follow this writer's family stories weekly in the Florida Sun Sentinnel(Sunday edition). Last I read, his grandmother became sick, so he moved the grandmother and an aunt into one house so as to help ends meet. His "mom" if I recall correctly didn't/couldn't/or wouldn't come back from India to the states to care for her mother. She sounds to me to be a very irresponsible woman from all I've read up to now.

Maybe it's just me, but it seems a little invasive of this journalist to share his family dynamic with god and everyone, and get paid for same, while bemoaning his mother's lack of financial savvy.

He's not a dispassionate reporter -- he's part of that family and has an agenda (just like I have an agenda with my family, and everyone else does too.) So we're getting his side of the story, and his Mom and family are contributing to his livelihood every time he airs their dirty laundry.

I think he should leave Mom alone. She makes enough Social Security so as not to be a burden on him, if worst comes to worst. She was smart enough to move to India to make ends meet and is taking care of herself. If Granny wants to give her daughter the money up front, and if Mom wants to flush it down the toilet once she gets hands on it, IMHO that's her business.

[Martha]

Originally Posted by chris2008

Would she still lawfully receive SS if she gets either the lump sum or the regular trust payment?
My guess: Mom might feel that the trust payment will just be a benefit for the SS system whereas she receives the same amount as before the inheritance.
If she gets the inheritance at once and buys a house for it she might not report the money to SS as income.
We can only guess...

It won't effect her social security and the inheritance won't be income to her.

I have read this guy talk about his family before. I find it unseemly.

[Nords]

Originally Posted by Martha

I have read this guy talk about his family before. I find it unseemly.

I think he finds it therapeutic.

His wife has even done a Love & Money video or two of her own, so presumably he has her support.

For some reason, his grandmother did a lot of his raising. I don't know why his mother wasn't around for his upbringing, but there has to be a reason for a woman in her 80s establishing a trust for a child in their 60s...