Friends who didn't save . . .

[Mulligan]

A footnote to my last post: When I say "requests for money," I'm not talking about "supper" money or "the rent," although those requests would upset me, too. I'm talking for the most part about outrageous requests, such as the one my oldest sister made last year: "Please pay $50,000 so my youngest son can attend boarding school for a year in order to try to qualify for admission to a better college," she "asked." I was aghast. I replied that I had enrolled my own children in public schools for the entirety of their elementary and secondary education, as she well knew, and that, if I had decided not to send my own children to boarding school, why would I do it for a child of hers? We haven't spoken since.

That story takes the prize!

 

[traineeinvestor]

A footnote to my last post: When I say "requests for money," I'm not talking about "supper" money or "the rent," although those requests would upset me, too. I'm talking for the most part about outrageous requests, such as the one my oldest sister made last year: "Please pay $50,000 so my youngest son can attend boarding school for a year in order to try to qualify for admission to a better college," she "asked." I was aghast. I replied that I had enrolled my own children in public schools for the entirety of their elementary and secondary education, as she well knew, and that, if I had decided not to send my own children to boarding school, why would I do it for a child of hers? We haven't spoken since.

And if you had said "yes", no doubt you would have received requests to fund the college education as well.

 

[Loop Lawyer]

Having seen the very ugly side of having relatives turn to other relatives for financial support within my own family, I can sympathise but have to suggest that whatever you do, don't let your sympathy lead you to a position where you get dragged down with them - either financially or emotionally.

Thanks for understanding. I keep my distance for the sake of my financial and emotional health.

I wonder sometimes whether self-inflicted hard-up types realize how they have made themselves persona non grata. I don't think they do, for the most part. I think they tend to socialize with other people who make the same stupid decisions and behave the same way. They think the rest of us are strange. Sad, isn't it, how Financial Pig Pens drive away the kind they most need around them.

 

[traineeinvestor]

Thanks for understanding. I keep my distance for the sake of my financial and emotional health.

I wonder sometimes whether self-inflicted hard-up types realize how they have made themselves persona non grata. I don't think they do, for the most part. I think they tend to socialize with other people who make the same stupid decisions and behave the same way. They think the rest of us are strange. Sad, isn't it, how Financial Pig Pens drive away the kind they most need around them.

Quite possibly, but I'm reluctant to generalise - each of us is an individual and sometimes people do change for the better.

 

[Loop Lawyer]

Quite possibly, but I'm reluctant to generalise - each of us is an individual and sometimes people do change for the better.

When I "see" "change for the better," I will reconsider my decision to keep my distance for my own financial and emotional health. Sadly, I don't expect to see it. Irresponsibile people who choose to surround themselves with other irresponsible people do not, in my experience, leave the ghettos that they have constructed for themselves.

 

[jazz4cash]

.... Since we became FI, occasions arise where our well-off-edness becomes suddenly apparent. FAFSA is a land-mine that comes to mind.

How so, FAFSA?

 

[Telly]

...snip ...
My brother and his wife have no savings and they are in their fifties, and my sister in law has never worked, so no social security for her. They were never big spenders. Actually quite frugal. My brother just never made a lot of money, so not much left to save. How scary is that?

But if your brother has met the minimum requirements for SS, then his wife would be entitled to close to half again as much as he is entitled to, if she claims against his record. So in effect, together they get 1.5 times his individual record. And if he dies first, she can then claim 100% of his record instead of the approx. half. That all assumes that they have been married long enough to meet the SS years requirement for married couples.

 

[Telly]

How so, FAFSA?

IIRC, you have to list your taxable assets above a certain amount. Large taxable assets = large expected "Family Contribution" $. Roughly speaking, the larger the expected "Family Contribution", the less likely any financial aid $ will come the way of your student.

 

[growing_older]

I wonder sometimes whether self-inflicted hard-up types realize how they have made themselves persona non grata. I don't think they do, for the most part.

There is some estrangement in my family at my parents generation, between the siblings of that age. All the factions are more or less open to being friendly to the following generation, so my siblings and I have a front row seat to the rifts and points of view of both sides. For the most part the planners and savers think the others are irresponsible and have caused the distance by their poor decisions and occasional requests for unrealistic assistance. For the most part the nonsavers think they have had difficulties in life that were not their fault and blame the savers for the rifts because of their unwillingness to share the good fortune or even acknowledge the lucky advantages they benefited from. I suspect this is a common attitude in that each side believes they are in the right and the problems are the fault of the other. We haven't seen any obvious way to make peace after all the years and experiences that piled up.

We have started to see some of this developing in our generation, but with the glaring examples from our parents generation so obviously in front of us, we have been able to keep peace between the more well off and the less well off. Mostly. At least we've been able to keep our problems due to personalities and not economics, so far.

 

[Cattusbabe]

This issue resonates with me, too. My difficult situations do not involve friends, as I have always chosen my friends for their character and, to me, solid character definitely includes financial responsibility. We don't choose family, however, other than spouse and, arguably, descendants. I have five siblings still alive (one died), four of whom are financially irresponsible. They learned this from their mother, who is an "enabler" par excellence and is, individually, the most irresponsible of all. It is sad but true that my personal net worth is at least treble the net worth of all five of them, taken together.

The consequence of their decisions to live irresponsible lives has been a very high degree of estrangement. The specific causes of the estrangement are two: (1) actual requests for money, which I have come to refuse due to bad experiences early on; and (2) anticipated requests for money, which I simply don't want to hear. I find that the second is more upsetting than the first, and this has caused me to cut off contact for the most part. I wish I could figure out how to manage this better, but I can't. Who wants to socialize with a Financial Pig Pen? Not I.

Boy I'm glad you posted this. We are going through this with my recently divorced Daughter-in-law. She is 36 years old a former stay at home mom. GED only, no real skills. Marriage broke up in 2008 and this has to be one of the worse time for some one like that to try to find a job. The pattern has been hired to layoff in a matter of weeks. No savings and to proud to take government assistance. I think she is foolish to not avail herself of services she qualifies for. She would much rather depend on friends and family.

We have reached our limits of support and will be cutting her off since we will not put our situation at risk. This is killing hubby since his relationship with DD is strained and he would like it better. Even so he is Dad and would fall on his sword for his kids whether they appreciate or not. (They usually don't BTW.)

His brain knows what he should do but his heart wants to pull him in another direction and it is not easy watching this play out. Its that flesh and bone thing I guess. DD will be back with another tear jerking story and we are going to have to say no. We have already warned her that this will be our stand. You know how it is, they hear but then they don't hear. I know in the end he will protect us and not let his kid blow our life up. I love him and just wish I could make this easier for him. I have no children so can't feel this like he does. It sucks.

 

[chinaco]

We all have 'em.... Friends and family that are spendthrifts or did not prepare (but earned enough to prepare).

I have not intention of bailing them out.... can't afford to do it.

I have gifted some family members money in the middle of a specific crisis. When I did it, I took the opportunity to make it clear... tactfully (not going to happen again).

But those gifts have been in the few thousand range. I would not do a major bailout of anyone....

IMO - the best approach is to stay off the money subject and if it comes up... change the subject or play dumb and advise then to see a financial/credit counselor.

 

[JBmadera]

It is a very difficult subject to broach with friends and relatives. Normally if they ask "what are you reading now, or what's new with you" I will throw in something about Otar or Joe D and offer books/videos. Maybe it's a cop out but I don't want to come off "preachy".

Right now I have neighbors, my age 50+, who have cars (primary transportation) sitting broken with no money to repair and AC not working (gets 100+ here in the summer) and again no $$$ for repairs.

Common thread - their "retirement plans" are almost 100% dependent on receiving an inheritance.

Scary and sad.

can't believe I forgot this: we do send money monthly to DMIL, since she can't pay her own living expenses

 

[freebird5825]

I am surrounded by friends and acquaintances who live for the moment. It just boggles my mind that they buy all these toys on credit and do not save much, if any, of their paychecks.

As far as a bail out for friends, I learned my lesson several years ago. I only got stuck for $400, TG, but the Bank of Freebird is forever closed.

If I encountered a situation where someone got laid off unexpectedly and had trouble buying groceries, I would purchase a small size grocery store specific credit card and give it to them with no expectation of repayment.

If my situation comes up, and the word "lucky" pops up, I gently remind people that half of the reason I was able to FIRE is because I have a survivor pension. The other half was because of my own lifetime savings. That discussion quickly disappears.

 

[donheff]

Oldbabe, it sounds like your close friend may not become a significant financial or emotional drain on you since she is handling things OK and makes no demands. Maybe SS and a constrained lifestyle will enable her to survive. This is someone you really care for so why not try to let go of your concerns and just remain a friend. If things go downhill you can make clear early on that you are not a financial backstop. My SIL has a very close friend who is in bad shape like you describe (worse since she worked off the books and earned no SS). SIL has remained close to the friend but has also made clear that she can't afford to support her.

No question that this is a tough situation.

 

[travelover]

.......... For the most part the planners and savers think the others are irresponsible and have caused the distance by their poor decisions and occasional requests for unrealistic assistance. For the most part the nonsavers think they have had difficulties in life that were not their fault and blame the savers for the rifts because of their unwillingness to share the good fortune or even acknowledge the lucky advantages they benefited from......... .

+1 I have relatives whose idea of thrift is growing their own marijuana

 

[kumquat]

There can be two sides to this.

One friend made a lot of money and spent it all. While he wasn't in debt, he had no savings either. He told me that he enjoyed working, enjoyed spending and intended to work until he died. He did, he died a few month ago at 53. He didn't end up the richest man in the graveyard, but his kids will do well on the insurance payout (at least he planned for his possible demise).

 

[Walt34]

Does anyone else have this problem? And how do you deal with it? I can imagine that this sort of thing would be even more difficult with family members.

Not so much with friends, all of whom seem to be doing fine financially, but with family, some of whom I see heading for a financial train wreck.

DW's siblings are married to people who have consistently lived beyond their means and are just now realizing that perhaps they should put the brakes on spending. Not that they're actually doing so, mind you, but the reality is in the "early dawn" stage. And unless they plan to work for another 20+ years they're out of time.

One BIL's "plan" to fund his retirement health insurance is the 1/4 of FIL's estate he expects/hopes to receive. This is the same guy who last year spent the bucks for two weeks on a Mediterranean vacation and the year before "limited" his daughter's wedding expenses to $20k. He will get a pension though. All of about $600 a month.

DW and I spend that much at the grocery store!

And don't get me started on the other "Spendarina"....

DW and I are also regarded as being somewhat boring and dull by the same folks.

Three or five years from now I will have little sympathy for the cries of "poor me!" emanating from that direction.

 

[FinanceDude]

As far as a bail out for friends, I learned my lesson several years ago. I only got stuck for $400, TG, but the Bank of Freebird is forever closed.

Darn, there goes my venture capital I need to set up my business towing icebergs from the Arctic Circle and selling the water to Las Vegas...........

 

[antmary]

We have relatives and friends who are in similar situations. It is hard for me to hear their desperate stories. I find comparing myself to those who are in the lifeboats, hovering above those who are stuck in the cold water - a scene from the movie, "Titanic." I do want to see myself as generous and kind.

One person doesn't want to come over because he seems to compare our paid-for home to his circumstances.

But, I get much joy being around the free spirits (artists, healing arts therapists, etc.)! However, I can sense a simmering resentment toward us, especially when they once more have to move to cheaper digs. Come to think of it, maybe they don't have a lot to offer to a friendship.

The answer, it seems, is to create some healthy clear boundaries. "No, we don't want to live with you. Yes, we will offer you a meal if you are hungry. Yes, help yourself to the tomatoes in the garden. We can even have a canning party. Here is the phone number to the local food bank...But, know that I did not have anything to do with your unfortunate circumstances, and no, we can't afford to (nor do we want to) bail you out."

Unfortunately, as the metaphorical credit tide recedes to the ocean, things are only going to get worse in the coming years, as the bills come due.

 

[MasterBlaster]

I haven't read the whole thread.

But my reaction is that this is the baby boomers in a nutshell. There are millions and millions of people in this debt/no savings situation.

I suspect that in the end, they will get something, and the rest of us will just have to pay more.

that's the way it is going to come down.

 

[Major Tom]

The answer, it seems, is to create some healthy clear boundaries. "No, we don't want to live with you. Yes, we will offer you a meal if you are hungry. Yes, help yourself to the tomatoes in the garden. We can even have a canning party. Here is the phone number to the local food bank...But, know that I did not have anything to do with your unfortunate circumstances, and no, we can't afford to (nor do we want to) bail you out."

Tough love, and I agree 100%.

 

[martyb]

Darn, there goes my venture capital I need to set up my business towing icebergs from the Arctic Circle and selling the water to Las Vegas...........

 

[lucija]

I don't know how to deal with my friends. I have friends who didn't save for retirement who are one bad event away from destitution. One friend in particular barely keeps afloat with her employment but constantly needs cash infusions from relatives, has a stack of credit card bills, and always says she wants to go with me on this vacation or that trip even though she can't afford it. It's all wishful thinking. Boy, she wears me out just thinking about her.

Another friend has serious health problems but just cashed out a IRA to do house improvements, lives on credit cards, has no retirement savings, just a very small pension.

When I offer advice it is typically rejected for one reason or another, so I don't offer it anymore. I try to avoid any conversation that appears to lead in the direction of finances. But that causes some stress for me, as I have to monitor myself, avoid talking about certain things, etc.

Unfortunately, these are long time friends that I would have difficulty saying goodbye to. So, I guess I am just going to have to limit my involvement with them. It's sad. Does anyone else have this problem? And how do you deal with it? I can imagine that this sort of thing would be even more difficult with family members.

Oldbabe... My outlook on life mirrors yours in many ways and I hate to say this - I think you're creating a problem here!

Personally, it would never cross my mind to distance myself from a friend solely based on different financial choices. I understand your concern and your desire to help them get on better financial footing. However, (1) your friends are not asking for advice, (2) your friends are not hitting you up for money, nor are they treating you like an ATM. Can you accept them as they are and focus on all other things that made them your friends in the first place? Live and let live. Alternatively, ask yourself, would you like if they kept on approaching you and questioning your life choices?

Now, if you had other problems are like Loop Lawyer - that's a whole different story. Like Loop Lawyer, I have have been treated like a bank (but unlike bank, I was expected to extend loans with no need for repayment). At some point, I said "no" (which opened flood gates to all kinds of insults) and which, inevitably, put us on the road to estrangement. Like Loop Lawyer, I think the reason #2 is the real killer.

..snip...
The consequence of their decisions to live irresponsible lives has been a very high degree of estrangement. The specific causes of the estrangement are two: (1) actual requests for money, which I have come to refuse due to bad experiences early on; and (2) anticipated requests for money, which I simply don't want to hear. I find that the second is more upsetting than the first, and this has caused me to cut off contact for the most part. I wish I could figure out how to manage this better, but I can't. Who wants to socialize with a Financial Pig Pen? Not I.

 

[Sarah in SC]

+1 I have relatives whose idea of thrift is growing their own marijuana

I think I know some of those folks, too!

 

[haha]

In 3 generations of my extended family, I don't believe any of us has ever encountered this issue with family. Friends, I would not know except in my own case, and it has never happened to me.

My kids are either reasonably controlled spenders, or very skilled at careers in demand, so I have never been asked for anything. They might think that my checks would bounce anyway. One son had a big spender wife, which he really didn't mind as much as her failure to earn. He divorced her, and the settlement will likely be her ER if she husbands it.

There were huge disparities in wealth and lifestyle between my father's family and my mother's. I suppose that might have created tensions, but I was too young to sense these things.

If asked by family and they needed it for temporary things, I would create conditions- go apply for welfare, disability, a job, etc, and I will help you temporarily, as my resources are very limited.

I would imagine that hearing this, most people would try elsewhere, but some might do what I suggested. I would help them, but only if they ceded a certain amount of control to me.

As far as wondering about how my friends will do in the long term, I mostly don't. People often have all kinds of resources that they are not telling you about, just as you have resources that you are not telling them about.

Several years ago I did cut off a relationship when I figured out that the woman was likely to wind up in trouble. It would be close to impossible to be in love or deepy attached and turn someone down, so I am have been more attracted to people who are likely OK, though this information is not easy to come by in many cases.

I don't like our selfish culture, but I am part of it so I might as well not try to change things unilaterally.

As frequent world traverlers, many of you no doubt know that the US is an outlier in how little resposibility is assumed for other that one's own minor children. Elsewhere, especially in non-western cultures, family and community have much stronger moral claim on more successful members.

Ha