When the expected happens it's not a surprise

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CO-guy

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I have a family member that has always been terrible with money. No matter how much she earns, she'll spend more. Any windfalls are spent quickly as debt accumulates. In the past 25 years she's gone through bankruptcy twice.

She's currently in her early-70s, in poor health, but is one of those people that tells everyone how they can't imagine retiring because they love what they do so much. Among closer family her stated motive has been to build back her IRA, which seemed like a more honest reason to be spending 60+ hours a week at the office at her age.

However, she was recently let go and, to nobody's surprise, it turns out she's broke. No IRA, no savings, and some additional debt. With nobody willing to lend her money, I'm wondering if she'll finally learn to live within her means now that her only means is social security.
 
Hopefully she can afford to live wherever she does. The ideal would be if she had a paid for Home or Condo with low taxes and upkeep.
 
"July is follow'd by December"
 
Teacher Terry said:
Hopefully she can afford to live wherever she does. The ideal would be if she had a paid for Home or Condo with low taxes and upkeep.
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She purchased a townhome in a 55+ community a few years ago. Shortly after, she received a sizable inheritance. Enough to pay off her mortgage, which is what her children pleaded with her to do. She declined, insisting to instead max out her IRA contributions for those next two years along with paying down her mortgage. In the end she did neither and that inheritance money is gone.

She doesn't even live an extravagant lifestyle, but manages to spend thousands of dollars a month on things like UberEats and beauty products.
 
I feel sorry for someone like this and most of us have/know someone like this. Is this like an alcoholic? I think this is my last year helping out people that can't be helped. My mind is saying "I have the money why not help" now I'm realizing it's always something they need money for.
 
I dated someone seriously for a while and our attitudes towards money were the complete opposite. I saved my money while he wanted to spend everything that hit his savings/checking account. When I told him to save the money, he said that was what the retirement account was for. We both made about the same amount of money, and while we ate out alot and spent alot as a result, he loved to buy "stuff" while I didn't.
 
splitwdw said:
I feel sorry for someone like this and most of us have/know someone like this. Is this like an alcoholic? I think this is my last year helping out people that can't be helped. My mind is saying "I have the money why not help" now I'm realizing it's always something they need money for.
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It's not drugs or alcohol. Rather, she's just a compulsive spender. Her spending style is to hemorrhage money. Any available credit she has is maxed out with outrageous interest rates (28-30%) because her credit is awful.

It's been many years since I've seen her in person, but every purchase is still justified as essential. Her adult children have learned to keep their financial distance, but the realities of her situation have become much more apparent.
 
marko said:
As always, the first step is to admit that YOU have a problem. Until then, all the help, advice and intervention in the world is a waste of time and money.
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I didn't see anything from the OP indicating that was the case.
But I agree with you...
 
CO-guy said:
I have a family member that has always been terrible with money. No matter how much she earns, she'll spend more. Any windfalls are spent quickly as debt accumulates. In the past 25 years she's gone through bankruptcy twice.

She's currently in her early-70s, in poor health, but is one of those people that tells everyone how they can't imagine retiring because they love what they do so much. Among closer family her stated motive has been to build back her IRA, which seemed like a more honest reason to be spending 60+ hours a week at the office at her age.

However, she was recently let go and, to nobody's surprise, it turns out she's broke. No IRA, no savings, and some additional debt. With nobody willing to lend her money, I'm wondering if she'll finally learn to live within her means now that her only means is social security.
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Some people can’t be helped. Or saved from themselves.
 
CO-guy said:
It's not drugs or alcohol. Rather, she's just a compulsive spender. Her spending style is to hemorrhage money. Any available credit she has is maxed out with outrageous interest rates (28-30%) because her credit is awful.

It's been many years since I've seen her in person, but every purchase is still justified as essential. Her adult children have learned to keep their financial distance, but the realities of her situation have become much more apparent.
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Sad to hear. I know the story well, my sister was like that.

Lie about her spending, lie about her savings, lie about her credit card debt saying she owed $100 when she really owed $5,000.

Buy incredibly dumb things, like buying 2 lbs of gummy bears online where the cost was $54 including delivery. - They were plain gummy bears worth maybe $6.

Paying the credit card company a monthly fee (~1% of debt) so that if she died her CC debt would be forgiven. - A waste as she carried $5,000 debt so $600/yr went to that, when the reality was after death the CC was getting nothing as there was no money.
 
When I first met DW, she said she "didn't like money." I originally thought that statement generally meant that money is pretty much limited for most and that in life money can limit or prohibit people from having access to different things. (I thought she meant in a general sense how we're not always afforded the same financial opportunities, etc.)

I learned that "not liking money" meant not liking tracking money and/or accounting for where it goes/went and not planning for the future.

I also learned that (observed) it meant giving one's self a pass to only deal with present-day with money. Sadly, I view my wife's entire paycheck like it's disposable income because she treats her paycheck like it's disposable income. She very little EF or retirement savings, doesn't contribute to household bills, but enjoys Starbucks, restaurants, and a work rental (she works three hours away). We tried to budget together but she always drifts out of tracking and saving, and I grew tired of asking. Late last year, her debit card went to Discover which isn't accepted everywhere (was formerly MC) and she's started putting all her purchases on her Citi Visa, instead. We each have our own Citi card but the purchases go to the same account so I can't help but see her spending. She clearly has no issue rolling a balance over from one month to another while I try to pay the balance in full a couple of times a month.

Working until she wasn't able and relying on her pension was her plan. I've chosen to let her live her dream while I continue to live mine (RE).

Sometimes we just have to let them.
 
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hmrambling said:
Working until she wasn't able and relying on her pension was her plan. I've chosen to let her live her dream while I continue to live mine (RE).

Sometimes we just have to let them.
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But how will that work out over the long run? My Ex was like that- spent everything he made and maxed out his credit cards since any credit limit left was money he could spend. We kept our accounts separate other than the jointly-held house and mortgage but if the house needed a new roof or the water heater died, I was the "emergency fund". This is one of many reasons I divorced him. What do you do when they retire with nothing? The marginal cost of keeping them in the house may be low but they can have unreimbursed medical expenses, need a dental implant or two, need to replace a car... and the really scary scenario is that they need LTC and Medicaid won't pick up the bill till you spend down your assets to $100K-$130K depending on the state.

I've got a dear friend who fits the description in the OP. Age 74, liquidated his 401(k) after he resigned form the bar (criminal defense lawyer, burnout) and went to London for a year to study Spanish legal translation. Well, at least he was over 59 1/2. He worked for a government contactor answering calls from Medicare beneficiaries. He loved that job- and it disappeared in February. Then his car died. He's never tried to make his financial problems my problems (wouldn't have worked) but after a lot of pondering I offered him $20K to buy another car. He was profoundly grateful. He still hasn't found another job. He seems to have cut back his bad Amazon-buying habit but it's too little, too late.
 
mystang52 said:
I think the "you" was figurative, not directed at the OP.
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Yes. Maybe I should have used "...admit that ONE has a problem..." with "one" being the one who needs help.
 
Life finds a way. She will learn to live on SS as long as she can afford to pay for mortgage.
 
pjigar said:
Life finds a way. She will learn to live on SS as long as she can afford to pay for mortgage.
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Folks like this always seem to stumble through life regardless and, end up successful on their own terms.

Not everyone shares the same values. Not everyone prioritizes having the bills paid, a clean house and the kids bathed and in bed by 7:30. For some, its just not that important.

In a way, we need people like this to provide a certain triangulation to help orient our own lives.
 
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My new GF's deceased husband was like many examples as stated above (big spender, maxed out cards, no retirement savings, etc). Good thing he died from a unhealthy lifestyle before the walls came crashing in. His rich son kept them afloat (for years). GF is OK financially as she has SS, husband's military disability pension, her private pension, and some savings, She was glad to see that I am not at all like him when it comes to spending. She has mentioned to me many times that she could not change her husband's poor money management over the course of their marriage and it kept her stressed out.
 
Thanks for all the responses. I'm not sure if it's reassuring or concerning that everyone knows someone like this. She's been like this as long as I've known her and thinking about it reminded me of some small examples of how she continuously hemorrhages money.
  • It's been many years since I've seen her in person, but she's the person who spends $50 on a salad at Applebees (2x shrimp and 2x bacon on top, side orders of avocado, extra tomato, rice, etc.). She does this every time. She always complains about the bill.
  • She's the person at the check-in desk at the airport with over-weight checked bags, an oversized and overweight roll-aboard, a giant backpack and a computer bag arguing with the agent about needing to check a carry-on along with outrageous luggage fees. She travels often. She complains about this every time.
  • Last year she went on a cruise with one of her children. He was concerned about her finances but she was able to find an itinerary that was under $2000 for them both. He then contributed to the trip by using points to purchase their flights. With all meals included, the expenses seemed modest. However, she skipped the shore excursions each day and racked up several thousand dollars in bills just at the onboard spa. She spent hundreds more at the onboard Starbucks and elsewhere on the ship. Her son didn't realize until the bill popped up on the TV in their room near the end of the cruise and by then her card had been declined.
Then there's the never-ending parking tickets, speeding tickets, late fees and fines, outrageous insurance fees because of all the tickets........... everything in her life is handled in the costliest way possible.
 
It must be pretty stressful to be around her and watch her self-destruct.

In some ways my friends are like that, this is the couple whom I had mentioned in other posts that they are running out of money. They do live in a $2M home (with a $330K mortgage) due to significant price appreciation, but their savings are below $500K now. The difference is that our friends don't complain about the bills, they just pay them. They both consistently order the most expensive items on the menu and he must have his 2 glasses of Proseco or Savignon Blanc for lunch. We have no issue in subsidizing them when we split the bills, because it does not move the needle. They don't do that simply because we split the bill, but that is how they eat. She "MUST" have her lobster just kills me because they just spend on whatever they want. As much as I do like lobster, I don't order them because they are expensive. They would also mail order lobsters, fish and shrimps, because they are better than what you can get at the store. Fortunate for them, they will have a way out of their situation when they take cash out of their home to continue to support their lifestye.
 
It easy to stress over this behavior more than the ones that are actually misbehaving. As another posted these folks seem to stumble there way through life somehow. I hate most forms of debt hanging over my head and need a few dollars in the bank to sleep well but it doesn't bother some folks one bit.
 
sengsational said:
Well, SOMEBODY has to carry a balance on their credit cards or we wouldn't get all the points ;)
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I know. I feel a bit guilty about that but I still pay in full every month.

jazz4cash said:
It easy to stress over this behavior more than the ones that are actually misbehaving.
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Oh, I know. I was always stressed out over my first husband's unpaid bills and he happily let me clean up his messes. I finally stopped and let all the credit cards in his name go into default (they were paid out of his share of the equity in the house after the divorce) but I should have stopped earlier.

Never again.
 
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