Advice: “My parents are treating me like their retirement fund. What should I do?”

This is something I have written about a bit before.

It is under control now and we are back on good terms, but here are some of my earlier posts:

• Y0ur children are not investments
• Filial Piety 101: How giving back works
• How money became a problem in my family

I am starting to hear from various friends that similar things are happening.

We are all getting to the age now where our parents are nearing or already in retirement, and it is starting to become startlingly clear that our parents did not know everything, and in many cases, have little to nothing saved and/or are in serious debt themselves, despite appearances.

A recent story came up at work with a colleague who just let everything spill.

He is so stressed about the situation and I was there to listen, that he started asking for my opinion because he needed advice on what to do.

The Context

You need to have a context of the history and what is going on to really be able to hear what is going on.

I’ve gathered this info over our conversations and with his permission to talk about it (I didn’t mention the blog because I’m Anonymous), but I said I had a lot of friends who had similar situations and were money-savvy (this is where you come in, readers), and could offer some perspective or insight that we may have missed.

I have my thoughts below.

Before I continue, I need you know that I believe this:

THERE IS NO RIGHT OR WRONG.

I am trying very hard not to judge anyone or to praise anyone for whatever. I just want to try and state the facts. These people are NOT bad people in any way, they are just unaware of their situation.

Obviously I am biased. You will read that, but I am trying not to be.

People in general, as I well know, are not great with their money, no matter their age, their gender, their income.

That does not make them bad people. What people earn and spend has ZERO reflections how good of a person they are.

I sucked at saving and loooooved to spend. Does that make me a bad person?

No.

I just didn’t know any better. I didn’t learn anything about my money and it wasn’t until I did that I realized what I was doing wrong.

Zero reflection on who I am,

People SUCK at saving money because it doesn’t feel good to deprive yourself in this society where we are all about the FOMO and YOLO, and treating yourself.

Look at me — I bought a super expensive car because I wanted it. I didn’t need it, I wanted it.

I know this better than anyone, and continually struggle with my inner spending demon who wants to buy EVERYTHING.

• I feel like I am going to be a failure again
• YOLO, FOMO and all the reasons you and I overspend
• Almost Rich: Making $160,000 – $200,000 a year and barely making it

*FOMO – Fear of Missing Out and YOLO – You only live once

So. Not judging. Trying to lay out the situation although I have only heard it from one side (he is pretty fair though).

The Monthly Contributions

So, his wife’s in-laws are not frugal at all. His parents are super frugal. We’re talking spit-shined their cars for 20 years, careful with everything they own, and have spent as little as possible (under $1500 a month) for the both of them, living in an expensive city.

He gives his parents $500 a month.

He used to give less, about $200 a month, but when he got married, he was so surprised that his wife was regularly giving $800 to her parents, that when they joined finances, he said it wasn’t fair to treat one set differently from the other.

The wife argued that her parents NEEDED that money, at least $800 a month, but then conceded to drop it to $700 a month, while he upped his contribution to his parents to $500 a month from $200.

It still didn’t sound that fair to me, but they seemed okay with the situation.

His parents have taken that $500 a month, and set it aside, with the intention of giving it back to him when he needed it — to start a family, to buy a home, if he ever got into trouble.

They sat on that money, and have over the years, managed to accumulate $60,000 from just that money alone plus their own savings. They literally don’t touch a dime.

He has asked them to spend it on themselves, and only in recent years, have they started taking a trip here and there, to use up the money on luxuries — but old habits die hard, and they can’t bring themselves to be so “wasteful”.

On the other side, his in-laws, have taken that money from his wife at $700 a month, and are requiring it to live. They actually call her each time she is “late” on giving them money, and asks her to transfer it ASAP because they need it.

This, makes him uncomfortable, but his wife sees it as — oh but they REALLY need the money or else they can’t do X Y and Z, so she transfers the money and continually brings up how she needs to be giving more money to help them out.

The Assets Situations

His parents and hers, have their houses paid off completely.

The difference as I gathered, was that his parents bought in a cheap part of town, and saved frugally their entire lives raising their kids, to be able to clear the mortgage well before retirement.

Her parents, got lucky, because the grandparents when they passed, left an inheritance that was enough to clear outstanding credit card debts AND clear the mortgage on their house in a very chic area of town.

So, two different situations, bottom line is both parents have their houses are paid.

Both parents have cars, and his parents have had their car for about 7 years and it looks brand new because they REALLY take care of their things.

Her parents, have TWO cars, and have insisted that they need both (they live in cities that are very metro-friendly and in fact, they don’t even need a car to be honest, unlike in rural areas).

They said the second car was a “family car” because his wife or her sister would probably need to borrow it, so it isn’t THEIR car.

The Working Situations

His parents are retired. Hers are not.

His parents retired as factory workers and don’t even need the car they have to get to work, but they have one and take care of it because they use it during the winter, and it is handy for groceries as they are getting older.

Her parents, are still working, but as I gathered, his mother stopped working 2 years after she graduated, to stay at home and raise the kids. His father owns a small repair shop business, and works part-time from what he can tell. He isn’t good at following up on invoicing either.

As a fellow freelancer, I can tell you that freelancers no matter what they earn, are THE WORST at handling their money. It is worse than someone who is an employee because we have to personally chase down our invoices to get paid and we have to get over ourselves and actually ask to be paid, plus hustle for contracts.

Employees, don’t have to worry about getting someone to clear their bill, and will always have work waiting for them along with a steady paycheque. I’ve written a bit about this:

• How to become a freelancer
• Negotiation: Employee versus Entrepreneur
• Inside a freelancer’s brain for budgeting

From what he can gather (he has tried to give them privacy and not pry or “judge” or “criticize”), they have only worked part-time, if that.

Even now, in their 60s, her parents work part-time. Her mother has mentioned a number of times things like:

Oh it is too stressful to work full-time. I don’t have time for that.

..when his wife has tried to get her a full-time, super well paying job.

In essence, she comes up with excuses to NOT work full-time.

She has hobbies, she has the two kids (wife and sister) to still “take care of”, and she has to make sure they are happy, etc.

(They are fully grown with jobs and families by the way)

Her whole life revolves around her family, and this means she cannot go back to work full-time.

The father, as I mentioned before, is an entrepreneur but based on him not collecting on his invoices, it sounds like it is just a hobby. It barely pays the bills.

The Spending Situations

His parents, have only recently started using the money he has given them, to go on vacations.

Each time he has mentioned it when his in-laws ask (he has since stopped), his in-laws snort, and say things like:

Oh they’re going on ANOTHER vacation AGAIN?

..when he knows full well that they are using the savings he gave them, and his in-laws, actually go on two major vacations a year that he and his wife (and the other kids) pay the majority of.

He feels like the in-laws think that he is treating his parents better than his wife is treating hers, and they feel slighted.

So they use that to guilt trip his wife into giving more money, or trying to give splashy gifts or vacations to make up for his parents going on vacation so often without knowing the full situation.

Last Christmas, his wife actually gifted $4000 in a full expense paid cruise trip to his in-laws WITHOUT TELLING HIM.

He pretty much hit the roof.

She just bought this gift out of the blue and presented it to his in-laws without consulting him, and it wasn’t until she talked to him, and they agreed to back it down from that amount or consider it a gift for the next two years.

I don’t know what they worked out (I had so much more to ask), but that was the beginning of this whole stressful situation for him when he realized things were getting out of control.

His wife goes with his sister to have ‘family meetings’ to talk the budget and to handle the money situation but from what he gathers they have not made any progress or changed in the past 5 years. They still call his wife for money when she is “late” on payments.

Her parents also think that they are frugal because they cite things like: We don’t live in a huge house (they live in a very nice area but the house is not a McMansion), and we don’t drive fancy cars, or go on vacations every other month. We are modest, frugal people!”

And yet, they work part-time, but still go on vacations twice a year (abroad, not just to another city), and rely heavily on their kids who are earning good salaries, to pay for them.

Why this is all coming to a head

It was already an issue before, and he has tried to very respectfully not step in because he doesn’t want a family rift or to criticize or tell them what to do.

He even feels a bit of shame / guilt and asked me if it was justified to feel a bit outraged to which from personal experience, I nodded in agreement because my parents are similar but I am in touch with the reality and straightened out that mess 2 years ago.

Why it is all happening is because their lives are starting and her parents are starting to increase their demands on his and his wife’s money.

See, he and his wife finally found and purchased a $1 million dollar semi-detached. It isn’t as fancy as you think, where they live, this is a standard price, and it is smaller than if they were to buy here where I live.

His parents, offered to give back the money they had saved from his contributions. He refused. He wanted them to have it and to use it on themselves. They grumbled but kept the money.

Her parents, see it as that they are doing VERY well and are happy they make so much money!!!!

(Catch-22, in my opinion.)

At any rate, the mortgage is $800,000 and about $4000 a month. He thinks this is a good investment (ugh investment in houses, don’t get me started), to get his wife to start saving for a purpose.

She had been giving all this money and gifting her parents things because she really felt like there was no point in earning and saving all this money if she couldn’t help them out after all they have sacrificed for them (honestly, this might be a bit of a rose-coloured glasses situation because she doesn’t see that they haven’t actually worked full-time their whole lives and got lucky from inheritances, and now seemingly relying on them to cover their bills and part-time lifestyle).

Now, he wants to have a sit with his wife, go through the budget and lay out the case for why they have to start turning the money tap off to a trickle instead of a drain, and to get her to see that her parents need to step up their income game and/or manage their budget so that they spend LESS and do LESS as expensive hobbies so they can live.. well.. within their means.

To be fair, he has even mentioned how his wife has given BACK the money her parents gave her for school, as well. And she feels like she owes them a lot for working so hard (part of it, is her mother constantly saying that she works so hard and is so tired all the time).

Her parents paid for her and her sister to go to school but his wife was on a full-ride scholarship, and on top of that, gave back the money she did use.

But…

He feels as though they are stealing from their future

He feels as though his in-laws don’t see anything wrong with this, are in denial about their income, their spending, their lack of budgeting, and isn’t even sure they have anything saved (I highly doubt they have anything saved).

His in-laws even refuse to entertain the idea of selling their home IN CASE ANYTHING HAPPENS.

His in-laws seem very adamant that they live this life, and that their kids are meant to pay  for it, but as a direct result, he has to try and delicately figure out how to manage this situation to extricate themselves from being their piggy banks forever, considering that they are still very young and are able to work at their jobs which are really not strenuous or back breaking, plus, they can make serious money at as their skills are high in demand, but they just seem to have gotten complacent and don’t see why they need to work.

They see that they have “worked” their whole lives, and complain that they will “work until they die”, but then refuse to take on full-time work, and/or cut back to live on just what they make.

A lot of it, his wife has admitted, is her fault.

She has helped them get to this point by giving money, increasing the money, and paying for things to “help out” but instead of helping them out, she seems to be making it worse.

She just finds it easier to give them the money (considering she can afford it, she says), than to deal with the situation and make them start tracking their money, budgeting, and then pushing them into working full-time, cutting back on hobbies and leisure.

On top of that, his in-laws have started mentioning about how their second car is about to die (yes, they work part-time and yet need 2 cars because their kids MAY borrow it one day, so it is a FAMILY car), and have started very strongly hinting about how his wife has to pony up money to buy a new car for them.

This is where the catch-22 comes in — I’m having purchased such an expensive home, they are assuming they are very well off… so what’s a few more tens of thousands for a second car for them?

They’re seeing the benefit of having well-off kids but not necessarily the work and sacrifice that goes into those savings — they just have no clue, they’ve never done it themselves as their home and debts were cleared by inheritances, not by earned coin.

I should also mention that he says they are not good at taking care of their things.

They drive like crazy, don’t take care of their cars or anything they own, and recently renovated their kitchen, and decided they needed granite countertops and fancy fixtures.

They ended up taking out a line of credit against their home to renovate it as an investment in the home (they said), and then needled his wife and her sister into paying into this line of credit because they promised they would help.

(They did promise they’d help but didn’t realize they would spend so much upgrading everything to luxury materials that would triple the budget).

He was furious at the time, but couldn’t do anything because his wife DID promise but didn’t realize it would be $10,000 out of the bank account. He has sort of let it go, but can’t let it go because it never stops.

This is stressful AF.

So.. help? Advice? Have you had similar situations? What happened?