Financial issues that test family connections

Michelle Singletary
Columnist September 10, 2013

When it comes to family and finances, mixing the two can get complicated and leave loved ones feeling abused.

During recent online discussions, readers asked me to weigh in on financial issues in dealing with family.

Michelle Singletary writes the nationally syndicated personal finance column, “The Color of Money.” View Archive

Q: I want to gift my car (old, but low miles and well-maintained) to my college-bound cousin. However, how can I let go of my biggest worry? Her triflin’ mother. My dad bought his mother a car, and who do we see riding it around town all the time? [It is the mother of the college-bound cousin.] I’m worried that the same thing will happen to this gift. I don’t think I’ll be as gracious as my father. Maybe I should just pay for books instead?

A: One thing you have to accept when giving any gift, large or small, is that once it has been presented, you can’t control its use.

Find out what your cousin needs help with the most — a car or books. If it really is a car, share your concerns and your desire to give an automobile that only she will use. You might want to hold on to the title if you are not sure she will abide by your wishes or if you’re concerned she may be pressured by her mother to allow her to use it. But I would require the cousin to get her own insurance.

If you find that your cousin’s mother is using the car, you can then take it back. But if all that is just too much, help with books. Hopefully your cousin will be grateful for whatever you give.

Q: My mom and sister helped me out with a car loan, and I have been making consistent payments for the last three years. I owe each of them approximately $900 at this point. Last year, I was in an accident and the medical bills have resulted in more than $5,000 in co-pays and deductibles. I also had a loss of pay for the six weeks after the major surgery I needed. I have arranged a payment plan for the medical bills.

My mother and sister have offered to help. But I would like to ask that they forgive the car debt instead of giving me money for the medical bills. I have mentioned how hard it has been to manage all of the bills, but they haven’t offered to drop the car payments. I get the impression that they think I am flaky for not fulfilling my obligation to them.

I really am frugal. We buy our clothes from yard sales, rarely eat out; our car is 13 years old, etc. I have one child at home going to community college who I support 100 percent financially.

Is there a diplomatic way to ask for a six-month break or to change the payment agreement for the car payment? I just feel totally overwhelmed.

A: Tell them just what you told me. Be upfront and honest. There isn’t anything wrong with asking that your loan terms be renegotiated or even forgiven because your financial circumstances have become more difficult. But you have to be prepared for the answer.

If they want you to pay the loans in full as you agreed, that’s what you should do. It could be that they weren’t going to give you as much for the medical debt as what you have left on the personal loans they made.

And consider this. If they want to help with the medical bills, that would be less money you have to pay out. And in turn you can take that savings and apply it to what you owe to your mother and sister.

Q: My sibling is 52, has two children and lives with my parents because he has been unemployed for five years. He resigned from his last position. He has a college degree and claims he is actively searching for work. My parents are elderly and financially providing for him by paying for his car, living expenses and child support. These expenses are definitely chipping away at their savings and lifestyle.

If he is unable to find a job and my parents both pass away, I am unable to financially support him. What are my obligations going forward? He cannot continue to live in their home after they pass because he’s unable to pay the taxes and utilities and unwilling to do any maintenance (lawn mowing, painting, cleaning gutters, etc.).

A: You are not your brother’s keeper in this situation.

I believe that to whom much is given, much is required. But this doesn’t mean you have to enable a financially irresponsible relative to mooch off you. You are under no obligation to take care of your brother in the manner to which he has become accustomed — as a freeloader.

Readers may write to Michelle Singletary at The Washington Post, 1150 15th St. NW, Washington, D.C. 20071 or singletarym@washpost.
com. Personal responses may not be possible, and comments or questions may be used in a future column, with the writer’s name, unless otherwise requested. To read previous Color of Money columns, go to postbusiness.com.

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