What responsibility do you have to take care of financially irresponsible parents in their old age?
This is a question I get quite often. I believe that you honor your mother and father. But this doesn’t mean you do so at your own financial peril.
During a recent online discussion, one reader wrote: “My mother is a financial disaster. She doesn’t like working and has struggled to hold anything other than minimum-wage, part-time jobs but loves spending money on shoes, jewelry, restaurants and gifts. My siblings and I warn each other when she asks for money to cover car repairs, insurance bills, or whatever other crisis she can’t afford.”
The mom apparently has a long history of money mismanagement.
“As children, the utilities were regularly turned off and calls from creditors were frequent,” the reader added. “She would come home with a new pair of shoes while the phone and gas were disconnected. After our home was foreclosed on, she moved in with her mother, allowing her to keep spending while not working.”
Even a windfall didn’t solve the problem.
“Mom inherited a modest sum when Grandma passed. It wasn’t enough to retire comfortably but certainly more money than she’s ever had access to before. We tried to have a talk about putting the money aside and planning for the future, which resulted in her not talking to us for nearly a year. I have no idea how much she has left, but I know she’s been out to very nice restaurants regularly and have no reason to think she’d change her habits.”
If I may borrow from William Shakespeare’s “The Merchant of Venice,” the financial sins of this mother are to be laid upon the children.
“She seems to think that she’ll simply move in with one of us to be cared for. I’m not inclined to take her in. I can’t afford to support her. I’ve about turned myself inside-out trying to help her in the past. ... If we ask about budgeting and tightening the belt she gets nasty very quickly.”
So the reader’s conundrum: “How do we prepare and brace for when she inevitably runs out of money and shows up on our doorstep?”
Before I answer, consider these findings from the Employee Benefit Research Institute’s latest retirement confidence survey:
●Forty-seven percent of workers reported having less than $25,000 in household savings and investments, excluding the value of their primary home and any direct benefit plans.
●Fifty-seven percent said they weren’t confident they would have enough money to pay for long-term care if they needed it.
●Only 41 percent of workers surveyed said they and/or their spouse have tried to figure out how much they’ll need in retirement.
There are a lot of reasons people fail to save for retirement. Regardless of the reason your parent is a poor money manager, it may come down to you and your siblings to pick up the broken financial pieces.
In the case presented by this reader, I suggest a get-together with just the siblings. Think of it as the pre-intervention meeting. All the adult children should be clear about what they can or can’t do to assist. If you have sibling-rivalry issues to work out, try to set aside your quarrels — as best you can — before you meet with your parent or parents. You want your interaction with your parents to be respectful and calm. You want to stay on point.
You also want to present a united front. This is the time for siblings to lean on one another. Perhaps someone will be able to cover a utility bill, which, by the way, should be paid directly to the utility company. Maybe someone would be willing to take in the parent(s) if others helped out. Research living options if no one is willing to let them move in.
Once you’ve got a plan, set up the meeting. Pick a nonstressful time to have the discussion — meaning, don’t try to do this over a holiday. Be honest and upfront about what you can offer. If you’re an only child, all the more reason to have this type of meeting.
If you’ve been helping out with money, and the reality is that you’ll have to continue to do so, you have a right to ask about your parent’s finances. Make it a condition of your assistance. No budget, no information, no more bailouts. That’s the price your parent pays for his or her mismanagement.
Finally, remember that a fiscally reckless parent is still your parent. Budget for the help you can afford. But don’t let his or her financial sins be your burden. It’s not yours to carry.