Proactive Parent Protection
Posted on July 03, 2006 by Her and tagged afford, family
My parents have been planning to drive out to visit us this summer. Over the phone, my mom admitted that she was planning to pay for their trip by maxing out their home equity loan. This is a bad idea for several reasons - they are close to retirement and should be aiming for zero debt, and often a HELOC is the last line of credit available to you in an emergency and it should be reserved only for emergency use. I was dismayed by this news, and told my mom that a better choice would be to save up for a trip until they could afford it. But she wouldn't listen.
At the same time, I recently realized that in order to take time off during their visit, I would need to take some unpaid days off from work. This doesn't align with our goals of aggressively paying off debt and saving up for our wedding. I realized that this trip was going to be a bad financial decision for my entire family, so I sat down and talked to Him about it.
Him had a great idea! He suggested we cancel their visit, and offer to visit my parents during Thanksgiving instead, when we already have time off from work. At the same time, we can accrue some air miles toward our Honeymoon. It's a better solution for everyone. I pitched the idea to my parents today, not mentioning my opinion of their loan idea, so they would feel as though they were doing us a big favor and wouldn't be embarassed by their financial situation. They thought it was a great idea! My mom even confessed that she was worried the cost of the trip would "sink" them, but she didn't want to cancel it and break my heart. She was so relieved when I suggested we re-schedule.
It just goes to show how tightly money and emotions are bound up. Sometimes parents are willing to quietly put themselves in financial jeopardy for the sake of their children. Therefore, it's important for children to recognize when parents are over-extending themselves and be proactive about protecting them.
Comments/Trackbacks
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Alberen | Jul 5, 2006
Oooh, this does make me sad. It makes me sad because I too have a mom who has been living the same broke down, buy too much, have no clue where she is financially life that she lived as I was growing up.
If they are that close to "sinking" please start talking to them. I think it's Money Magazine over the last month or two that has a good article about talking to your parents about money (in the article about preserving wealth but the approach would be the same.) This is the page to start on...http://money.cnn.com/magazines/moneymag/familymoney/
Besides my theory is-- "If you stop adding debt then each debt payment is savings deposit." (and often with great guaranteed returns!)
Glen | Jul 5, 2006
Just found your website. That is a lot of debt! Hang in there.
The wife and I started with $0 assets and $197K liabilities about 6 years ago (mostly student loans, but credit cards and personal loans too). Now up to around $130K of assets and down to around $100K of debt (all student loans).
Most of the loans are consolidated at 4.75%, which is not too bad. The rest are at 7.25%, so we are trying to pay those off first. It can be done, but the road is long and the sacrifices will be many.
Young Finance Guy | Jul 6, 2006
Very thoughtful on your part. Sometimes us young people need to help our parents with their financial situation. I really enjoy your blog.
I'm glad it worked out for you. Great idea of not mentioning their finances but talking about the benefits to you. It is real easy to get embarrassed when discussing finances if your not in the best shape.
delisfar | Jul 11, 2006
I don't know how your mom's pride is, or how far she would have to drive, but would it not be less expensive to take the money you're planning to spend on airfare and just pay for her car trip? I would think an airline ticket costs more than gas/oil/maintenance for a car. (Admittedly, this does not factor in your unpaid time off from work).
Visiting your parents instead is a great idea, especially when you can also save up those frequent flyer miles.
My situation is a bit different. My mother has a track record of a lifetime of bad financial decisions due to mental illness and uses her children (us) as the excuse of why she has done what she had done. Every bad decision she's made she said it was because she was trying to make our family's situation better.
It took years before I developed a healthier relationship with money.
Kira | Jul 3, 2006
It is sad sometimes how we can't really communicate with our parents (and other close people) and how much easier it would be if we were all honest.. I'm glad you worked it out so it benefits all of you though.
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