How to deal with financially irresponsible parent (SC)

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Latest post 07-29-2010 10:31 PM by Drew. 18 replies.
  • 06-24-2010 12:05 PM

    • qa lady
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    How to deal with financially irresponsible parent (SC)

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    Mom has a long history of poor money management.  About a year ago, she asked for our help getting control of her finances when she had no money to pay rent, her car was being repo’d, and she had about 15K in credit debt-mostly in collections.

     We brought her rent and car payments up-to-date, helped her develop a budget, and temporarily took over paying her bills/debts (with her paycheck).  In exchange, she agreed to let us monitor her spending and help her learn to manage her money and change her bad habits.  The goal was for her to eventually take charge of her finances again. 

     Mom did well for awhile, but unfortunately she is no longer fulfilling her end of the deal.  She has reverted to her old spending habits (if she has access to money, she will spend it), has overdrawn her checking acct 6 times so far this month, is lying about and hiding purchases and debts, and overall acting like a whiny teen with a bad attitude.

     Mom is competent, smart, and makes 60K/yr.  We know she can change her ways if she really wants to.  At this point we feel that we have done what we can and need to distance ourselves from her money problems in order to preserve our familial relationships with her.

     I am willing to basically turn everything back over to her and let her “fall” while we plan ahead with 2 other siblings about what to do when she hits bottom and loses her apt.  Hopefully she will really decide to change her ways, but if not, she’ll probably end up living with one of her children and paying them rent. However, my husband is having a very hard time going this route (it’s his mom), and we are hoping there are other avenues we can try before resorting to turning everything back over to her.

    What type of 3rd party would be able to take over working with her on day-to-day budgeting and spending? She also needs help with retirement planning.  Is a CFP, CPA or Daily Money Manager a good idea?  We aren’t sure who to turn to for help.

     

    Thanks in advance for any advice!

  • 06-24-2010 12:19 PM In reply to

    Re: How to deal with financially irresponsible parent (SC)

    You can lead a horse to water but you cannot make it drink. 

    You can manage Mom's money but you can't force her to change.  I would contact your local Consumer Credit Counseling Service and see if she will work with them.  Many times they will fight family but work with neutral strangers who have no emotional investment.

    One other thing to consider is having her medically evaluated.  Many times families compensate for the patient and don't realize in doing so they are overlooking that the person may not be able to manage their affairs anymore.  i.e. she may be in the early stages of Alzheimer's in which case one of the kids can be appointed her guardian and control her spending more strictly. 

    "That's just my opinion, then again I might be wrong."  Dennis Miller

     

  • 06-24-2010 12:46 PM In reply to

    • qa lady
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    Re: How to deal with financially irresponsible parent (SC)

    Thanks for the Consumer Credit Counseling Service idea.  I'll look into that.

    Mom's Dr. says she is healthy, no signs of Alzheimer's or anything. She's really very smart, has an insanely good memory.

    She has been this way with money since she was in her 20's.  She makes lots of small purchases and overdrafts her acct/bounces the checks.  She has gotten away with it because she has consistant income (so the bank always gets their fees) and she doesn't own anything (her car is worth about 3K) so companies write her off instead of paying to sue.  We can't dump her checking acct and just give her cash because she'll spend it all on things like magazines and cheap teeshirts.  We live in another state too, which makes it harder.

  • 06-24-2010 1:01 PM In reply to

    Re: How to deal with financially irresponsible parent (SC)

    I too recommend CCCS.  But as another post said "you can lead a horse to water..."  The CCCS will require her to be committed to it, and may mean lifestyle modification, and while she's at the office she'll have to get "honest" with herself, when she's writing down about her spending.  Good Luck.

    Ok  I'm not a lawyer.  This is only my opinion /suggestion.  Most Replys' are based on information provided by the "original post" (OP).

  • 06-24-2010 5:11 PM In reply to

    • Drew
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    Re: How to deal with financially irresponsible parent (SC)

    And do NOT waste water on a horse that won't properly drink!

    Sometime to do NOTHING is better answer?



  • 06-25-2010 12:38 PM In reply to

    • qa lady
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    Re: How to deal with financially irresponsible parent (SC)

    Thanks everyone.  We are gonna try consumer credit services and if that doesn't work we'll try it Drew's way.

  • 06-25-2010 5:43 PM In reply to

    Re: How to deal with financially irresponsible parent (SC)

    In addition, you might consider the possibility that there is an underlying issue such as obsessive-compulsive disorder going on, or that the act of acquiring small things here and there, daily, may be an indicator of a self-comforting mechanism - in which case even the best logic won't prevail if she is doing all of this buying to meet a deep-seeded emotional need. Often those who have feelings of powerlessness get small bursts of relief when they are able to excercise power over SOMETHING, and constant spending on small items is a frequent indicator of this dynamic. 

  • 06-25-2010 9:27 PM In reply to

    • qa lady
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    Re: How to deal with financially irresponsible parent (SC)

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    Thanks so much for your thoughtful input.  Sorry in advance this is so long...

    In the 90's she went through a major depression following a divorce.  She still gets depressed at times to a lesser degree and has been taking antidepressants for years.  She was evaluated for OCD a few years ago but they didn’t diagnose her as having it.

    She goes to doctors constantly - family physician, knee specialist (arthritis), gastroenterologist, eye doctor, etc., and some counselors (I don’t know if any were Psychologists/Psychiatrists).  She takes several Rx’s and a lot of OTC meds.  We have tried to go to her doctor with her to talk about side effects and potential drug interactions, but she won't do it.  She also refuses to take fewer OTC's.

    She hides things and lies constantly about everything.  Important or trivial, it doesn’t matter. 

    Although I’ve seen worse, her apartment is really messy.  She lays on her couch to watch TV and throws newspapers/bills/magazines/random papers on the floor/chairs/tables and leaves them for a week or so, but eventually gets a trash bag and sweeps the whole pile (bills included) into the trash.  She leaves dirty dishes on the kitchen counter (not the rest of the house) for 4-5 days and then washes everything at once but never put the dishes away.  She washes but never folds or hangs clothes.  She has a cat but rarely vacuums and never dusts so there is an enormous amount of cat hair (and some litter) everywhere.  She does clean the litter box every 2-3 days.  She generally will not let anyone in unless she "cleans up", meaning has enough time to trash all of the papers on the floor and wash her dishes.  I stayed at her house for 2 weeks about a year ago and together we cleaned/organized/bought some new furniture/hung pictures etc.  She seemed really proud and kept things up initially, but within a month she fell right back into her old habits.

    She is a very social person and I know she is lonely.  She doesn’t do anything during the week but go to work and lay around at home.  She sees her grandkids about every 2 weeks.  She loves talking to people and will talk a stranger’s ear off, but she refuses to plan to do things with friends or church. 

    Her spending doesn’t seem to fluctuate too much based on her mood.  Basically, if she’s got access to money, she spends it.

    Should we try to have her evaluated by Psychiatrist/Psychologist?  

    If yes, I’m concerned that she might not agree to allow us to go to an initial meeting with the Dr. to tell “our side of the story”.  What should we do if she says no?

    Please let me know if you have any other ideas.  Thanks again!

  • 06-25-2010 9:43 PM In reply to

    Re: How to deal with financially irresponsible parent (SC)

    "Should we try to have her evaluated by Psychiatrist/Psychologist?"

    Based upon the new information:  YES.  She is more than depressed.  You may need to take the step to call adult protective services where they can compel an evaluation through the courts if she refuses.

    "She is a very social person and I know she is lonely."

    There may be one other solution.  When someone in there older years is severely depressed and lonely often they lack the initiative to break the cycle.  It may be time to consider a retirement community.  If she moves into a new place that isn't associated with the old habits, has peers to socialize with, and activities to get involved with she may thrive.  Often they don't realize HOW lonely and isolated they are until they move into one of these communities and come to life again.

    "That's just my opinion, then again I might be wrong."  Dennis Miller

     

  • 06-26-2010 8:48 AM In reply to

    • qa lady
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    Re: How to deal with financially irresponsible parent (SC)

    She recently decided she's going to retire next year at 63.  She has not planned in advance at all, but fortunately she worked for USPS for over 30 years and will get pension, so that will help. We have been trying to get her to talk to a retirement counselor at USPS and let us help her with a retirement plan, but she won't do either for some reason. She says she only has to give USPS 3 months notice to retire.

    She also wants to drop her USPS healthcare when she retires because she thinks it is too expensive.  We have told her it is a lot cheaper than a comparable individual policy and offered to get quotes for her so she could compare them, but she isn't interested.  This is really scary because she has claimed over $33000 to insurance so far this year and takes some expensive brand name meds, so she would really be in trouble without USPS' healthcare.

    We mentioned retirement communities to her a few months ago and she seemed willing to at least consider it.  We just (finally) sold our has last month and will move closer to her by the end of the year.  We are  planning to start looking at some retirement communities with her then.  The cost of a nice place is prohibitive though and she won't be able to afford it if she continues to behave the way she does. 

    I guess we are just really frustrated because we are trying so hard to help her to no avail.  My husband and I sold our house at a huge loss mainly so we can move closer to her (we didn't tell her that), plus I want to be closer to my family.  We spend way more time than we should worrying about and discussing her situation, it's really becoming stressful.  His mom can be vindictive/holds grudges and seems to be focusing her frustration on me (the in-law), which I expected and understand, but since she has not changed her habits I don't want to keep going that direction.

    The reason I'm willing to just turn everything back over to her and let her fail is so that we will have a better shot at doing something permanent that will help her later (like living with one of her kids).  She isn't even trying to do her part anymore.  We cannot trust anything that she says or any promise she makes.  She has become almost completely unwilling to discuss meds, finances, Dr's, spending habits with us.  We cannot continue to make sure all of her needs are met and bail her out for the rest of her life while she does whatever she wants. 

    She has never had any trouble doing things she absolutely has to do or wants to do.  She always goes to work, never misses a Dr or Hair appt, keeps her car clean (b/c people see it), remembers everything we have ever said to her, her outward appearance (makeup/dress/hair) is fine, she communicates really well.  I'm worried we won't be able to "force" her to do anything through the courts because she does a lot of things that competent people do and doesn't outwardly seem out of control (except for her finances).  It would start a major family battle too, which we hope to avoid.

    We'll definately talk to her this weekend and see if we can convince her to meet with us and a Psyc and see what happens.  Maybe the thought of having her finances turned back over to her will help push her to try the psyc route first.

    Thanks again!

     

  • 06-26-2010 9:52 AM In reply to

    Re: How to deal with financially irresponsible parent (SC)

    OK, mom is one smart cookie and well just plain lazy.  I know this personality well as I just put my brother out of the house after taking care of him for two years.  Let me give you some advice on this:  DO NOT under any circumstances bail her out financially or let her move in with you.  Once you do ANY incentive to function as a reasonable adult will cease.  Been there, done that.  

    Tough love is one of the hardest things to do but in her case it may have to be done by all relatives.  An "intervention" of sorts may need to be done where it is explained that she has no plan for retirement, isn't eligible for Medicare for two more years, has no insurance, and is fiscally irresponsible.  That the family will NOT bail her out no matter how dire the circumstances and it is recommended she get financial and retirement counseling.  Then leave her be.  If she wants to spiral down the drain there is NOTHING you can do to stop her if she is competent.  Sometimes you have to let people weave the rope into a noose and hang themselves regardless of how much it hurts.

    Best of luck.

    "That's just my opinion, then again I might be wrong."  Dennis Miller

     

  • 06-26-2010 10:04 AM In reply to

    Re: How to deal with financially irresponsible parent (SC)

     "She makes lots of small purchases and overdrafts her acct/bounces the checks.  She has gotten away with it because she has consistant income (so the bank always gets their fees)"

    This will change.

    In the past, banks would automatically offer customers overdraft protection on debit cards and checking accounts, as you said, to rake in the fees.

    A new law will become effective in August (for current customers) that require the customer to actively opt in to this kind of service. If the customer does not opt in, then a debit card will be declined at the point of sale if the customer has no money in the checking account.

    I understand that this is only one aspect of a greater problem, but at least you will have that one change in banking law to help in the future.

  • 06-26-2010 10:08 AM In reply to

    Re: How to deal with financially irresponsible parent (SC)

    The USPS has lots of health plans available to her.  Your husband and she might want to go over her options next open season (generally November/December) to see if there is a more cost effective health plan for her. There is lots of info available at the Office of Personnel Mangement (OPM) website, www.opm.gov/fehb and it will get updated when the next open season rolls around..

    I definitely would not drop the employer health insurance at age 63.  If she drops it, she won't be able to get it back when she realizes it was a mistake. Moreover, she is too young for Medicare.  Also, she gets to keep the insurance in retirement, although it will cost a little more. Most private sector companies, even if they still offer a pension, are dropping health care coverage for retirees like hot potatoes, VERY HOT POTATOES.

    With 30+ years at the USPS, she will get a decent pension, but it is not going to equal her salary while working. However, she probably is correct about only needing to give the USPS 90 days notice of intent to retire. Moreover, since many jobs in the USPS are physically demanding, I can understand her thinking that it may be time to move on.

    Right now, some of her social life probably revolves around her friends and work associates. Once she does retire, she probably will not see these people nearly so often, unless they all retire at the same time with her.

    if she cannot afford a retirement community, at least encourage her to visit her local senior citizens center in her community.  Often the activities at such places are very low cost or free. Also, there is an organization for retired Federal and Postal employees that has local chapters. If there is a chapter in her community, she may enjoy going to their monthly meetings. They go by the acronmyn of NARFE.

  • 06-26-2010 2:05 PM In reply to

    • qa lady
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    Re: How to deal with financially irresponsible parent (SC)

    Visiting a senior center if she can't live in a decent senior community is a good idea.  We'll look up NARFE too.

    We've been anxiously awaiting August 11 when her bank stops allowing debit overdrafts :-)  I'm afraid she'll probably switch to using checks more often because she'll be able to opt out of that part and bounce them.  You are right though, it's one small positive change that will prevent some overdrafts!

    We fear she may just be "smart and lazy".  However, we want to make sure we aren't overlooking any other potential causes of her behavior. 

    Would trying to get her to visit a cognitive therapist with us to at least discuss the issue be a good plan? 

    It would require her to get actively involved in a strategy to change her behaviour (rather than talking to a counselor or doing psychotherapy).  If the therapist thinks there is a course of action that might work, we could try it, but if she quits she'll be on her own...sadly.

     

  • 06-28-2010 2:37 PM In reply to

    Unless/Until she opts in!

    .

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