Advice on parent with bad finance habits

My mother has always been bad with money, always. My father passed at 55 (she was 45). She burned up his life insurance and had to sell the house within a year and a half. I don't even know where it went, I was 17.

Fast forward 25 years. She has declared bankruptcy several times. She is 70 and living on Social Security and his monthly pension. It's not a lot, but enough to get by on if you budget. About six months ago, she got behind on her rent and we all (my siblings and I) helped her find a more affordable place and moved her in with the condition that I would take over her finances so she couldn't get in this bind again. It was working for a while, until she discovered she could go the bank teller and withdraw money with her DL, and started doing so without telling me. At the beginning of Feb, she told me she wanted to take over doing her finances again and that she had a handle on it. Since she had been withdrawing money whenever, I agreed. Until she got a new bank card. Within two weeks, she is already overdrawn $100, with a penalty of $35.

She thinks its no big deal, but I foresee this happening all over again.

How can I remedy this? Obviously, I can't take her access to her own money away (and I don't want to), but I don't want to have to move her every few years because she can't pay the rent. Any suggestions?

Re: Advice on parent with bad finance habits

I know it might be difficult but I think you need to stop bailing her out. Let her hit rock bottom and figure it out on her own.

Re: Advice on parent with bad finance habits

Please don't take this the wrong way, but I would handle it differently based on the answers:
Was your father at all controlling and did not allow her free access to their money before he died? Was she kept on a budget and had to account for her spending? Did she ever have her own income/own money?

Advice on parent with bad finance habits

She had a few minor short stint jobs growing up, but was primarily a stay at home mom. My dad did all the finances, but was not controlling (at least not in front of us). When he passed, she did not even know how to write a check. He gave her what she needed for groceries and such, and I don't remember her ever having this spending problem growing up.

Re: Advice on parent with bad finance habits

Advice on parent with bad finance habits

I had someone in my life with a major spending issue .. I'm sad to say that it's like any other addiction ... They have to want to change on their own, they think they don't have an issue, they think they are in control .. It's awful to watch. And it's easy to get angry ..especially when it's affecting your own pocket book!

I have no advice because if she doesn't see that she has a problem, there's nothing you can say or do that will change her mind. I find that people with spending issues always are lucky and have people who bail them out constantly - and they do it out of love and concern - but I think the spender knows this and uses it as a safety net.

I'm sorry you have to deal with this :(

Message edited 2/24/2015 3:51:04 PM.

Advice on parent with bad finance habits

Thank you. I wasn't aware the bank could enforce a limit. We tried doing that between us. When I was doing her finances, we agreed that she would take out a said amount every Friday. But when Friday came, she would often take out much more and not tell me until I checked the account online. And then she would make an excuse for why she needed more.

I will call the bank and see if we can make an appointment to go down there and speak to someone. At this point, if she knows the money is there, I think she will take it out at will.

Advice on parent with bad finance habits

EatingMyVeggies - I think you hit the nail on the head. She denies any type of problem, says she can control her spending at any time. And she know with 5 children, someone will always pick her up again.

It's so frustrating to watch.

Re: Advice on parent with bad finance habits

I now control my FIL's finances because he can't do it himself. At 82 he really can't. He tried but failed miserably. He acts like a child so we treat him like one.
I blame my MIL for babying him all these years, my DH has the same bad habit of being an ostrich with his head in the f-in sand.

FIL went into a "funk" and didn't pay his bills except for the rent.
His phone, cell phone, cable, newspaper and home insurance were all terminated. I got everything back on and put it all in my name.
Let his medicare advantage plan lapse, so now he has no prescription drug coverage. Now, he has to pay an extra $200/month for a plan I was able to get this week, until I can get him into something during the next enrollment period.

DH and I control the account where his social security is deposited. It is from there that I pay all the bills.
He has another checking account and an ATM card linked to that with a small amount in it for anything he may need. His pension comes in a check that he cashes and uses to buy food and stuff for the cats.

FIL is a hoarder, so we have to watch what he spends his money on. Stupid stuff most of the time - like he wanted an AARP membership. He won't use any of the benefits of AARP, but they would send him a "free cooler tote bag" with his $18 a year subscription. Really ?

He gets lectured every few weeks or so, especially for paying $374 per month for a storage unit to store crap he does not need.
Finally got it thru his head that his entire social security check goes to pay for rent on the apartment and for the storage unit. The rest of his bills get paid out of his savings. Once that's gone, that is it.

Long story, but at 70, you still have a bit of hope for your mom.

Sit her down with all your siblings and tell her that she has a choice - she can continue on the path of financial irresponsibility and she is on her own - none of you will bail her out.

Write out on paper, what her income is, what fixed expenses she has, what is left over to spend on whatever. Also note how much is in savings accounts, etc.
I do this with FIL so that he gets a better perspective. He needs to SEE it to understand it,

Or she can be adult about it, let you take care of her finances and she lives on an allowance. One slip up, and she's on her own.

Good luck - it sucks to have to parent a parent.

Re: Advice on parent with bad finance habits

Advice on parent with bad finance habits

I agree with PPs..

But as a side note.. I have a checking and savings account and for some reason my hubby wasn't around when I set up the savings (money market) side. So he has NO access to that money via his bank card. Of course he CAN move money from savings to checking since he has access to the log in info.. but I'm not worried about that or him.

But I was thinking maybe you can set it up similar? If you have a joint account that is. I still keep money in my savings aside from checking because my hubby really WONT move money over. He gets confused between my money market and my overdraft protection line. haha

Side note: we have one joint account and two separate accounts so my hubby isn't dumb just not motivated to care about our joint account blocking him to the savings.

Advice on parent with bad finance habits

I am hesitant to put my name on any of her accounts because she has such poor credit. DH and I have excellent credit and I'm afraid it will screw that up.

We had this sit down with her (all of us) six months ago when she got herself in this mess. She agreed at that time to let me do the finances. Well, she was really forced to agree.

My brother said to transfer money for the bills into my own account, and only leave her what's left for spending. But that seems illegal to me. I don't want anyone saying I stole her money. I guess my name would have to be on her account for that to be allowed?

Does anyone know if my name could be added without any financial repercussions to me?

Advice on parent with bad finance habits

probably not then..

Well then like I said.. I agree with PP she has to suffer her own consequences :(

Advice on parent with bad finance habits

Thank you all for the advice. I really appreciate it. I have no one really to talk to about it because my siblings are tired of it all.

Re: Advice on parent with bad finance habits

The Chase checking and savings accounts have our 3 names on them, that is the checking account I use to pay all the bills. The bills are in my name but the service address is his.
I log everything I pay for him in a ledger book.
The old man has no credit - he screwed that up years ago. No credit cards, no loans, nothing.

DH has no siblings that is why I am stuck with doing everything.
If any of FIL's family ever accused me of wrongdoing, I will walk away from this and let them deal with him and the disgusting hoarding apartment.
DH completely sides with me - this is his stepdad.

I don't know if an eldercare lawyer would be able to help you set things up to protect yourself.

eta DH and I also have power of attorney for the old man.

Message edited 2/24/2015 6:11:38 PM.

Re: Advice on parent with bad finance habits

I don't really have any advise. I just wanted to say I go through the same thing with my mom and I'm sorry you are dealing with this. It's stressful and awful, so hugs.

The one thing I will say is that I won't put my name on anything of hers. She is out of control and I don't want to be responsible for any of her debt AND I don't want her habits to affect my credit. Just be careful about that. I agree, it is like addiction and they really don't understand/care how their actions might affect your life, so don't put yourself in a position where you may end up really suffering for it!

For me (and it's just me helping my mom out), I do what I'm comfortable with and have given up on the rest. For example, I pay her mortgage, really b/c she can't live with me ever and it's cheaper than renting her an apt.... BUT I did tell her that if I ever catch her taking out money against the house I will stop paying her mortgage immediately and she cannot live with me.

I don't know if that helped at all, but just watch out for yourself. Your mom likely won't....

Advice on parent with bad finance habits

You might look into a legal conservatorship. That worked for my MIL. It made her life easier and less stressful. Someone else was in charge of all of her money and paid her expenses. She was given access to some discretionary spending money, but not much.

Re: Advice on parent with bad finance habits

Advice on parent with bad finance habits

Thank you. I am really hoping to find a way to do this without putting my name on anything associated with her money. I will make some calls. This whole situation really stinks.

Re: Advice on parent with bad finance habits

You need to speak with an elder care attorney who can help you. The issue you may find is that the attorney wants to only represent your mom. In general, I would not make any accounts joints with her. Never go joint on any loans or credit cards with her either. I would look to get a power of attorney and conservatorship in place, or even a trust. From your description you need legal advice. I would call your local bar association for an elder care attorney recommendation.

Re: Advice on parent with bad finance habits

Advice on parent with bad finance habits

Thank you! I am looking into that now. I appreciate all the advice.