Ask Money

Time to grow up, financially

Chris Farrell Mar 24, 2011

Question: I am 62 and still working and my wife is retired. My problem is my step-daughter and son-in-law. How can they learn how to manage their money? Their situation is that our daughter has a good job, has a masters degree and makes about $90K; son-in-law works odd jobs and makes 10-20K. They have a mortgage and 1 car payment and, I suspect, significant credit card debt. Our daughter borrows my wife’s AMEX card to pay for travel expenses because their credit is too bad to get one themselves. She does pay us back for it but they don’t seem to think that borrowing a parent’s credit card at 40 & 50 years old is a problem. We also, mostly my wife, subsidize their expenses to the tune of $10k + annually which I would like to stop. They won’t listen to us so the idea of giving them advice won’t work. Since this is my wife’s only child she is reluctant to risk any conflict. Any thoughts or advice? Denis, Archbold, OH

Answer: My first–and strongest–reaction–is to cut them off from your credit cards and financial gifts beginning yesterday. You could soften the blow by emphasizing that you’re getting older, expenses are starting to climb, and you need to focus more on taking care of your long-term financial health.

But I realize there are other dynamics at work. So, what about the idea of bringing in a neutral third party to facilitate a money conversation among the four of you?

In other words, hire a certified financial planner or someone else with genuine personal finance knowledge as well as experience with mediation to address the money issue.

The planner will have a stock of knowledge to draw on. Many planners are well schooled in dealing with family dynamics. 9In fact a lot of them will tell you that’s the biggest part of their job.) The real advantage of this approach for you is that it’s often easier to discuss difficult topics with a mediator or coach in the middle. It’s why couples turn to marriage counselors during troubled times.

I imagine the upfront cost of a session or two won’t be cheap. But it will be certainly far less than the annual $10,000 or so you’re paying out now and the long-term benefits to your finances and theirs is considerable. It’s time that they stood on their own financial feet. You should be spending your earnings and savings on your own experiences and expenses.

If that doesn’t work, I think you have to go the tough love route. And then keep the door open for when the anger subsides–but the wallet closed.

Sad to say, this isn’t an uncommon situation. If anyone reading this has dealt with a similar situation, let us know how you handled it.

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