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I need some help to help my parents

edited 30 November -1 at 1:00AM in Debt-Free Wannabe
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  • Debt_Free_ChickDebt_Free_Chick Forumite
    13.3K posts
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    Hi Jimmy

    If you can find the information and the time then, yes, complete the MS Money records. You could then show them the "Net Worth" report (nets off all debts against assets) and the Cashflow Forecast (shows where their money will go in the future).

    I wouldn't show him this thread - "A load of interfering know-alls who know nothing about our situation" is the kind of reply that springs to mind ;)

    The Money forecasts will, on the other hand, be based on the hard facts.

    Good Luck
    Warning ..... I'm a peri-menopausal axe-wielding maniac ;)
  • peterbakerpeterbaker
    3.1K posts
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    Hi Jimmy

    Well done for tackling this so sensitively and systematically. But it sure has just got messier than you thought at the start, hasn't it?

    The use of multiple credit cards in your parents situation is a particularly unfortunate development. It is dangerous of course because no-one in the house has found the capacity or will to steer where it is going as it careers downhill, or maybe they are reckless at the wheel but not fussed about stopping?

    I am not a very good pschologist or relations person. Others here seem to be very good at that so I am sure you have been able to take on board some of their very good ideas. Obviously you Jimmy are the best person to control all the finances if your parents were in full agreement with you, but I would guess that contrary to what others have said, they do not just have their heads in the sand. They may be consciously rebelling against the system. It's not pretty nor is it entirely logical, but it's not unknown.

    When I make a point, I often tend to be blunt and adjust the consequences afterwards if they have been a little excessive. I am 47 and my parents almost to their 80s now but the type of communication in your house I recognise instantly as that in my family. Luckily, and unlike your parents, my parents were taught very disciplined money management indeed and I have never needed to intervene. They have been remarkably thrifty on low incomes. I can remember the huge stress however when they took the monumentous decision to buy their council house with a £3,000 mortgage in 1971 just before I did my O levels! My father went grey almost overnight with worry. Our relationship broke down badly when I insisted on going to university. He said I should get a trade instead. My mother took my side. I forced the issue and of course my father helped, but do you know what? I think I should have followed his advice! In 2005 I want to be a plumber or an electrician but I can't achieve that without enormous effort now! My parents of course had had very hard lessons ingrained in their early years (WW2 and the aftermath). Post war generations didn't learn so well.

    My post here is another of my typically long ones I'm afraid, but some people seem to find a bit of value in them every now and then so I thought I would tell some stories that might be of interest to you just as possible old colours or backdrops to whatever plans you make:

    As a "clued-up"(sic) family member I have managed to intervene successfully in four out of five family members' cases but they were all less complex than yours. I suspect that all five together only just begin to reach the magnitude of your parents case. The five were, in order:

    1. A minor pension disaster - I had started work in insurance (general not life&pensions). Nevertheless I eventually got to discussing pensions with my father and talked him into bolstering his maximum 40% final salary scheme (not enough years) with AVCs with the same company. What a disastrous piece of advice that was. The trusted pensions industry has of course disappeared on the breeze alongwith the extra money he paid into the AVCs. His old ingrained ideas would have been much more sound.

    2. A credit card spiral like your parents, but just a Barclaycard - I nailed it with a low interest "for the life of the loan" rate balance transfer out and back in again through a new Egg Card account that has never been used since thank goodness. I also managed to quarantine the life of the loan deal from further spending by negotiating a transfer of credit limit between the Barclaycard and a second unused Barclaycard Mastercard leaving a £1,000 limit for the "spend" card. This was a senior family member a bit younger than my parents who left her credit card bill under the magnet on her fridge for all to see! Maybe a plea for help? But I am glad she did. SO that was a relatively easy intervention using info like you find here on MSE.

    3. A low start mortgage that was forecast to go ballistic just as negative equity was beginning to bite and interest rates were set possibly to go seriously teenage again, and their income had also dropped. I had to bang heads together to show that a seriously altered budget was needed before the cart drove the horse into the ditch. Those were younger members who respected my judgement to a point. I used shock tactics a little like some of those suggested in this thread to show what would happen in the worst instance. Because of the lack of social skills abounding in families like this (my own lack included), a lot of loud discussion ensued, mostly me forcing the issue to be acknowledged. I distinctly remember my bro-in-law smiling later in the kitchen as we cooled down with a beer and saying yes Peter the rates could go to 15% again but then again they might go down to 5%. I said "That'll never happen". They worked extremely hard and have since outstripped me in all respects and taught me a thing or two!

    4. A helping hand back onto the ladder - Another couple my age but less financially able struggled with a mortgage in the early days of their marriage but then succumbed to the offer of a free house with a job and sold theirs for the same as they paid for it more or less and bought a new car instead. Ten years later their house would have cost well over twice as much and they despaired of having missed a chance of a lifetime. They found a "dead duck" of a house which had subsidence. Negotiated a song of a deal and I had the stress of calling in favours to get the mortgage. It was hellish. First I thought I had it, then I seem to have failed, I had to press very hard indeed to get it back on the rails. Even at the song price the income multiples were unheard of, it was a 100% mortgage and it had the bad survey of course. I remember the tears, the pleas to make it work (I think my sister-in-law even hammered her fists on my chest one evening!) and then when it succeeded, the fears that the house might remain a dead duck and never be re-saleable. It turned out that the house cost very little to fix with the optimistic help of couple number 2, but the mortgage was an endowment. You can guess how that started to go! But with achievement under their belts, this couple grew stronger and decided to spit in the face of the insurance industry and dump the endowment early. They bravely faced the high street and got their own new mortgage deal a few years later. I was proud of them. They've done tremendously well and recovered all the lost ground (from stepping off the ladder for 10 years), and more. I feel a bit guilty that I haven't pressed them to make an endowment claim, but somehow I think they already made their point very well anyway and don't need me anymore to stick my oar in.

    5. Steering my brother away from "a real friend in the pub" who was about to take an equity share in my brother's house! My brother was given a fantastic chance to buy the house he had rented all his married life. But even at the extremely low price he couldn't get the finance. My brother was being shown a gift horse by being offered the house by a fantastic landlord we have both known nearly all our lives, but was unconvinced he should buy it. But it was either that or risk an unknown new landlord who might be far less generous. I regret to say that because of life-long communication problems I had a huge task prising my brother from his chosen course of action which was to buy it but use the man in the pub. I had then to bareback-ride a deal from our lifelong main bank, Barclays, who I must say can still be remarkably good at taking the long view on such things if you find the right person to help. I joined my brother on the mortgage deed but took no equity of course. He has moaned unbelievably at times at how he wished he had never bought it, and was better off renting, but I am glad to say he recently also bravely faced the high street unaided to check out remortgage deals, and then renegotiated with Barclays himself. Now the mortgage is in his sole name too. I am very proud of him. He still moans incessantly though on occasions about his lot! "Don't get me wrong Peter, I am not ungrateful for your help, but I really am not sure I am any better off!" I wish I had gained a good six figures equity in 3 years like he has, but he often dismisses it as monopoly money! "I can't spend it. I want to live here but if I can't pay the mortgage I'll just hand back the keys and get by in a council house".

    What I have tried to illustrate is that there are all kinds of irrational financial behaviours in typical families and some very serious gambling mixed with apparent heads in sand. We moneysavers like to control everything in logical steps but often family units seem to defy logic and win and I at my age I am re-evaluating things constantly to try to work out who has the right idea!

    I suspect your parents may be my age i.e. they have ingrained that neighbours think nothing of taking on finance on a new car to place in the drive every few years, and extend the mortgage without a blink. They will also feel extremely let down by the country over their pension to the point they may even have made a conscious decision to say "sod it - we've given our best to this country but look what we've got back. We'll see Jim through his education and then play the credit game like everyone else until it's game over - let Tony bloody Blair pick up the pieces". It sounds rash, but that could well be their politics and if it is then maybe the best you can do is help them fight the fires sensitively as you have been doing and create firebreaks as best you can while they are set on playing that game.

    I wish you and your family all the very best. Good luck with everything.
  • elonaelona Forumite
    11.8K posts
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    Jimmy
    I think if you showed your father this thread that he would probably go mad and start muttering about "people knowing all our business" and wondering if you were trying to make a fool of him.

    Next time he mentions the sooner you are out of this house the better- try smiling at him and agreeing because you would not want your credit rating to be affected by living at the same address!

    At the moment all you can do is to save yourself and let them get on with it.
    Try not to let it make you ill :):):)
    "This site is addictive!"
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  • Hi Jimmy,

    Sounds like your Dad really is burying his head in the sand! I'm thinking that he must realise the severity of the situation (though maybe not the full extent) and may well be quite stressed about it. Maybe it's that man-of-the-house thing - he may not want to admit that he's having problems providing for his family as he believes he is expected to do, as to admit it is admitting that he's failed (which he hasn't at all - he's still happily married and obviously has a strong relationship with his children, and that's success in my book!). Which may explain his reticence to talk about problems.

    Is it worth working on your mum instead to try and get her to realise the problem and talk to him about it?

    Or maybe sitting him down in a "you're not leaving until I've had my say" kind of way and explaining that you are concerned because you care about him and your mum and want them to have a happy retirement, and that it's okay to ask for help, and going through everything? He may be a bit upset and angry in the short term but if it forces him to face the situation and start sorting things out, and he realises that talking about it actually makes it better not worse, then it should actually make your relationship stronger?

    Are there any groups that they're involved with (WI, Rotary Club etc) that you may be able to speak to to suggest a guest speaker to talk about finance?

    I really feel for you - I actually talked to my parents about your situation the other week and they admitted that they were worried about my grandmother for similar reasons which has prompted them to start trying to get involved there too - a bit ironic as 5 years ago they never talked about money and now they're acting as a financial-guru team (if there is such a thing!)

    Good luck!
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