Should I Help My 64 Yr Old Mother Be Financially Responsible

Updated on January 27, 2011
A.C. asks from Sterling Heights, MI
17 answers

My mother is 64 years old. Her entire savings consists of $64,000.00 from the recent sale of her last house sold due to divorce. She collects a very small retirement and social security. She does have good medical insurance. She has NEVER been responsible with money (bankruptcy twice and financial bail outs from my brother and me when emergencies arose). She has no plans for long term health care (aka nursing home) should she ever need it and has often expressed concerns about that.

Now she wants to spend her entire savings of $64,000 on a house (in addition to a loan for the full amount she qualifies for). This would leave her with no savings for emergencies/repairs/etc. not to mention nothing for long term care. She has no idea how much she can afford in a house. She started at $200,000 and then after I said she couldn't afford that she said maybe 150,000. Now she has been told by a loan officer the most she can qualify for is $130,000 (which is what I guessed to begin with). She is insisting she (who lives alone) has to have a three bedroom with 200,000 sq ft.

So, here are my two questions...

1. Should I stress myself over this? (And I am indeed quite stressed.) Is this none of my business and I should let her make her own mistakes? She DOES ask my advice, though she never takes it (not because she doesn’t value it, but because she doesn’t want to face the facts and be responsible; she’ll even admit to that if you ask her!). I think I should worry about it because, more than anything, I feel it is my responsibility as her daughter to give her good advice; but also, if she goes broke due to this, brother and I will be the ones footing the bill should she ever need long term health care.

2. Where does one find resources regarding financial planning for a 64 yr old? All the books and internet sites are geared at people in their 20’s and 30’s with 2 ½ kids. I’ve tried books, internet, the local senior center, the county’s senior services department, and a local university. No one had anything to educate people who wait until 64 to start financial planning. We don’t even know how to figure out how much savings she should have or how much she can afford in a house/rent payment as an “elderly” person.

What can I do next?

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R.J.

answers from Salt Lake City on

Here is the thing when she is broke and they take her house because she cant afford it and she needs care because she cant take care of herself ALL of that somehow comes back to the kids.
I have watched my MIL struggle with her parents like this for years, they were financially irresponsible, their house was foreclosed, their car repossessed and they couldn't for the life of them get it together. They were in their late 70's . Had she known sooner she could have stopped it. When they died she ended up with all the bills, burial, plot, funeral it left a really bitter taste.
Talk to your mother now let her know that if she doesnt get it together now and act responsibly now when something happens- and it will- that you will not take responsibility for it

2 moms found this helpful
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A.D.

answers from Minneapolis on

Unfortunately her bad habits may impact you and your retirement if she goes bankrupt again and has no way to earn any further money. I would let her know that you will not let her affect your retirement/college savings for your family. Then sit her down and help her with a budget. $64K is a horrible savings but it could work for her if she really lives within the monthly retirement and social security she receives. Help her find an apartment that she can afford plus utilities, plus food, etc on that retirement and SS money. Basically you try to help her live within her means but if she chooses not to, you should not enable her by being a potentiall "bail-out" for her. I'm sorry you have to go through this. Good luck!

2 moms found this helpful
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B.M.

answers from Detroit on

(I have not read others' responses, so I apologize if this is a duplicate)

No, no, no, no, no......

do NOT financially get involved in your mom's mess - if you know that she is making unwise decisions, then it would only do you harm to have your name attached to those poor choices, legally binding you to help clean it up.

Read The Total Money Makeover, by Dave Ramsey. Give your mom a copy, telling her that you are working to make wise money-choices in your own life, and that this book changed your life (Dave actually tells people who call into his radio show to do this).
Dave Ramsey also has a local radio show from 7-9 PM M-F on 103.5 FM. He helps people get out of debt all the time -- if THEY are willing to work for it. But he always advises families to stay out of their own family's money business (i.e. mother, in-laws, siblings, etc) because it never ends well.

The thing is, the old saying is true: "you can lead a horse to water, but you can't make him drink". You can tell your mom advice until you're blue in the face, but until she is willing to actually work to change her own behavior.....then that's where she is at, and will remain.

As frustrating as it is to watch your own family make poor money choices, it is not your burden to bear. Figure out where your "limit" is to helping her (emotionally only!) and stick to those boundaries. In the end, this might be your only saving grace!

Good luck.

2 moms found this helpful
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B.D.

answers from Pittsburgh on

I was glad to see that you are not helping her monetarily. I remember a Dr. Phil episode where he said 'you can't fix money problems with money'. You see it yourself as she repeats the same mistakes over and over again.

As for resources, I remember a book about Charles Schwab that was titled something to the effect 'You're retired now what'. I am not sure if that book is intended for those who have laid the financial groundwork all of their years or not. You could try the library to see if that is what you are looking for.

As for long term care...I'm not so sure many of the baby boomers have LTC insurance. I don't believe you or your brother would be responsible though. I believe once her life savings is gone etc then Medicaid kicks in or something like that. I don't know the particulars.

Unfortunately I think your only option is to sit back and let her make her own mistakes and not feel responsible to pick up the pieces. You've tried by giving her sound advice and that is about all you can do. Maybe learn from her mistakes so that you don't make the same ones but it sounds like you've already mastered that piece.

1 mom found this helpful
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R.K.

answers from Dallas on

If she is of sound mind and body, and it sounds like she is, you should let her do as she chooses. You may also make the choice to help her financially or not when the need arises. It isn't your responsibility although I am sure it is hard to say no. Check out Suze Orman, she may have something for seniors.

1 mom found this helpful
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D.P.

answers from Norfolk on

If she hasn't learned by 64, she'll never learn. Focus your energy on someone else who can be saved.

1 mom found this helpful
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D.B.

answers from Charlotte on

.

1 mom found this helpful

P.M.

answers from Tampa on

Tell her to get a reality check. An elderly women living alone will not need more than a 1,000 condo in a 55+ community! She can put $20,000 down and mortgage the rest (which is about $20-40,000) for a low reasonable payment from her other income resources.

Let her know that families will be coming to your/brother's/etc home for holidays, not your Mother's. That may be why she's thinking she needs a larger home.

Put the rest of the settlement in a CD where she cannot touch it, but has a great interest rate!

1 mom found this helpful
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M.P.

answers from Detroit on

Yes it is your business. One get her in a condo. There are very inexpensive yet clean and very nice condos. I've seen them for as low as $39,000. I live in Brighton.

Second there are many lawyers out there who will help your mom for a minimal amount and get a trust set up. I have a lawyer for my dad and she has gone above and beyond. She is in Brighton, but I'm certain she would know a lawyer closer to you.

Three I have a friend who specializes in investing for people 55 and older.

If you would like the lawyer's information and/or the person for investiments contact information, let me know.

Good luck with this. At this age, our parents do become our children. Which scares me as does that mean I'll be like that. Yikes!

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M.L.

answers from Colorado Springs on

I just read the other answers and they sound sensible. Does your mother have a friend who is very sensible about money - say, a banker or a financial advisor - whom she likes and would listen to? Sometimes a parent will listen more readily to a friend than to an "upstart kid" like you. :^)

G.T.

answers from Modesto on

If she asks for your advice give it. If she doesnt then dont. Its her money and her life. Would you want one of your kids telling you what to do if you didnt ask them?

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M.M.

answers from Chicago on

I agree with those who say that you cannot teach an old dog new tricks. And some folks do not want to think that the day will come and they will be sick or die. My Mom sometimes makes not the wisest desicions with her money. I just learned to let it go because she has the right to live her life and make her decisions.
However, if you and your brother are concearned about long term care you can buy your Mom's insurance and pay premiums and you will feel protected in case she becomes unable to care for herself. I did this with my Mom, just bought her LTC insurance together with my sister when she was in her late 50s and now due to health conditions and thanks to insurance pay offs we can afford help 3Xweek for Mom.
I just think as kids we own to parents no matter what, especialy to moms for all the sacrifices they made for us.

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D.P.

answers from Pittsburgh on

She is an adult, and I guess that means she can make her own decisions--right or wrong.

BUT if you feel her misuse of her funds is going to impact YOU (pay her bills, house her eventually) you might want to consider getting her some power and knowledge about personal finance.

While I agree, this is not the time to look into saving & investing for the future, it's ALWAYS a good time to learn proper money management. Get her O. of Dave Ramsay's books, or better yet, the gift of Financial Peace University classes near you/her.

Buying a house worth twice her lifetime savings is probably not a good idea. If anything, she should buy a condo or something like that for about 55K and bank the rest. Above all, she needs to make sure ALL debt is paid off.

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M.W.

answers from Detroit on

No bail outs. No stress about it. Give her sound advise (maybe save half the money for emergencies, and put the other half down and buy a smaller house), and then let the chips fall where they may.

I'd also have a frank conversation with her about how you're not going to bail her out (see if you can get your bro on board here too). And what the consequences of her actions would be.

I'd take her to see a financial counselor, they can give her specific advise.

Best wishes!

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K.U.

answers from Detroit on

Depending on her age and income, she may qualify for section 8 senior housing, where her rent is based on her monthly income. My grandmother is 94 and still lives on her own in her own apartment - her rent is a percentage of her Social Security income as well as her late husband's pension. She has about $25,000.00 in savings, that's it. But she doesn't have much in the way of expenses anymore - she's done with traveling, does not drive or own a car and spends her days volunteering with Meals on Wheels and running Bingo games. She is in Troy and the apartments are very nice and adequate for her needs. Her sister - in her 70's, same thing.

Granted, your mother is 30 years younger, but realistically this might be all she can reasonably afford. A friend of mine's parents were never responsible with money when they were younger either - when they made good money, they spent it, rather than saving it. And they were self-employed and preferred to get paid under the table, so nothing went to Social Security. Well guess what - you don't pay in, nothing gets paid out. Now they are in their 60s and 70s, are living in section 8 senior housing and depend on Medicare and Medicaid for their health expenses. Their place is small but at least they have a roof over their head.

Unless you speak with an attorney about gaining control over your mother's finances, your mother can do whatever she wants to do. She would be better off trying to qualify for a section 8 condo or apartment and understand that the choices she has made with her money are what has brought her to this point (not that the housing is bad or sub-par - but it's not going to be a 2000 square foot home either). If she has to go into a nursing home, she would probably qualify for Medicaid, but she would have to go through all her savings and demonstrate that she does not have any other income first.

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V.H.

answers from Detroit on

I am surprises that she will even get a mortgage at 64 - esp a 30 year one. I know people are living longer these days but will the bank take the risk on someone still being around at 94 to make that final payment? Before she builds dreams in her head make sure the reality matches.....

F.H.

answers from Phoenix on

Frankly, no you shouldn't. If she asks your advice you give it, if she does what she wants and it bites her in the butt, then you nicely say "I told you so" and let her deal with the consequences. Pick your battles, this one is not yours, and stay out of her decisions and don't feel like you need to bail her out. In fact, maybe tell her you don't agree with what she's doing, it will get her in over her head, and if it does, you will not be in a positition to help her out. Then when (not IF) the time comes, she will not be surprised at your response. Good luck!

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