When Your Parents’ Finances Become Your Business

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I wasn't always so comfortable candidly sharing a detailed report of my quarterly net worth with the world, so I can certainly understand my parents' hesitancy in openly revealing a complete picture of their financial situation to my sister and I.

We were raised to keep the cards of our personal finances close to the vest, and I suspect that my parents' upbringing was similar. They were both raised in frugal Catholic families who lived simply, frowning upon large financial splurges, especially for oneself. That's why I was so shocked when my father recently revealed their excessive monthly expenses.

I mentioned in January that I had recently had “the talk” with my parents. After my father's 60th birthday, he began giving serious consideration to the possibility of retiring at the age of 62. He explained that despite the fact that my parents hadn't saved a lot of money, between social security and a small pension, a financial planner believed that 62 might be a realistic retirement age for him.

“What do you mean, might?” I inquired, somewhat irritated, demanding to know how this conclusion had been reached.

“We put together a rough estimate of monthly expenses with him…” He began and I interrupted.

“Have you kept up with your monthly budget? How accurate do you feel these estimates are?”

“We've never really needed to keep a budget. We live frugally, don't have expensive hobbies…” He defended himself.

“So, can you really be sure that you'll be ready to retire at 62?”

He didn't really have an answer. I felt bad for getting agitated and being so critical, but it seemed like they were making estimates somewhat loosely with a financial planner who knew very little about them. After all, if my parents had never had a budget, how would they even know where to start?

My father agreed that he would feel more comfortable with his decision if his estimates were a bit more accurate, so I sent him a basic budget spreadsheet to get them started. He was initially secretive about some of the expense category names, but eased up once he realized I could more quickly make the necessary changes for him in Excel.

Then came the crazy realization: my parents were spending nearly four times the amount of money per month than I do. Whaaaaaa?

How is this possible? Not sure exactly. Should it bother me? My parents are hardworking individuals who supported themselves through four degrees, eventually obtaining well-paying jobs in healthcare. If they want to spend a large portion of their hard earned dollars, should I be concerned?

I'd love for my father to retire at 62. He's worked an extremely stressful job for his entire career, and he's expressed a desire to leave that job as soon as possible. He absolutely deserves a little rest and relaxation, as well as the time to pursue some of his other interests. I just want make sure he's making this important decision with the most accurate information.

Readers: Have you made your parents' finances your business? Am I wrong to be concerned?

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Discussions — 50 Responses

  • Lauren April 25, 2014 on 3:26 pm

    I was not really privy to specifics about my parent’s income and expenses when I was growing up. It wasn’t until my father passed away that I had a clear picture of their financial situation. I think it’s good to be concerned and offer your parents help and advice, if they’re willing to accept it. I would just be careful not to offend them or make them feel bad about any aspect of their finances.

    Reply
    • Addison Cash Lauren April 26, 2014 on 4:51 pm

      Sorry about your father, Lauren. You make some great points. Personal finance is such a sensitive issue.

      Reply
  • John @ Sprout Wealth April 25, 2014 on 3:29 pm

    I don’t think you’re wrong to be concerned at all. You’re simply loving them and wanting to help them so they can retire when they like, not to mention not spending like crazy. I’ve had similar discussions with one of my parents and it’s usually a train wreck as they see no need to be fiscally responsible at all. I do my best to communicate that I love them and don’t want them to be miserable financially, as they are, but there is only so much you can do some times.

    Reply
    • Addison Cash John @ Sprout Wealth April 26, 2014 on 4:50 pm

      With 62 rapidly approaching, my father will have to start being more realistic about exactly how much money he has going out. I understand that it takes time, though.

      Reply
  • Income Surfer April 25, 2014 on 3:37 pm

    At some point it does become a concern. My wife and I have started getting involved in our parent’s financial concerns recently. My Dad and I had a serious talk when he (and my step mother) were talking about retiring last year. I check in quarterly to be sure that he isn’t dipping into principle now that he’s retired. So far so good.

    My wife’s family has always struggled financially. Unfortunately, we know they will be moving in with us in the future. We’d rather that, then them be on the street. They don’t make any big financial mistakes……they just didn’t start saving until WAY TOO LATE.
    -Bryan

    Reply
    • Addison Cash Income Surfer April 26, 2014 on 4:48 pm

      Your Dad is lucky to have you, Bryan! Maybe your wife’s family can help with the baby? It might be nice to have a little break once in a while 🙂

      Reply
  • Joshua Rodriguez April 25, 2014 on 5:45 pm

    Hey Addison, thanks for sharing this story. I haven’t yet dug into my parent’s finances, but I don’t think you’re wrong to be concerned. It would be shocking for me to find out my parents spend that much more than I do as well. Keep meddling, maybe it will lead to a possibility of you helping!

    Reply
    • Addison Cash Joshua Rodriguez April 26, 2014 on 4:46 pm

      Thanks for the encouragement, Joshua!

      Reply
  • E.M. April 25, 2014 on 6:35 pm

    Yes, with their permission. I understand your concerns and wanting to help your parents out. My parents have been in debt my whole life, and when they decided to retire, I wanted to make sure it would be feasible. They don’t have much invested, but my dad is receiving social security and my mom has a small pension. They claim to live frugally, too, but they both smoke, and that is not cheap. They tend to go a bit overboard with food sometimes. I plan on trying to get them on a better track now that I’ve moved closer to them. At the very least, I got them to pay off a few debts and they’re making extra payments toward the others.

    Reply
    • Addison Cash E.M. April 26, 2014 on 4:46 pm

      Sounds like a difficult situation, E.M. Fortunately, my parents have never been in debt! I guess everyone’s definition of frugal is different.

      Reply
  • Shannon @ Financially Blonde April 25, 2014 on 7:47 pm

    My mom lost her husband last year, and her finances became my business and I am personally glad that I know what is happening. I have a few clients who are nearing retirement and I am actually very concerned about their spending levels. It is so hard to get them to change when they get to that point. That is why I love working with clients in their 20s and 30s, it is so much easier to change habits before they become bad ones.

    Reply
    • Addison Cash Shannon @ Financially Blonde April 26, 2014 on 4:45 pm

      Sounds like your mom is lucky to have you, Shannon. You’re totally right about forming good habits early!

      Reply
  • Bridget April 25, 2014 on 7:50 pm

    My dad’s retirement plan is to “work until he dies”. It makes me so mad but I know I have no control over my parents actions and decisions. I just hope I make enough to help them out if they need it.

    Reply
    • Addison Cash Bridget April 26, 2014 on 4:44 pm

      Agreed, Bridget. I consider the fact that I may need to help in the future and try to factor that in to my future financial plans.

      Reply
  • Stefanie @ The Broke and Beautiful Life April 25, 2014 on 9:25 pm

    My parents are 63 and show no signs of slowing down their work any time soon. In fact, they seem to be working harder than ever.

    My parents aren’t really spendthrifts though, that would stress me out.

    Reply
    • Addison Cash Stefanie @ The Broke and Beautiful Life April 26, 2014 on 4:43 pm

      Great to hear that your parents are frugal, Stefanie. I’m hoping that the budget spreadsheet will open my parents’ eyes and help them reel their spending in.

      Reply
  • Brian @ Luke1428 April 25, 2014 on 9:26 pm

    This is going to be a real tough one for you to manage delicately. I think you have every right to be concerned but not every right to intervene if they don’t want help or advice. Sounds like whether they want help from you is still up in the air. They did work on the budget so that’s a positive step. I’d go slowly with intervening and have a positive attitude about it. Getting agitated at their spending habits won’t work.

    Reply
    • Addison Cash Brian @ Luke1428 April 26, 2014 on 4:42 pm

      Very true, Brian. I can’t imagine what it would be like to need financial advice from my kid, but I probably wouldn’t enjoy it.

      Reply
  • Quinn @ Wealth Out West April 25, 2014 on 10:16 pm

    Sounds like a tricky and delicate situation. Talking about money and finances is so taboo in our culture that it makes these sort of discussions hard. I would just try to tread carefully, and hopefully your parents realize that you only have their best interests at heart!

    Reply
    • Addison Cash Quinn @ Wealth Out West April 26, 2014 on 4:41 pm

      Thanks, Quinn. I’m trying to be patient and giving them a little space. I’m sure they know that I want what’s best for them.

      Reply
  • SavvyJames April 26, 2014 on 12:26 am

    Like you, I have made my parent’s finances my business. As the oldest – and as fate would have it – the child that has experienced the most financial success, the responsibility has fallen to me.

    Without knowing the specifics of the situation, my general belief is that you have to be forceful, particularly if you see potential problems. Tiptoeing around issues that could devastate, or at least significantly impact their retired life (and likely the lives of you and your siblings), need to be talked about as soon as possible. Very few things get better with time.

    Reply
    • Addison Cash SavvyJames April 26, 2014 on 4:40 pm

      It’s definitely tricky, James. I agree that being proactive is a smart approach.

      Reply
  • Liz April 26, 2014 on 2:29 am

    I know next to nothing about my parent’s finances. They are super private about everything. I fairly sure they manage everything well but I guess you never know!

    Reply
    • Addison Cash Liz April 26, 2014 on 4:40 pm

      Privacy worries me. Hopefully they’ll be open about it if they ever need your help!

      Reply
  • LoonieLover April 26, 2014 on 2:00 pm

    I think you nailed it right at the beginning of your post. In our culture, but especially in our parents’ generation, money was just something that people didn’t talk about — sometimes even between spouses.
    Given the fact that it’s pretty-much a given that your parents have little to no financial education, I think it’s more than fair to encourage them to share their financial situation with you. How else can you help them? Your father’s uncertainty about their finances alone is reason enough to be concerned.

    Reply
    • Addison Cash LoonieLover April 26, 2014 on 4:39 pm

      Thanks for the advice, Jeff.

      Reply
  • Laura aka Mrs Nickels April 27, 2014 on 5:38 am

    The topic of finances can be awkward even between friends, but addressing those things with your parents raises it to a whole other level. They’re lucky, however, that they have you looking out for their best interest, no matter how uncomfortable that may be.

    Thankfully, my parents have always been frugal, lived below their means, and retired in their 60s, living a modest but fulfilling lifestyle. I learned a lot from following their example. But parents of a friend of mine weren’t so savvy. Both in their 50’s, they sold their paid-off home to help finance a much larger home. Then unemployment coincided with a downturn in the market. Suddenly they had no job, couldn’t make the new payments, couldn’t sell their house, and had lost every dollar of equity that they had sunk into it. They’re in the process of moving in with my friend and her husband. It’s sad…all around!

    Reply
    • Addison Cash Laura aka Mrs Nickels April 27, 2014 on 2:29 pm

      Thanks for sharing, Laura! Sounds like your friend’s parents are in a rough situation. I am fortunate that my parents don’t plan to upgrade their modest home.

      Reply
  • debt debs April 27, 2014 on 11:54 pm

    It’s interesting that they say they live frugally but yet their expenses tell a different story. That could have been us 2 years ago. I would have said we lived frugally because we weren’t living the high life, when in reality we were living beyond our means.

    As soon as someone says they don’t spend much and don’t need to track it you know there’s a problem.

    I hope that they will become enthusiastically frugal with your loving guidance and support.

    There’s not a lot of time to build their investments further to be able to afford their current expenditure level in retirement.

    Reply
    • Addison Cash debt debs April 28, 2014 on 12:09 am

      Agreed. It’s interesting to see what different definitions of “frugal” are! I had a good chat with my father tonight, so I’m looking forward to seeing how things go over the next few months.

      Reply
  • Brian April 28, 2014 on 12:47 am

    Yikes…..I can only imagine how that conversion must have went. I think Dave Ramsey calls it the ‘powdered butt syndrome’, in that if anyone powered you butt as a baby, they won’t really ever take advice from you.

    Isn’t it amazing that money has an influence in every single part of our lives….yet it can be seen as taboo to talk about it?

    I hope they can get their spending under control for your and their sake…..

    Reply
    • Addison Cash Brian April 28, 2014 on 7:47 pm

      Me too, Brian! I suspect things will change a lot over the next 18 months.

      Reply
  • Kay April 28, 2014 on 10:10 am

    I definitely keep track of how my parents are doing. I also invest some of my mother’s savings for her since she wouldn’t have access to the stock market otherwise. Like you, I’ve been pushing my father to retire (he’s 63). He has given me good reasons why he wants to stay until 65, and luckily he doesn’t “have to” for financial reasons. I think it’s good to advise them if they are open to hearing your thoughts.

    Reply
    • Addison Cash Kay April 28, 2014 on 7:42 pm

      Sounds your parents are in a good situation and they are definitely lucky to have an experienced investor to help them out!

      Reply
  • Brock @cleverdude April 28, 2014 on 11:06 am

    My Dad voluntarily shared with me how much my parents had saved for retirement….I was completely blown away. Suddenly all those “it’s too expensive” comments from my mom as I was growing up, as well as their overall frugal lifestyle made sense, and seemed to pay off.

    Reply
    • Addison Cash Brock @cleverdude April 28, 2014 on 7:41 pm

      Kudos to your parents! They are definitely in the minority.

      Reply
  • Chattanooga Cheapster April 28, 2014 on 2:03 pm

    I work with a lot of older people and I’m amazed by the number of people who have to come back and work as a “contractor” after they retire because they underestimated their spending habits. Just another example of why financial planners are pretty much worthless.

    Example I found when helping my mother with her finances – She was paying for 3 cell phone accounts and had no idea. The guy at the AT&T store basically ripped her off and she never knew it.

    Reply
    • Addison Cash Chattanooga Cheapster April 28, 2014 on 7:39 pm

      Howdy, fellow Tennesseean! Thanks for sharing your story. Unfortunately, it seems that may people have to work into retirement, and not by choice.

      Reply
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  • Alicia April 29, 2014 on 8:52 pm

    My parents are financially sound. In fact they sound very mustachian in that they actually increased the value of their portfolio this year even though it was the first year of their retirement (59 and 63). I wouldn’t usually know that but we’ve started discussing that kind of stuff now that I have a career and was asking about investing.

    They are in the recess of worrying about my paternal grandmothers finances since she is a widower for the past 15 years and has health concerns. I don’t think I will be concerned for my parents until they are much older, but I can understand your point.

    Reply
  • Jeff @Project Ikonz April 30, 2014 on 11:59 am

    Yes my parents finances is my business because when they retire, its gonna be mo who will pay for their lifestyle. We children should be concerned about our parents because family is family and can only trust family. I always keep a close eye on my parents retirement options. Especially now that their getting past 55 years old.

    Reply
  • Kim May 1, 2014 on 12:14 am

    My parents don’t share information with us. They have always said we didn’t need to worry about it. My sister and I have tried to get them to consider a trust or at least give us a list of all their accounts but no dice. I assume they are in good shape, but honestly, who knows? I think it’s great you are getting involved. Nothing would be worse than retiring to realize you don’t have enough money.

    Reply
  • Kassandra May 1, 2014 on 10:02 pm

    My mom is in her late seventies and I now manage my mother’s finances 100% since my stepfather passed away last year. I created a monthly budget for her and we go over the amount that she gets every month. She loves it and I am able to squirrel away more money for her in savings because of the closer watch I have on her spending. There has to be a high level of trust given by the elder in the situation and that the child is not going to abuse that trust.

    Reply
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  • aline strong May 3, 2014 on 11:17 am

    As a relatively new retiree, here is what worked for me. A year before I retired, I categorized my spending and reduced most categories by 25%. At six months before I retired, I reduced them another 25% which matched my retirement income. Staging in the reductions made it much easier. But, I made sure there were categories for Vacations, Meals Out, and Entertainment. Even a little bit grows over time. And these fun things make life worth living.

    As for getting involved in your parents’ finances, reading all the comments, it sounds so much like parents worrying about their kids. It’s sweet in so many ways. But, the best advice is usually simply sharing what you do, offering guidance if they are open to it, and leaving changes up to them. They are adults. Adults accept the consequences of their actions.

    By the way, have they given you Power of Attorney should they become unable to handle their financial lives? That’s a safety measure.

    In the meantime, right now, you can pray for them to see clearly. And ask God to give you the words in any conversations with them around money.

    Reply
  • Kim May 3, 2014 on 9:21 pm

    It is a hard to begin the conversation with the units. I just talk about their retirement causally in the hopes that they will feel more comfortable talking about it with me. They are planning to work until full retirement at 65.

    Reply
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  • DivHut May 12, 2014 on 6:52 am

    Unfortunately, I can relate to this post all too well. My boomer parents are basically at retirement age with very little to show for it. They have some assets but not nearly enough to sustain them through 25 or 30 years of retirement. When trying to offer an opinion or advice it often falls on deaf ears. Still between myself and my bro we are trying to encourage them to manage what little they have and maximize their savings.

    Reply