If You're a Parent, Don't be Like My Parents

My father always brought home a good salary from his white-collar job, so when I still lived at home my family lived a comfortable life. Then my dad got sick and his income went from barely enough to support the family's lifestyle to the little he got for disability.

Even though he has saved up a sizable amount in retirement accounts through the years, between himself and my mother there's $1 million in an IRA available to support them for the rest of their lives. That sounds like a lot of money, but at the rate they spend, it isn't.

I made my mom sign up for Mint about a year ago, just so I can start to get a picture of their finances. It doesn't include all the income they're getting through disability and other monthly funds, so I'm not clear exactly how much money they have, or how much they will make in the coming years. Maybe they have tons of money and I just don't know where it all is or where it will come from.

On Mint, I looked at their spending for 2009. Right now it's at $160,000. They paid off their house (though I think might have a home equity line of credit they're repaying now) so that's $160,000 for two adults and one semester of my sister's college tuition, room and board. Yikes. I'm sure with my dad's health condition there are some costs in there that are necessary, but health insurance pays for a lot of those fees. My mom has no idea how to budget (my dad doesn't either, but he's generally better at not buying lots of things at once that he doesn't need) and I'm worried about her having enough money for her "retirement."

What's really making me boil is how my dad paid for my sister's tuition with his credit card because he is about 3 years behind on taxes... and can't get the home equity line of credit at 5% interest until he finishes all of this. So he put the money on the credit card, which has a $7000 balance on it right now. They've already paid two months of interest on that, and it looks like there will be more. At the very least, I know my dad used to always pay off the credit card bills every month, so it really makes me sad and frustrated to see that they are paying the credit card company when they don't have to be.

In one year at least they'll have access to the IRA money... but even that $1 million won't be enough for them. I showed my mom that if they spend $200k per year that $1m will last 5 years (maybe a bit more with interest, but not much more.) As I said above, they do have some extra income... disability, a pension, etc. I think for now they're taking in $6k a month, but I'm not sure what that will be after my dad dies of his cancer. That's when the shit is going to really hit the fan. And I'm going to have to try to help sort it all out and wipe it all up.

Now, I've written before about how my dad worked his whole life wanting to build wealth for the family and pass some on to his children. It frustrates me that my mother sees no reason to save any of the money he earned for her kids. It's hard not to be biased in this because I'm his kid and I'd benefit from this, but it's a bit sad that he saved so much money just to have my mom spend it all on QVC. I'm not counting on her leaving anything to me later in life, and I shouldn't, but I just grew up being told by my dad that one day there'd be money left for me and my sister. I didn't know how much, but my dad always has laughed at my current preoccupation with investing in my retirement, as he says there's enough money coming from him to fund that. Yea, right. That is all going to be spent. Which is fine, I just wish my parents would spend it a little wiser... not thousands of dollars on a cleaning person who overcharges them and on credit card interest, etc.

At least I am making my own money and have my own accounts now. I don't know what help I can be to my mother until my dad passes away. That's an awful thing to say, but it's true. My dad is so controlling about the finances and doesn't like to talk about them. He refuses to pay any bills online and won't let my mom pay the bills so they're often late and he just pays the late fee. It's all so ridiculous.

I can't wait to be a parent, and to have the ability to teach my kids about personal finance from a young age and practice what I preach.

For a man who spent his life planning pension plans for companies, my father sure needs to learn a lot about money.