Adult children helping financially strapped parents

Hi Pete,

I have a question regarding finances, but not mine. It is in regard to my parents.

My parents have been financially strapped for years. When I was growing up my dad was unemployed for a few years, and when he wasn't my mom was. This led to multiple large unexpected medical bills and daily expenses being put on multiple credit cards, just in an attempt to stay afloat. On top of the financial stress, they were raising two boys, my brother with Down syndrome.

In October, they thankfully sold the home I spent my entire life in, and are in the process of purchasing a smaller home (currently staying with my grandparents). They've told me on multiple occasions that they are sorry for what I will have to deal with (financially) when they pass away. It's almost as they have given up. There are honestly fewer things in life I want more than to see my parents be debt free, at least working towards it. I don't know the stage of their retirement planning, but I fear the worst. My dad just turned 62 and my mom is 56.

As the new year are approaches, I want to give them something that will help them get on the right track. If I was able, I would help pay down their debts. Unfortunately, that wouldn't be a good idea at this point in my life. I'm currently working on getting myself out of debt (car & student loans). I know finances are a very sensitive topic and at age 23, I know far more about their finances than I probably should.

Do you have any suggestions on how I should approach the situation? I would greatly appreciate any tips you have.

Chris

Thanks for your email, Chris. To me, it doesn't seem possible or prudent to financially assist your parents at this time. However, you both are dealing with the exact same issues, debt and a lack of emergency fund. This means you can work along side of each other to reach a resolution. Additionally, it seems as though your parents have run out of steam. This happens. When people are on the wrong side of the financial coin for years and years and years, they often get worn out. This isn't to say that they are weak. I don't know your whole story, but I would guess they just need to have a reasonable goal to shoot for that will get them back on track.

When people are crushed with debt, the unspoken goal is to "get out of debt." But there's no direction to that, no timeframe in which to complete it, and the goal ends-up being ineffective. Your parents need to write out all of their debts on a piece of paper, and start attacking the smallest debt they have. They need to stop paying extra on their other debts, and focus on the smallest debt. This will give them something to run at, and may re-spark their fire.

One other note. Jumping back into homeownership might not be the best idea. Homeownership has a way of beating down the beaten down.