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Personal Debt Wrangler – Had my money head in the sand – but no more!

Family Matters – How Does Your Family Treat Money and Debt?

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How Do Your Family Members Treat Money and DebtI wrote recently about some key contributors to our debt journey, acknowledging that my worst fear was the impact it was having on the ability of my adult children to manage their finances responsibly and proactively.

The Early Days after Debt Acknowledgement

My oldest is the most frugal of all of them, and has been quite capable of managing her finances well, (mostly) without my help.  In fact when we first acknowledged our debt crisis, I was quite overwhelmed and anxious.  I found it anxiety provoking to even log into our bank accounts or credit card statements on line!  Can you believe that?  She gave me some sage advice suggesting that I just start with one of them, and log in every day, until the anxiousness subsided.

Later I added logging in to see my credit card balances to my routine, and soon I was creating budgets on excel and living and breathing our financial numbers until I was bleary-eyed.   The new found financial good habits, for me, had begun.

More than a year later, after that initial shock, I had built up routines and coping strategies and I began to talk more openly about our finances with all of our children.

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Good Personal Finance Habits

Even though I knew my oldest was probably in the best position, I still wanted to satisfy my curiosity urgent need to know exactly how they were managing things.  Were there any things they were not doing or neglecting that, after twelve months of debt wrangling, I might be able to offer advice on.

She assured me that they had all of the following in place:

  • An emergency fund of cash equal to about 3 months of expenses.  We discussed the merits of having up to six months of expenses.
  • Fully topped up TFSA’s (Tax Free Savings Accounts), for both her and her husband.  This equated to about 40K at the time, more than enough to be considered the additional component of their emergency fund.
  • Regular contributions to their RRSP’s to obtain the maximum company match.

I also knew that she had good frugal habits in place such as:

  • Managing household expenses by minimizing hydro use (her husband always jokes that he walks around in the dark half the time).
  • Selling unwanted stuff on Kijiji to make a few extra dollars from household clutter.

More recently, they just moved into a new home, and I helped them do a few different sensitivity analyses for the mortgage repayment.  I use the following Canadian Mortgage Calculator (from Vertex42 – can also be used for US, see note below (*).  We created the following worksheets by making copies of the master and tweaking the variables:

  • To illustrate the impact on total interest paid and final payment date of switching to accelerated bi-weekly payments from monthly mortgage payments.  With accelerated bi-weekly, you pay half of your budgeted monthly mortgage amount exactly every two weeks on the same day of the week, thereby fitting in 26 payments a year,  instead of 24 if you just paid it twice per month, or 12 if only once per month.  Your payments are less if you pay biweekly, but the biggest savings comes from taking your monthly payment and dividing by 2 and paying that every two weeks having the equivalent of 13 months of payments (26/2) instead of 12.
  • We also wanted to see the impact of making prepayments, both annual of $3,000 plus an extra bi-weekly payment of $50.  These prepayments come right off the principal.  (Note:  You need to check the terms of your mortgage with respect to prepayments.  There is often maximum annual amounts.  Some can be made at any time and as often as you want throughoutt the year, some can only be done once per year at or near anniversary date).

canadian-mortgage-calculator_options

  • The compound period for a Canadian mortgage is semi-annual, but this calculator can also be used for US mortgage calculations by changing the compound period to monthly – the main difference between a US and Canadian mortgage.
  • They are planning to following the final option in the chart.  If they can save make an extra $50 payment every two weeks and save to make a $3K payment every year, they will reduce their mortgage term to just over 16 years.

My son lives farther away and seems to be pretty savvy.  I’m pretty sure he’s paying off his credit cards each month.  I think his student debt is fully paid.  I believe he is also saving for a down payment for a house.  Other than that, I don’t know much else.

I offered him help to prepare any budget spreadsheets answer any questions he may have in order to ensure his financial house is in order.  He hasn’t taken me up on it yet, probably because when we see him we don’t really have time to spend on this.  But he knows I’m ready any time, even if we do it on a web session.   I can always send him the spreadsheets to fill out, but something tells me that it’s easier more valuable if Mum is there to ask the savvy questions and keep it interactive!

  • One of the drawbacks though, is that if Mum does all the work, they may be less likely to keep it up or track their spending going forward etc.

I wrote on Worth-it-Wednesday, how about how my #3 surprised me about paying off her student loans.  She was on my list to work with next, because I really wasn’t sure how she was doing, what with a recent humanitarian trip to Haiti which she paid for herself (she’s a nurse).   I think maturity is helping here because I see her being more frugal like her older sister and brother.  I think she now has a sense of how good it feels to be debt free (well, since last weekend   ;)  ) and she seemed pretty, pretty happy about it!  Bazinga!

Bad Personal Finance Habits

I’m not really sure where to start with #4 so I’ll just dive in.  She doesn’t have a lot of income because she is on disability due to here severe OCD (Obsessive Compulsive Disorder) and social anxiety.   Her OCD is the germaphobic / cleanliness type so she’s always buying new products to keep her body and her bathroom clean.  She also discards (or gives to me or my husband digs it out of the garbage) shampoo or makeup that she feels has sat around too long and has become contaminated.  She goes through toilet paper and paper towels like there’s no tomorrow (note to self:  buy shares in Scott paper).  Plus, I think she tends to try to soothe herself and her symptoms by shopping on-line.  The UPS truck is often stopping at our house and makes me feel annoyed.

She used to pay us $300 / month for room and board, which was okay because it covered her expenses.  Lately she renegotiated her payment because she felt she was paying too much and said she wanted to save her money.  I wasn’t too keen but it was becoming a bit of a bone of contention and I gave up the battle out of resignation, I guess.  She had calculated how much she consumes in hydro, paper products, water etc. and thought that $190 was sufficient.  Only I have yet to see any of that money for two months now.

Am I frustrated?  Damn right I am.  Is she taking advantage of us?  Maybe.  Am I going to do something about it?  I will, I’m just too tired to fight with her about it right now.  We’ve been going through this for seven years.  Her symptoms became visible to us at age 14, but really severe at 17 and she’s 24 now.  She acknowledges that she had OCD symptoms since about 5 years of age (touching compulsions, scrupulosity, bad thoughts).

It has been really bad.  Think worst case.  Ya, it happened.  Every parents nightmare.   Well I guess worse case would be if she wasn’t here anymore.  She tried twice.  So I always have to remind myself that as bad as it is, it could always be worse.

Anyways, I just wanna OCD break right now, so I choose not to deal with it.  Probably a bad move on my part.  I think dealing with her OCD has also played a factor in our debt load.   Many trips to hospital, parking, eating out, buying things she needed, shopping to try to feel better, taking trips to get away from it all.  When it gets really bad, your spending becomes an afterthought.

We still have bottles of bug killer in our hall closet that my husband bought last summer when she insisted there were bugs in her room, even though we couldn’t find any evidence of them.   (Ya, I’m frustrated too because he never took them back after she didn’t use them and used something else instead to kill the invisible bugs so now $30 – $40 of chemical bug killer still sitting in my front hall closet).

I’m not looking for sympathy.  But there you have it.  Another excerpt on my personal debt story.  I count my blessings …  still.

I was going to also talk about my sister and how they are treating their debt and spending but this post is entirely too long so I’ll keep that for another time.

Plus this post is getting to be a bit of a downer and I don’t like being a Debbie Downer (even though Debbie Down was my nickname as a kid), so let me end on a positive note and with a joke.

Positive note:

I was initially inspired to write this post by John at Frugal Rules when he wrote Why Financial Literacy is so Important to Me.   He says it’s his responsibility to teach them to be wise about their financial decision making and I couldn’t agree more!

This pair of ducks were coming to our pool in spring for about 10 years - this year they didn't return

This pair of ducks were coming to our pool in spring for about 10 years – this year they didn’t return

An oldie but goodie:

A duck walks into a bar and asks, “Got any gwapes?”

The bartender, confused, tells the duck no. The duck thanks him and leaves.

The next day, the duck returns and asks, “Got any gwapes?”

Again, the bartender tells him, “No — the bar does not serve grapes, has never served grapes and, furthermore, will never serve grapes.” The duck thanks him and leaves.

The next day, the duck returns, but before he can say anything, the bartender yells, “Listen, duck! This is a bar! We do not serve grapes! If you ask for grapes again, I will nail your stupid duck beak to the bar!”

2 bunches of grapes by Grant CochraneThe duck is silent for a moment, and then asks, “Got any nails?”

Confused, the bartender says no.

“Good!” says the duck. “Got any gwapes?”

 

“2 Bunches Of Grapes” by Grant Cochrane from http://www.freedigitalphotos.net

   

Author: debster

I am a fifty-something wife, mother and new grandmother, who admits to having their “head in the sand” about their financial situation until amassing $247,500 worth of consumer debt for a total debt of $393,500. We've paid $121K in 2 years with four more years to go. Join my journey at debtdebs.com sharing ideas and motivation to all those coping with poor money management and bad debt decisions.

42 thoughts on “Family Matters – How Does Your Family Treat Money and Debt?

  1. I really have to admire parents that have children with disabilities. I can’t imagine how incredibly difficult it must be. On one hand, you care a lot, but on the other, you want them to grow up and not have to cater to them 100%. I’m almost the same age as your daughter, and my mom agreed to take $100/month for rent! But I always paid her on time, and I paid for anything else she needed. Not seeing any money for a few months is disheartening. You don’t want to think you’re being taken advantage of :/. I’m glad that all of your other children seem to be doing well, though, and it’s nice that you’re eager to impart your knowledge to them.

    • Thanks for your caring thoughts, EM. When the going gets tough, I remind myself that God gave her to us for a reason. I do pray a lot about her though, there’s no doubt about it. Your parents must be so proud of what you are doing on your financial journey!

  2. You need to get that daughter of yours to straighten up. If she does not want to pay you 30% of her income, out she goes. Plain and simple. It doesn’t matter how much she costs you, that is the going rate. She gets a lot more than and board.

    Renting to relatives can be a mess, especially if they have low credit scores.

    I kicked a woman out with stage 4 terminal breast cancer who dies 6 month later. Do I feel bad, Not that I kicked her out. Too bad about her condition, but she wasn’t worried about me and my home and being able to pay my mortgages.

    The cancer is way worse that some made up OCD disorder…. What did they do since the beginning of time for it?

    • Hi Eric

      I have to defend my daughter, because clearly you have not experienced something like this in your life. It is not a made up OCD disorder. It is very real and very debilitating to her (and to us).

      Now having, said that, it is true that the condition can cause the sufferer to engage family members such that the family members actually enable the condition (support it) without realizing it. The person with OCD can be quite manipulative. We are well beyond that stage. We know not to enable her and when to call a spade a spade. It’s difficult to do sometimes, but we live with it and do this constantly.

      Basically OCD is a life sentence that she has to learn to manage. It’s not going away, but it can be tamed. It takes incredible fortitude depending on the severity. Her’s is classified as severe. She has not finished high school, cannot hold a job and pretty much has no friends except for family members and a few she has met on-line. She rarely hugs us. We worry about her future.

      She is caring, kind, smart, mature, loving and pretty young woman. She does not deserve this, nor do we. I have to think, hope and pray that she will be able to manage her OCD so that she can finish her education and get a job. She takes one course at a time right now, through correspondence. Sometimes she succeeds, sometimes she doesn’t and has to restart the course. She wants to get into the veterinary field. She loves animals and nature.

      So we continue to support her, but do not want to enable her OCD. This means that I will have to ask her to start paying us her room and board soon. I think she is trying to save up to get an apartment and move out. This would be very difficult for her on her limited income. I may have to get creative and ask her to pay us and we will keep the money aside for her at a later date if she reaches her goal. We could use the money, no doubt about it, but I don’t want to discourage her from moving towards her goals to become independent. It’s a delicate situation and needs to be handled carefully.

      Cancer is not worse than OCD. They are both awful diseases. We have experienced both in our family. Both can lead to premature death. I’d like to suggest that you would benefit from learning a bit more about mental illness to broaden your knowledge.

  3. It must be very hard for you and your youngest daughter. I briefly roomed with someone that had OCD and an anxiety disorder, it was not fun.

    I’m not sure how having cleaning OCD and being around animals will mix, but I wouldn’t want to discourage your daughter. Maybe she can find a vet that would let her intern, or an animal shelter where she can volunteer.

    As for my own family and their finances: My dad is extremely frugal, so my parents are fine. I don’t agree with my sister’s financial choices, but neither of us enjoy the conversation when I sound judgmental, so I don’t talk with her about it anymore. My brother has some school debt and a car loan, but he’s making enough – and responsible enough – that I’m not worried about him. My cats, on the other hand, are deadbeats – they lay around my house and eat me out of house and home. They’ve been unemployed, except for the occasional photo contest, since I’ve known them, and I’ve never been able to collect rent from them. :P

    • Thanks, Amy! Definitely it is hard for her around the animals. She actually let someone adopt her chinchilla when she was around 15 because she couldn’t care for him anymore. The key is if she can keep the OCD monster at bay, then she can touch and be around animals. She loves them a lot. It’s very strange the dichotomy. She loves them but can’t touch them.

      Thanks for sharing your family finance rundown. The cats are the worst freeloaders, aren’t they? LOL ;-)

  4. Hey debt debs! Sounds like some major challenges you’re facing, but your attitude towards all of this is incredible, particularly your gratitude for what you have. Such a hard balance wanting to offer love and support, but trying to help her change at the same time. I’ve seen something similar with one of my relatives, but without the additional burden of a real mental illness. Just keep focusing on the things you can control, and keep setting the great example that you are!

    • Very uplifting comment, Jason! Thank you for that. It’s definitely a balancing act, one we never can perfect, but you are so right about focusing on what we can control. Have a great weekend and thanks for stopping by!

  5. Thanks for sharing this very personal post with us Debt Debts. I can imagine that you must have gone through (and continue to go through) some very difficult times with your daughter’s condition. You’re a wonderful example of supportive parenting! Are there any kind of alternative therapies which might help to control your daughter’s OCD? I hope that things improve for her and that she will succeed in completing her education.

    • Thanks for your supportive words, Hayley. The best treatment for OCD is CBT (Cognitive Behavioural Therapy). It is about exposure to the fears and trying to stay with the anxiety until it eventually subsides. With repeated exposure, the anxiety goes away sooner and the patient can increase the exposure to more threatening things. You start out with lower level anxieties and work up. She has done this under the guidance of a psychologist and it has helped. However, if she does not keep exposing herself the anxieties eventually come back again slowly. It’s very insidious and covert, that OCD. I don’t know if it’s because her OCD is fairly severe that she cannot get the OCD monster to shrink a lot or not. She’s fairly motivated, so I don’t think that’s the issue. She probably just lets her guard down and it creeps back up. Whenever she does or says something that is not ‘normal’, I remind her that is OCD talking. She has taken medications over the years, but has not found these to help significantly, maybe only take the edge off. She prefers to tackle it with CBT, she just needs to continually push herself to do this. We can’t do it for her (unfortunately!).

  6. Deb, I sympathize with you for your daughter’s situation. Mental illness is so difficult to manage and it is worse for the family members who have a front row seat to the struggle’s of those that they love. My son has ADHD and we were fortunate to have him diagnosed at 5 and we have been working on it for 8 years. It will always be a struggle for him to concentrate and complete tasks and he has a lot of anger due to these frustrations. It would be so much easier to have this as a parent rather than watch your child struggle. That being said, you are doing a great thing for your daughter and hopefully the money thing will figure itself out. At least you don’t have all four kids back home with you. :-)

    • You are so right, Shannon, that it is hard to see our kids struggle. I’m sure you do everything you can to help your son with his ADHD. But at the end of the day, they need to develop the coping strategies to help them with day-to-day living and to achieve their goals. Thanks for sharing your story with me :-)

  7. Debs, Great post. I was planning on talking (at some point) about how my family’s money habits have affected me. I have a younger brother who has no idea about money or paying bills. I was also going to talk about this (again, at some point). But nothing I have to say about my family is as raw as this. This took courage to share and I’m so proud of you for doing so! Please keep us updated with how this situation turns out. I sure hope she can manage her OCD and fulfill her dreams of working with animals.

  8. Deb, I think your children are fortunate to have a mom who is looking out for them not only emotionally but financially as well. I have no first hand experience dealing with a child or a sibling with any type of disorder so I can only imagine your stress levels must often hit the roof. As you pointed out, you’ll need to have a tough conversation with your last daughter concerning her finances and the amount she contributes. But if you are not ready to take that on at the moment, then don’t. In some situations there is a time and place to deal with things like this and you need to be ready for it. I wish you and your family the best and I appreciate that you shared this post!

    • Thank you, Kassandra! I don’t wish this on anyone’s family but always try to look at the bright side. Now that I’ve put this out there, I can share any positive developments that occur.

  9. I’m sorry that’s really tough. It’s pretty wild how children can be so different. I have a lot of crazy in my family, I think we all do. Talking about it always helps me.

    • Thanks Stefanie! Turns out my older sister remembers my Grandmother having some OCD tendencies, so yeah. Hey you got your little avatar to show up! Alright!

  10. Very sorry to hear about the troubles your youngest is facing, that sounds terrible for both her and you guys. My father was terrible with money and my mother was frugal but an ostrich when it came to the finances, when my Dad died in 2009 he left my 59 y/o Mom with $75K LOC and $90K mortgage and she only works part-time. Needless to say, she’s been having to be extra frugal to pay this down and I’ve been finding this inspiring but also a cautionary tale that even in a good relationship, you always have to pay attention. I do hope you and your daughter can come to an agreement about living together reasonably.

    • Thanks, Morgaine, and thanks for sharing a little bit of your story. I’m sorry about losing your Dad so soon! That must be quite a struggle for your Mom. It will probably take her at least 10 years to pay that off if she works part-time. I do hope your Mom is getting closer to her goal. God Bless Her – I’ve said a little prayer for her today.

  11. It’s so important to talk to kids about money (early and often). I’m very thankful that my mom and step-dad are good money managers who taught me from a young age to save and only buy things you can afford (too bad I didn’t listen to them when it came to student loans-live and learn). I’m a clinical social worker and I work with people diagnosed with severe and persistent mental illness on a daily basis. OCD and anxiety can be debilitating on their own, but to have both together is really challenging. I hope that your daughter and your family are getting the help and support that you need. Unfortunately, I work with all adults and most of whom became homeless because they had no family support :-( Hang in there!

    • Thanks, KK, I appreciate the kind words of encouragement. Great that the concept of saving and proper spending were instilled in you by your parents. You were able to apply this discipline towards tackling your student loans, no doubt. :D

  12. Deb, it sounds like you have a lot to be proud of when it comes to your kids! Sounds like they’re very responsible with their finances. I feel for your youngest daughter and for you, because OCD can be so debilitating. I’m sure it takes a toll on the whole family. Hopefully things will get better at some point.

    • Thanks for your thoughts of better times to come, Lauren! I’m pretty happy with how the kids are doing with their finances, all things considered.

  13. I’m so sorry to hear about your daughter’s situation. A person that has an OCD (Obsessive Compulsive Disorder) and social anxiety is quite very difficult. Hats off to you, that you really support your daughter.

  14. What Eric said was harsh! Geez! Anyway, the only one tiny thing I do agree with him on is that she should pay rent, but I don’t know how her condition would affect her having a job…does it? If she is able bodied enough to work, then she should be able to pay rent. If not…then I’m not sure what the solution is, and I’m sure it’s been very difficult for you. :( I don’t feel comfortable offering suggestions really because I’ve never experienced that myself. I really hope it all works out!

    • Thanks, Tonya… I had to defend her like a Mama bear protects her cubs because of the extent of her illness. I agree wholeheartedly she should pay rent. She has not been able to sustain a job. She receives a subsidy because she is considered disabled and under psychiatric care. It’s not a lot, well below poverty if she had to live on her own. But even so, she should pay a portion, perhaps 30% like Eric suggests, to us for her living expenses. She does pay for some food that she wants herself out of her own pocket.

  15. My heart goes out to you Deb. We have a close family member who is very close to how you describe your youngest and it can be tough. That said, I know it is likely that much tougher having her live with you and being your daughter. The sad fact is that too many parents give up which can only make things that much worse. However, you’re doing what’s right for your daughter and hopefully the financial aspect will work itself out. Thanks for the mention, glad I could be an inspiration. :)

    • Thanks, John, and you are so welcome! When I saw those little innocent faces on your post along with your words to support now important this is to you, I knew that I would need to write my own story on this some day. As I said in the post, I wasn’t looking for sympathy, but wanted to provide an explanation about my kids and how they treat money and savings and debt and how it impacts us or not. Even so, it is what it is and I really do appreciate the kind sentiments provided by my readers.

  16. I can’t imagine the stress you’re under with your youngest. Does she buy her own food? What is she spending all her money on? Even on disability she needs to know something might happen to her that isn’t covered (even in Canada) and she will need money set aside. All I can say is good luck. As much as you love her she’s 24 and needs to be standing on her own two feet even if it’s paying you the rent!

    • You’re right, Catherine. This is all very true. We plan to discuss it with her this weekend. She spends her money on organic food, vegan food, body wash products etc. – usually products that are quite expensive. She orders a lot of stuff on line too.

  17. I think you’ve been doing great in your debt pay off journey. Sticking to the plan for that last 2 years is a huge accomplishment. You have made great strides. Now that you have been so brave to share your personal story it’s even more encouraging because we know it has not been easy but you are demonstrating that it is possible to get out of debt in difficult situations. I wish you continued success in your journey.

  18. I have had friends with severe OCD and I know that it’s a real thing and it’s serious. I understand your situation and sometimes life is just tough like that. My children are young so we are still teaching, but I see the financial issues with my siblings. It’s so hard to not scream at them for the ways they handle money.

    • Oh wow! You got some siblings with financial issues too, ay? I can really let it worry me but my husband says to let it go. Easier said than done, but I do try. I’ve got enough on my plate. LOL

      • I agree, easier said than done, but I have learned to cope with it. The worst is when they tell me they want my help, but then I feel like I am hassling them to actual help with their finances, because I have to keep reminding them that they need the help! lol

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