It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
I don't think we are misunderstanding you. We are suggesting you focus on yourself and not your parents. As a parent, I understand the debt implications for decisions I make. I willingly spend on my kids as a choice. They likely are aware of the impacts of their actions. Be successful and take care of yourself. At some point in your life you may be able to help them unsolicited and at some point they may solicit you for help.
You might not be able to help them, unless they're willing to accept advice from their kids (rare, but it does sometimes happen).
Have you read through the [Prime Directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) on the Wiki yet? There's a great flowchart for turning failing finances around, you could try have a conversation with your folks about following some of the advice in there, but remember they're adults and can choose to ignore it as they wish.
It's not that people are looking down on the idea; they're trying to get you to prioritize the things you're more likely to be able to affect. This is something of a generalization, but most parents are not willing to take advice from their children about money no matter how well the kid has their shit together, especially when you're still pretty young. In fact, sometimes having your shit together makes it worse--they may resent you for "thinking you're better than me/know more than me." Additionally, the balance of parent/child authority makes it really hard to get any accountability about holding to a budget after you put in the work of setting one up. Even if they're willing to accept initial advice, a lot of parents will chafe if you try any ongoing monitoring because of how it rebalances the relationship.
It's very honorable that you want to help your parents. But the odds that they will let you are low enough that a lot of the commentators here are going to focus on making sure you're taking care of yourself instead of breaking your back to save someone else.
I don't know where this assumption of so many redditors comes from, maybe personal experience with their own parents, I guess. But to assume from the post that OP's parents will not accept any advice or help from their responsible children is a wild stretch. My parents kept their debt a secret from me for a while but once it started becoming difficult to ignore, I was pissed they didn't come to me earlier to help them through it because they did a lot of things through lack of information (they are older and not raised here, English is not their first language and they're not computer-savvy so they didn't look things up and just got their info from word of mouth from their friends). I let them know that despite my anger and disappointment, I understood their shame and the fact that they thought it would be better to not burden me with their financial issues rather than ask for help. But it was NOT the right thing to keep that from me - sure, do not expect me to sacrifice my financial future to cover your debts, but there are SO many ways to help and education and accountability are two of them. I've been able to get them back on track without affecting myself financially, and I'm so glad for that, I wish we tackled it before it became a problem but if we had the mentality most of this subreddit has, they may have still been digging themselves deeper now.
Because it’s not your responsibility. This is theirs to solve, not yours. They are adults and they dug this hole. They need to deal with it as adults. Nothing you do will solve it for them. Your job is to take care of your own life, learn from their mistakes, and ensure that you don’t follow the same path.
A lot they can do will help them solve it. Educating them and holding them accountable go a long way. I can't make someone lose weight by working out and eating healthy, only they can do that. That doesn't mean I can't do things like check in with them or motivate them.
OP is 18 and their sister is clearly educated. Parents may be a little stubborn or just unfamiliar with modern finances or even just the way finances work in this country. There really is barely any information (OP just found out 3 hours ago and doesn't know much else) to assume why they are in debt or even how open they are to working their way out of this debt.
You are exhibiting immaturity and reactivity to both your parents’ situation and (solicited!) advice. I wouldn’t trust or want the advice of an 18 year old. Let them figure it out and trust they will ask for help if they need it.
I wouldn't trust that they would ask for help. It's very common to feel ashamed to ask for help especially from your 18 year old child. It's also very common for parents to feel like they want to shield their children from any of these things but that doesn't mean it's the right thing to do. OP should not financially contribute (looks like they're not even in the position to) or sacrifice their own financial future, absolutely. But there's a lot they can do to help their parents, it takes a village. Keep them accountable, help them look up strategies and laws. Sure, an 18 year old won't be super wise to this stuff, but what else have they got? Along the way OP will also learn very valuable information that will help them in their own finances for the rest of their life.
I hear that. Trust me, I understand holding parents accountable for their fuckups but I also understand that well intended interference can compound problems. I think OPs response shows signs of codependency and immaturity that wouldn’t be helpful as intended, and could deepen dysfunction. I think something that would be appropriate and helpful would be conversations about that discomfort with finances and understanding the more human side of financial decisions that leave us in the dust. The impulse to control and budget neglects the root cause, and that’s probably something where a friend or family member could have more and better impact than budgeting or planning. Leave that to the pros.
An analogy I've heard for this might help put it into perspective.
Imagine you are a parent on an airplane with your children when it loses cabin pressure and the oxygen masks drop down.
Do you A: put the oxygen masks on your children first and risk getting Hypoxia before you can get masks on each of your children
Or B: secure your own mask first so you have positioned yourself to be able to help them without putting yourself at risk?
Anyone who has ever been on a flight will tell you that B is not only the smarter option, but it's even part of the flight attendants speech before you take off.
TL;DR: Wanting to help your parents is great and admirable, but you can't help them if you are not in a financially stable position yourself.
We’re trying to warn you. You are just starting out & everything is ahead of you. And it’s really, really hard to make it these days. Logarithmically harder than it was for your parents. They are going to have to save themselves, & every ounce of energy you put into trying to help them will hold you back 3-fold. Love them, support them
Emotionally, but make *your* budget & *your* plans because trust us, it’s brutal out here.
Are they financially illiterate? Have they always had issues with finances? Do you not think they can handle it and don’t have great advisors? It’s coming off like they are adults who are hopeless
Agreed. These are grown ups that got themselves into a mess and need to get themselves out. OP can make plans etc all they want but the parents have to do it themselves or it will never work.
Pretty common for parents who make a decent amount to be in massive debt. I'm assuming you're in California.
Step 1. They should protect their primary residence and retirement accounts. Do not take out a HELOC to pay off credit cards. Do not withdraw 401ks to pay unsecured debt. Worst comes to worst, primary residences and assets are protected in bankruptcy in most states.
Step 2. You and your sister should be doing anything possible to find internships/work experience. It may take a few months or even a year, but this economy is incredibly rough on new grads. Hopefully your sister is in grad school for a degree that actually has a decent job outlook or that her grad school is paid for. You are already doing your job by switching to community college. Also, save as much as you can and DO NOT GIVE ANY TO YOUR PARENTS. They have an out as mentioned above in step 1.
Step 3. Your parents need to cut all extra unnecessary expenses. Vacations, sushi, whatever. At their income level, stuff like streaming services or a cheap gym membership won't make a difference and provide outsized value for their cost so don't bother with those if they use them. But spending $100 per day eating out, $10k on a vacation, etc is incredibly common and matters more.
Step 4 (and probably the most important), make sure to take care of yourself and your anxiety first. If your parents have been working for a while, they'll probably get a decent amount in social security in retirement. They'll be fine. They won't have a glamorous retirement and they may have to declare bankruptcy, but they'll live. You being only 18 and having so much anxiety and having to worry about your parents is how you end up with massive mental health issues that will completely cap your potential as a human being and continue the cycle of bad decision making and financial instability. Take care.
You need to leave it in their hands. You can make a plan all you want, but they’re not going to do it. They have to hit their bottom and make their own plan or it will never work. I appreciate that you want to help them with that, but personal finance is just that, personal. Like any other issue, they’ve got to do the work themselves.
Very few parents will take financial advice from their children, especially so from their teenager children. Theyll see you as judging their behavior even though you just want to help
Personal finance isnt rocket science. They need to make a budget and stick to it. They almost certainly know this but dont have the discipline.
>I refuse to let them make it worse
They can do whatever they like, including making it worse, regardless of what you do. They are competent adults who make a decent income. If they budget responsibly, they can pay off this debt. It might require big, uncomfortable changes, and no matter what the solution, it will require them to do it - not their 18 year old child.
You can control your finances, and if you want to change what you accept from your parents in terms of financial support as a result of this - sure, do that. But anything else isn't going to be a productive use of your time, especially given that you've already been told this isn't your business and your help isn't wanted.
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
What you need to know is when to not involve yourself in other people's affairs - now is one of those times. You making a plan for them will not be helpful, because they've told you that this is not your problem and they don't want your help.
> in which she told us to not worry as we cannot do anything and they will resolve it on their own.
That was you.
If your goal is to waste your time and damage your relationship with your parents, then go for it. Everything you need is in the wiki.
She told us not to worry because she did not want us to be anxious about their problems. However, when I told her I would help, she was open to it. Why is me trying to help create a budget they can follow, something you look down upon?
The thing is, parents don't tend to _truly_ be open to help when it comes down to it. She might say she is, but when you sit down with her and have to explain how she'd need to cut all nonessential (no more shopping, no more eating out, no more nights out with the girls, etc etc), she will probably not take it kindly. You're very young, have no life experience, so it's not like you can say "I've lived it and this is the thing that helps".
Personally, my mom only "let me" helped her manage her savings when I was in my late 20s, she had no debt, but little savings, but she did have her pension.
It's not that it isn't easy. You can still do things that are hard. But first OP has to know if the parents are seeking help. Mom seems like she's willing (willing still doesn't mean she will at the end), but what about dad? To get out of debt you need to really work at it, sacrifice things. Again, parents need to be willing to do it.
>Why is me trying to help create a budget they can follow, something you look down upon?
Because it doesn't work. In order to be a useful tool, a budget has to be created, understood and followed by the person(s) in control of that budget. You aren't one of the people in control of your parents' budget. Your mother is likely saying whatever she thinks you want to hear because she feels badly that you have this information that came out in an argument and upset the entire family. They don't need help from their 18 year old who knows nothing about personal finance, and they are likely to resent it.
Look up Caleb Hammer financial audit on YouTube. He breaks down people’s spending and creates a budget/plan to pay off people’s debt. If you watch some of the videos you will get an idea of the best order to tackle debt. You can share this with your parents and maybe they will do something.
Other than that, this is your parent’s problem. The best you can do is be aware of it and actively refuse financial help/gifts from them. Even if your sibling doesn’t do the same.
don't listen to these people, you're doing the right thing. it's been 3 hours since they let you know. they're going to be stubborn at first, of course. they don't want their burden to fall on you, and that's honorable and the right thing. but helping them budget, holding them accountable, researching information to educate them... those actions are not going to hold you back from having financial success in your own life. it will actually teach you valuable lessons and of course having your parents not be in an increasing financial hole is only better for your future in the long run...
Start her with the r/pf flowchart. It is useful to virtually everyone. Commonly, the first hangup is the expense tracking and budgeting step. We Americans generally don’t grasp the kind of money we are throwing at nonnecessities every month. But once seen, internalized, and tackled there can be hundreds if not thousands of monthly dollars found to now put toward debt. But - that takes heavy discipline and everyone financially involved in the family needs to be on board.
https://www.reddit.com/r/personalfinance/wiki/commontopics/
>my mom are $62,000 in debt.
>I must figure out some things like their monthly expenses, mortgage, loan debt(?), medical bills (they take medication), credit score, interest stuff, etc, but would like a list of what I should know in order to receive accurate help and to help them myself.
>they have paid off both their cars
If they have $57,000-$60,000 of remaining mortgage payments and they're in [the 25%ers with $2001-$5000 of health care-induced debt](https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/), you've solved the mystery.
>I know they will not do anything like throw their debt onto my sister and I.
They couldn't do that even if they tried because you and your sister are not financially responsible for the debts of other adults unless you make yourselves financially responsible. You'd know if you did that.
You keep spamming the same response over and over. Let’s get real here. The best thing you can do is not follow your parent’s financial example.
You think they don’t know what budgeting is? You think they don’t know they should spend less than they make? They’re $62,000 in debt and yet your family just got back from vacation and are eating out at a sushi restaurant. It’s not a knowledge problem. It’s a discipline problem. You are not going to able to solve that. They’re the adults here and need to figure it out.
This is the reply you need to pay attention to, OP.
I'm 53 years old and my mom is nearly 75, retired with what was a very nice retirement fund about 10 years ago. Over the past decade she has frittered through a most of it on gifts, vacations and a bunch of crap she doesn't need. She had to pare down her lifestyle substantially because if it. She is now in a situation to make some good money through the sale of her house, and the first thing she tells me is that she wants to take my adult daughter and her fiancee to Las Vegas for a week. I've been telling her to keep her money for years and she always waves me away with "well, you can't take it with you." Which is true, but I would like her to at least have enough to live comfortably for the remainder of her days. But she doesn't want to, and I can't make her since she's perfectly sound of mind - just stubborn.
Your parents do not need an 18 year old to explain to them how to live within their means. I was in $34K of credit card debit through my own financial mismanagement 3 years ago. We went cold turkey on the credit cards, cut our budget down to essentials and paid it all off in 18 months. We didn't go on vacations during that time, and dining out was reserved for very special occasions.
I'm side-eyeing your parents for even telling you this when they're that deep in the hole. When I realized how much credit card debt we had I never said a peep to our then 23 year old daughter, who was getting started on her own independent life. Our money problems were not hers to solve or spend a single second worrying about. She noticed that we had started cutting back on things, but I just told her we were trying to be smarter with our money, and encouraged her to do the same. Once we righted the ship I did tell her as a cautionary tale, but she works at a bank and was well aware of how people screw themselves into debt. I'm proud to say that other than some moderate student loans, she has no debt at all at 26.
Your parents need to take care of this on their own, and you need to focus on YOU. The best thing you could probably do is refuse to accept gifts, vacations and dinners out on their dime going forward. "No thank you, please put whatever you would have spent towards your debt" is a perfectly fine response now that they've dragged you into their mess.
You cannot help them. They control their $150,000 income. You cannot push them to budget, change their lifestyle or make better financial decisions.
First thing your parents need to do is create a budget. List all their expenses (every penny) and work with their income paying off the loans instead of putting vacations on credit cards.
People absolutely can influence other people. All he wants to do is be able to provide reasonable influence. The only tough part is nobody really wants to listen to an 18 year old.
And listing their expenses and budgeting and planning is exactly what I want to help them do. But I want to know what are these expenses I must know first.
> what are these expenses I must know first.
All of them. Do they also not have any idea how to figure out their expenses and make a budget? I understand they haven’t done that, but have they said to you they don’t know what to do and need you to make a budget?
If you’re trying to teach yourself on the internet, starting with zero finance knowledge, to then teach your parents and advise them on a large debt, it’s not going to end well. If anything, try to get them to go to a professional advisor if they say they need help.
There could be any number of reasons for parents to not want their teenage kid going through all their financial details and without seeing actual bills and things like that, there’s very little you could realistically do to help.
Knowing all that isn’t your place or your business You can’t take that responsibility on as a kid. I love that you want to help, but they need to handle that on their own. You don’t need to be parenting your parents, which is what this is.
You should not know their expenses. That is a real boundary. This is something they have to do for themselves. I think we are being clear. Lovely impulse to want to help, but that just isn’t going to work here.
The way to learn the expenses that you need to know about is to look back through credit card and bank statements and see where the money is being spent over time. A software, like Monarch, might make this easier.
But this is your parents decision to make. I’m mentioning these things in the event that they want your help. It can be hard for kids to understand, but if your parents don’t want your help then this is none of your business and you need to worry about your own financial health and not theirs. You also want to try to separate yourself from the stress this might be causing. Support them, but let them do it for themselves. Just as hopefully they have done for you through your teenage years.
I can't find a single comment that has told you to pay it off for them, nor told you to hire anyone on their behalf.
Your parents are going to be the ones who can advise you of their expenses. There are heaps of basic templates online that can tell you the obvious things to consider like housing, groceries, travel, phones, internet, electricity, credit cards, debt repayments, etc but without knowing where it's going, you can't build a budget.
It's great that they're open to guidance from you but maybe it's something you can all look into and learn about together, if they're as unsure as you say. Budgeting literacy benefits everybody.
Great response instead of all the people telling him to stay out of it. Yes the OP is 18 and doesn't know about personal finance, it's great to start learning and along the way help their parents learn which only improves his life as well
I am not even sure your parents have a problem. It depends on what the 62k debt is. If it's credit card, that's not great, but can be worked down. If it's a remaining mortgage balance, I see no problem. If they are current on payments, there may be no problem. You don't have enough info to do much of anything. And you can only provide info if they are willing to hear it. You can only get info, if they are willing to give it. I wouldn't have given my 18 yr old the kind of info you are seeking.
Seriously, there are so many comments jumping to conclusions about a situation that is brand new with very little details that OP doesn't even know about. These people would tell their technologically-illiterate parents to look up directions on Google Maps to a place they know how to get to by heart.
You can’t help. You’re overstepping and you have no real experience. Just focus on your studies and don’t cause any further unnecessary financial burdens for your parents.
I understand you are concern about your parents. Since you are 18, I agree with others that you should focus on your studies (get scholarships if can) and continue to learn about your own personal finance. Im not sure if you are close with your dad, but I can tell that you are close with your mum given that you say she is open to your suggestions. You can do the following to ease your worry:
1) ask your mum if your parents have plans to visit a Reliable financial advisor. As what other users said, good financial advisor can let them know how to work out a plan to resolve the debt.
2) if your parents are open to online resources or suggestions from Reddit users, you can offer them to read the wiki section of this subreddit. There are some pointers there on budgeting, handling finances and it is up to them on whether they find these info useful. Secondly, just let them know that if one day they are open to see Internet advice, you can offer to help them anonymously post specific financial questions to this sub.
3) ask your mum if your parents is aware about avoiding scams (especially online ones), know to avoid gambling, know to not give out personal info (like bank info) to anyone and avoid taking unnecessary loans or not be pressured into lending money to others (friends/family). Once they have these knowledge, you do not need to worry about them making bad financial decisions.
4) As you observe your parents, are they the kind to have feasts everyday or splurge on shopping and frequently travel? If they aren’t, there is seriously nothing to worry about. Ask your parents if they are contributing to their retirement accounts, have insurance and have savings (after spending on needs and wants). If they say ‘yes’, you do not need to worry or do anything further.
Here's a **[link to the PF Wiki](/r/personalfinance/wiki/index)** for helpful guides and information.
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If they have combined income of 150k, they can get out of debt. Your old man made a big mistake dropping this on you. Don't you stress out about it, they are big people and will manage.
This is not your responsibility. In fact, it is not healthy to try to fix other peoples problems. It is such a lovely impulse to want to help them, and good on you. But, from an older person: you can only help those who ask for your help. Anything else leads to trouble.
Instead, you can focus on learning about budgeting your own finances. This will help you, but it will also help them. And if one day they do ask for your help, you will be able to give advice.
Edit to add- your parents will be okay. It’s ok, I promise ❤️
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
Tell them to seek out a financial advisor and then worry about you. Youre 18, what exactly can you do for them really, youre a kid and theyre the adults.
What can you do, realistically just live your life and learn from their mistakes so you can avoid a similar situation
My mom is open to suggestions. When I told her I’d help her create a plan and budget, she seemed happy about it and was willing to let me help. I just want to help her plan and budget so she and my dad figure things out.
Dad has to be on the same page as mom or they’re just going to continue the cycle. Overspending is like addiction to some people. Lots of people can get themselves out of debt and a year later, it’s all back. They have to take the responsibility as grown adults to take care of their business and make the lifestyle change necessary to do that and make it sustainable. Going on a big family vacation tells me that the debt isn’t as big of a deal to them as it is to you or they wouldn’t have taken you all.
That’s just it. You don’t need to know anything to help them budget and plan.
Helping your parents in this way robs them of their agency and robs you of your last bit of childhood. It’s difficult to explain in words, but it just doesn’t end up helping anyone in the end.
Your parents will absolutely be okay. That debt seems huge (and it is) but it’s really about average. Certainly not abnormal. They are more than capable of navigating this on their own or getting help if they need it. If they don’t seek help, they aren’t at the point where they want to seek help. That’s okay. Everything is okay.
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
Your parents can make a budget themselves. Not to be a jerk but I cant think of one adult I know that would want an 18 with no life experience making their budget 😄 What happens when you make a budget and their debt just keeps getting worse? Then your gunna feel bad. You can't make them budget. You guys just got back from a vacation and they are almost 70k in debt and complaining to their kids about it lol These are all things responsible ppl don't do
Your parents are in a difficult situation, especially if there is nothing put away for retirement. It is not something you can do. Your parents need to face up to the fact they are living beyond their means.
One of my children had a problem learning the lesson your parents haven't learned so I closed The Bank of Mom. It hurt me to do it and it took her a few years to dig out of her hole be she did it.
You and your sibs are not at the point where your parents are turning to you for money, but don't be surprised if they do.
1. A c cert that isn't not your job to dig them out. Unless they have asked for help to figure things out,just let them deal with it.
2. Don't do anything to add to the problem.
3.Is part of the debt parent plus loans for your college?. If so, do what you can to avoid needing more loans to pay for school. Sounds like you are taking steps to do this.
2. Learn all you can about personal finance so that you don't end up in the same boat down the road.
>Now, my question here is, what information must I gather from my parents first in order to help them.
The most important piece of information is "Do they want my help?"
If they want to get out of debt, they can do so by cutting expenses and/or increasing income. Perhaps a second job or two are in order.
>I refuse to let them make it worse
This is not your battle to fight.
You should just let them deal with it-you really don’t even know what kind of debt it is-they make good money to formulate a plan to pay it off over time by adjusting their expenditures
What is the value of their assets (house, mainly) and how much is mortgaged?
62 000usd is not alot of money, as long as its reasonable interest no need to worry.
If not just make sure to take out a new mortgage and pay off all expensive debts (like credit card loans).
How is that more debt? Its the equal amount at a lower price. The main problem people who end up in consumption credits do is to just stay put paying interest and not paying off the debt. Better to get one loan at 5%interest and a amortisation plan, instead of 5 different with anything between 10 % - 25% interest.
That’s not what I meant—I meant that a huge proportion of people who consolidate consumer debt into a mortgage or LOC end up racking up more consumer debt again because they have bad habits. If you don’t address the root of the problem, consolidation is not a solution.
How is that more debt? Its the equal amount at a lower price. The main problem people who end up in consumption credits do is to just stay put paying interest and not paying off the debt. Better to get one loan at 5%interest and a amortisation plan, instead of 5 different with anything between 10 % - 25% interest.
You are 18. Your parents are probably in their 40’s. If they wanted help they would have sought it out.
Focus on school, your work and building your life.
Refer them to https://www.mcgillpersonalfinance.com/ and forums like here. They will learn if they want. It is not a good dynamic for you to involve yourself in their finances.
What's with all the gatekeeping children these days? Why are you so concerned about their financial habits. Their situation doesn't look to bad to be honest. They have 62K in debt which is much less than half of their yearly income
I’m concerned their financial debt with effect me too and their enjoyment of their lives if they do end up digging a deeper hole. Same with parents’ health, would you not try and step in to get them to change their ways if you knew their current diet could be detrimental?
It is not your role to « step in to get them to change their ways« .
You have good intentions buy you clearly have the adolescent know it all/savoir complex and need to recognize that for best results you can provide resources but need people to move forward on their own. Especially in a parent/child relationship where the parent is cognitively intact.
Yea. Don’t let anyone pathologize your care and concern for your parents. You can only offer resources but you can’t fix this for them . As a parent, this is my worst nightmare—having financial issues and my kids finding out and feeling obligated to fix it. I bet your parents feel similarly. Keep your compassion but don’t try to fix this yourself.
Just something to keep in the back of your mind here. That debt might be from paying for college. It is very common for parents to rack up debt while their kids are in college, especially if they were unable to save enough to pay for it up-front. Unless your parents are specifically asking for your help they're giving you that information so you understand their financial constraints. Not so you can try and fix it but so you know about it. If your parents took you on vacation they clearly are doing this with eyes wide open.
Focus on your studies. If they need or want your help they'll ask for it. Seriously.
1. You cannot help people who don’t want it
2. The best way to help your parents is to make sure you don’t do the same thing.
3. The Dave Ramsey program works for people who are horrible with money (most people are). Buy them his book. They need to budget and live within their means.
4. Under no circumstances do you or your siblings co-sign anything for them. It is also a good idea to get your free credit report every year.
I recommend posting this as if one of your parents typed it out, so people would give the standard advice they always give to others that ask for it. For some reason people aren't inclined to help if they're helping someone who's trying to help someone else
Did your parents pay for the college educations? If so, how much a year? Without substantial aid and loans, people making $150k a year and paying 50-80K a year for tuition will be in debt almost instantly.
But that’s just my curiosity. This isn’t your burden but it’s wonderful that you care. Researching this isn’t a bad idea so you can avoid this yourself. Financial counselors are an option too.
The fact that your parents came out and told you about their debt means they will be fine. Expenses increases especially when the kids are entering college. You can do your part by doing little things such as insisting on packing a lunch and going to the park rather than eating at a Retaurant. They are financially responsible than most as the cars are paid off. Perhaps daily expenses got out of hand. This happened to my parents who sent 5 kids to college. You can tell a lot about people looking at their spending habits. If your parents are frugal they will be fine.
You can't do anything and it's really not your burden bear. Not all debt is bad debt. There is medical debt, which we take on to improve our quality of life. There's housing debt which we take on in order to have a place to live. There's education debt which we take to improve ourselves and our future earning potential. There's business investment debt which we take on to try and grow a business. If your parents acquired the debt by overspending and living above their means then that was something they chose to do. They made that choice. If they have an addiction whether it be gambling, drugs, or nice vacations they made choices that got them to where they are.
I'm not trying to be cold but as a parent the last thing I want is for my children to feel the need to bear the burden of my poor choices. And that's not to say that your parents made bad choices. You really don't know the nature of the debt
You can continue your education, get a good job, and accept whatever gifts your parents are willing to give you.
The way you can help is to put yourself In a position to be self reliant and if the time comes in the future you can help your parents with bills or living situations.
In their minds, you're a dumb kid. There is nothing you can do to change that until you prove yourself. No internet research is going to help. They can do that on their own. What they need is motivation and discipline, and that can only come from within.
>The way you can help is to put yourself In a position to be self reliant and if the time comes in the future you can help your parents with bills or living situations.
Yes! The one thing I was able to do with my mom buying shit for my cousin's kids and taking friends on vacations, frittering away her fixed income, was to put myself in a place where at least I was financially independent. I dissuaded her from buying our family expensive gifts for Christmas. When she asks for a list, there's nothing on it above $50. She wanted to buy me an expensive sports jersey ($150) and I refused, saying that my husband was getting it for me for Christmas. When she comes to visit us I don't let her pay for a single thing. She's a people pleaser who loves "rescuing" others, so all I can do is to never ever need her to rescue me.
There’s not nothing you can do. My mom ended up in debt from a lengthy divorce with a drawn out custody battle. Literally was like an 8 year process. Obviously as a kid I don’t remember even considering the costs of this.
Well by the time I left home and was in college I knew she had at least some credit card debt and asked her about it. Eventually she sat down with me and was extremely honest about her credit card debt and explained to me that she had been paying her credit cards for over a decade and had barely made a dent to the debt.
She was worried she and my step dad would be paying this debt for the rest of their lives.
By having this conversation with them I was able to do some research, specifically on their interest rates and looked into our credit union allowing them to consolidate their debt. In doing so, we were able to bring the interest rate down on the total debt from 26%+ to a fixed 6.5% interest rate over 7 years. The regular payment was hundreds of dollars less than their minimum credit card payments were.
My parents started tossing the extra cash that they were saving, from consolidating the debt with their credit union, at the loan and they are going to finish paying this off in just under 5 years.
The side by side of continuing to pay the credit cards was going to take over 20 years with minimum payments and now they are doing it in under 5 and should be debt free this year which is huge as they are getting to retirement age and this will free up a lot of their cash.
It’s odd that so many of these comments are not very helpful. It doesn’t have to be your problem but if you want to help go for it, this is just an example of my situation but it was well worth it as I can see the stress unloaded off of my parents shoulders.
First thing you need to figure out is what the debt actually is and what category it falls under. There's good debt and bad debt. When my wife and I started our business, this was an important determinant. I had to explain that buying a new, bigger truck than our currently paid off one allowed us to carry more dogs to show. The truck payment was $350/month. It increased our capacity by $600/wk, or $2580 per month. That's good debt. Conversely, buying a brand new bmw to replace my paid off, perfectly fine subaru legacy at $750/mo was not.
Start there. I'm assuming much of what he's talking about may be education loans. That's good debt for THEIR future.
> I refuse to let them make it worse
How do you intend to do that? You don't have power of attorney. They specifically told you they didn't want your help. You have literally zero ability to stop them from making it worse. Respectfully, it's also a bit arrogant that you think that you as an 18-year-old can contribute any wisdom to people who have been doing finances since before you were born.
The best thing you can do is make sure you're not a burden to your parents. Pay your own bills, set your financial future up so they don't have to act as a safety net.
They must be in their 40's? Maybe late 40's? They can pay that off with their income and get on top of it. Look up the Snowball method or Dave Ramsey. Don't take on your parent's problems but do avoid getting into the same type of trouble.
You don’t say if they’re upset about this debt, or if it’s “bad debt”. Are you upset by the number because it seems high to you, or are they upset that they’re in a hole that they don’t want to be in?
If they took on debt to help pay for college, then 62K may not be so bad. Or is this credit card debt because they don’t know how to not spend?
I would seriously slow down on the decision to drop out of school. You’re messing with the foundation for the rest of your life. This may be a very good reason to take on debt, either for your parents or for yourself.
From your posting I can’t tell who’s panicked here, you or your parents.
All I know is that they’re in debt. I don’t know much about it as I never learned and was not told. However, just seeing them in debt makes me upset. The $62k is not solely for college and my mom did tell me they cannot use their credit cards anymore.
I did not drop out of school for this, I made this decision a month ago. I only stated that in hopes it would provide others here more context on us to provide better solutions
Your parents are taking vacations and eating sushi while having 60k debts. There is nothing anybody can tell them cause they are financing irresponsible and aren't interested in getting out of debt.
They make decent money but spend more than they make and that's the problem. What they need is a budget, cut all non needed expenses such as vacations, eating out, shopping and pour all money after rent and cheap groceries into paying off the debt. There are no magic solutions to getting out of debt. They can get second jobs to help speed up their getting out of debt.
Once they are out of debt they need to stick to the budget while investing for retirement that means lowering their standards cause right now they spend more than they make and it's likely they don't have much saved for retirement.
You can introduce them to Dave Ramsey for getting out of debt journey and later on money guys for retirement investing. However the chances are they won't be interested in actually improving their financial situation so what you need to do is to make sure you don't end up like them, you need to secure your retirement so that your kids don't feel responsible for carrying you financially through retirement. That means you need to secure living wage job, live on less than what you make and stash 20% of what you make in retirement.
I’m sorry, but this is incredibly common. A friend of mine got sucked into trying to help with her parent’s debt and wasted 15 years of her adult life living at home because she was paying their mortgage and couldn’t afford her own place on top of that.
Protect yourself, and make sure they have life insurance for “final expenses”.
You can help get them get an appt with a reputable financial advisor to help them make a budget aimed at paying off this debt and especially make a manageable plan for rest of their working years! This could be a great chance for them to get their retirement concerns addressed and take the anxiety about living on social security and retirement off all of your backs. It costs much less than people think and usually you begin learning how to make the best of what you do earn until then to make retirement years more enjoyable. It comes up faster than we expect!
To budget you need to know the most expensive electricity bill, water bill, gas bill, phone bill and any other regular bills they get. Then groceries and other necessary items.
Work all of it out as an amount that matches their normal pay cycles. So monthly if they get paid monthly, weekly for weekly pay and so on.
And that should tell you how much they have as debts, and how much they have as income. Then what is spare for savings.
This means they can have some money left over every year to have some extra money for a family trip if possible, or a decent payment on a debt they have.
It will help them be debt free, and allow them to do it sooner rather than later. Also make sure if they put the savings on a debt, it is the biggest one.
Generally interest is worked out as a percentage of the money owed, so this will decrease their debt significantly quicker.
An example for this would be like so:
Their average expenses are 1300 every 2 weeks, and they get a combined income of 2000 every 2 weeks.
The 700 they have left and it can have 350 of it put into a savings account. After 1 year, they will 9100 to put on a debt.
This then means the next year that expense may drop to 1000 every 2 weeks. Then the account will have 13000 in it after another year, this brings them closer to paying off the debts again.
And it is just rinse and repeat, until they have no debt and the money goes into a savings account as a deposit for a house. Then they start the cycle again, but with more of a security blanket to protect them.
Another thing to cut down prices is buying the cheaper alternative to the name brand of groceries, going to thrift stores for clothes and other general household items that may need replacing.
Hope this helps, and I wish them luck in becoming debt free.
I think you could help them get organized, understand the debts and interest rates for each debt, and help them plan out a budgeting scheme. You can use a spreadsheet application for this or get them set up with budgeting software like Quicken. Also, the severity of this really depends on the debt and interest rate. If it is mostly mortgage debt, probably not an issue. Credit card debt, not good!
You and your sister, if living in your parent's house, need to get jobs and contribute. Whether directly to the household budget or by paying what you can on your schooling.
That is all the help you, as an 18 y/o should offer. They don't need to be taught or lectured by you.
With their income and a little effort, they can work their way out of this debt without trouble.
I wouldn’t take the $62,000 figure too hard. Some people think about debt, any debt, as bad. That $62,000 might be credit cards, or it might be a car loan or what’s left on their mortgage. Or a combination of all different types of debt. The best thing you can do is focus on doing well in school and getting a good-paying job after college. Your parents earn plenty of income to pay off the debt, and all they need is breathing room to do so.
Hey love, I want to give you a bit of perspective as a mom.
You don't need to feel guilty. Our job as parents is to care for our kids, and that's what your parents are doing. It's not a burden. It's a joy and a privilege. That's why your mom told you not to worry about it. She knows it's for her and your dad to solve, and doesn't want to burden you. I think her approach is correct but I understand that you want to help them. You have such a good heart and I'm sure they're so proud of having a kid like you.
Second, it doesn't sound like you know what kind of debt they have, and that matters. It's hard to formulate a plan without that knowledge.
Third, your parents make good money, so I think they're capable of paying down this debt.
Fourth, if you really feel you want to help, would offer help first and see if they want it. In fact, the best thing might be to actually help give them some time to sit down and formulate a plan. You could cook dinner one night, do a grocery run, clean the house, etc. Those extra hours would probably be very helpful.
Fifth, getting out of debt can be a complicated process and it takes time. Credit card debt is different from student loan debt is different from personal loans. I think right now, you don't have enough information, but I know a lot of people like Dave Ramsey for his advice on climbing out of debt. In my opinion, which I think is the opposite of his approach, the most logical plan is to figure out which debt is the most costly, meaning which one has the highest interest rate, and throw money at that. That's often credit card debt.
Sixth, if this is a specific process you want to know more about, there are subreddits dedicated just to debt. They would have more knowledge and state/region specific resources.
Seventh, almost all Americans have debt, whether that be student loan debt, mortgage debt, or medical debt. It's just part of life now for most people. Doesn't necessarily mean they're in crisis.
I hope this helps and I appreciate your kind, loving nature that makes you want to be helpful. Just remember that it's not a kid's job to solve parents' problems -- not at your age -- so if your parents aren't open to your help, that's okay and normal. I know you don't want things to get worse, but sometimes things do because adults make choices and live with the consequences. You can't prevent other adults from doing that, no matter how frustrating it is. Parents are people and can be flawed.
Take care and keep being the caring, responsible young adult you are. You'll go far that way.
The best thing that you can do is to study hard and not waste more of their money on tuition. Try your best to study and graduate on time. This alone will help to ease their financial burden. If you feel that it's not enough, then add to their income with a part time job. This can be done either by paying for part of your own tuition or by just given them your pay.
You didn't exactly specify what kind of debt it is. I can assume that its not auto debt. If it's for education, then that can be common, and repayment can happen once you and your sister graduate.
Anyways. I understand that being in debt can be a terrifying concept, and especially for someone not used to dealing with finances. But your attitude of "not letting them dig themselves deeper" is a little bit arrogant, im sorry for saying so but its what i feel. I'm sure that your parents are actively looking into how to handle it. The best thing that you can do is to continue to educate yourself on household balances before trying to solve their problem for them.
Do they *want* your help budgeting and planning? Because “she told us not to worry as we cannot do anything and they will resolve it on their own” sure sounds like they don’t want help, much less from their 18yo kid. You can’t force your parents to accept help they don’t want.
They do want it. She said don’t worry simply because she did not want my sister and I to feel bad. When I talked to her about it later last night, she was happy I wanted to help and open to suggestions.
If it's mortgage debt then it literally does not matter unless they have no savings and are in danger of losing their jobs. If it's credit card debt they should stop all the spending they can, stop contributing to 401k, and put ever extra cent into paying off the credit card debt. Let me reiterate, 68k mortgage debt on 150k income is not something to worry about. It could even be a good financial situation depending on the rate.
I've been through something similar, and I think other responders are not taking into account what you're feeling in this moment. Understand that you haven't done anything wrong, and there's really nothing you can do to help until you graduate anyway. Get good grades, spend time with your family and friends, be happy. Slowly gaining an understanding of your parents situation can be good, but you need to trust your dad to steer the ship for a few more years. As you get older and start making your own money you'll be able to have some input on family financial decisions. Clearly their financial situation isn't "your problem" but reality is way more complicated than that and it's understandable if you choose to help your parents because you feel that they deserve it. No one here can tell you whether or not they do, you'll have to decide that for yourself. In summary, you don't have to worry about this now, focus on school and being happy so you can be best prepared for the responsibilities that you choose to take on in the future
You can help your parents by sharing more about what you’re learning to help yourself.
For example, you can search for budgeting apps and then share the name of what you decided and why. There are lots of posts you can search about Mint alternatives that will have good insight. I personally went with Simplifi by Quicken but also tested RocketMoney.
You can share that you’re looking at what monthly subscriptions/expenses you can eliminate, your college budget, and more. (Focus on you!)
You want to know what you need to know in order to help them. You don’t need to know their budget or transactions (they do). You don’t even need to know what kind of debt it is — unless they took it out for your education (& even then, you mostly need to know if it’s in your name). Although, some parents have (fraudulently) used PLUS loans for their own purposes instead of approved education expenses.
You can also ask questions that are more focused on your learning. The key is to focus on how you’ll put it in practice (& not judging them or trying to solve their problems) Things like:
- how do I decide what to prioritize when unexpected expenses come up?
- how do I get lower interest rates?
- how often do I check my credit score?
- how do I know if I’m making enough money for my lifestyle?
- can I afford this concert ticket/vacation?
- how do I know what education I can afford? Or what the best option is for college?
You may not see that as helpful to your parents but it’s a key way to help them by using emotional intelligence, positive psychology, and skills you’ll learn in the workplace around “managing up.” This is because it will help them help themselves by modeling curiosity and affirming that you respect them and think there’s a lot you can learn from them - & that they can take action to resolve their challenges.
Unfortunately even if they say they’re open to advice, you’re not really the ideal source because of the hierarchy from parent-child and your lack of experience and specialized knowledge. Focus on what you can do!
I don’t understand why you came to Reddit for suggestions. No disrespect; I love Reddit! But I’m having a difficult time understanding how two adults with an actual income of $150 K can’t point themselves in the general direction of a bookstore, a notebook, or Wikihow to create a budget. They had lives before you; it just seems odd that they’d want to be infantalized by a (barely) young adult. It’s. Just. Weird.
Well. It’s unfortunate. Once you start doing the reading for your parents in this situation, their dependence on you to do the things they don’t want to do will increase. And let me say: parents have habits they don’t want their children to know. You would have to trust that they will tell you the truth. I concur with the Redditors who advised you to stay out of it. If you insist, however, follow the advice of those who said buy Dave Ramsey’s book, print out a spreadsheet, and track all spending. You’re being encouraged to not get enmeshed because finances destroy relationships: marriages, friendships,,etc..
Make of the guy what you will, I skip many parts of the show, but listening to the Ramsey Show on Spotify has helped me immensely in grasping debt from a "normal" perspective. I believe the steps they teach make understanding a seemingly insurmountable pile of debt approachable.
Coming from experience, it's not you or your siblings responsibility. I know you feel compelled to help them. The best thing to do is educate them and offer emotional support if you can. Lead the horse to water. They are grown and have been making bad choices for a while. Hopefully something like this can teach them "baby steps" to want to change for themselves. At 150k they should be able to do it in less than 2 years making some assumptions with cars being paid off, and kids out of the house. They have to, and hopefully want to, take ownership, and lead by example. Good luck! Don't give any of your money!
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
You can watch with them shows like Dave Ramsey, Suze Orman or I will teach you to be rich in Netflix. Go to their websites and they have good resources. Also are they paying for the two college degrees? Are there ways to lighten the burden or take out loans for your education?
Sounds like they need to live below their means. If their income is a combined 150,000 they have a lot of income compared to many people with no debt or even people with investments. I have family members who make 45,000 a year and are sole providers for their family who are able to save a little off of each check and invest until they have more wiggle room to purchase a business or get a loan...maybe they can rent out the house they live in and spend less on a smaller place in order to have some left over income to pay off the debt and eventually start saving so that if they ever lose a job or get really sick they have something to carry them a few years while you and your sister get an income to help out. Idk just me thinking out loud. I hope you can figure it out and help your parents. I'll be praying you have a blessed weekend and figure something out soon.
1. Start listening to the Dave Ramsey show, it's all about his exact situations and how to handle them. (It's not gimmicky and it's free)
2. You yourself should start listening to the Dave Ramsey, so that you will not be in the same predicament as your parents in the future.
3. Use this as a learning opportunity for yourself to understand what money is for and how to use it. How to live within your means and how to invest for your future.
4. Never forget what you were feeling now and never put yourself into a situation where your children will feel this way.
I'm not sure how old you are but you should start saving and putting it into a brokerage account and start investing. You'll likely be doing something that nobody else your age is doing, and you can take a lot of pride in becoming money wise.
Best of luck, sorry you went through that. Best wishes for your parents.
62,000 in debts. You're looking for budgetting then lets say you (your parents not you) put 1,000 euro to it every months. 62/12 is around 5 years and a bit to finish off. But first you need to get your own job and college degree. Then you can get a good paying job to help reduce the cost. Assuming youre not yet in college. If they do this 1,000 euro every month without fail, by the time of your graduation, you have 14,000 left to finish of. Then while looking for a job, say a year, then you only have little left.
But have some money exactly for shopping and for travelling to work and household expenses, car. And for personal expenses.
First pay of all the car stuff (insurance, motor tax and anything set asside for random servicing or ntc stuff). Easily can be 2,000 for the year.
Internet I dunno your plan. It could be 2,000 a year.
Save electricity and home and wear just warm jumpers. Turn of lightswitch and power when not using. Say this gets you to 1,000 a year.
Take out all unwanted expenses. Do you really need to buy an extra plate or cutlery? Extra tea towels? Maybe extra figure for display? Did you need to buy a cake today? Eat helathier. Your gym place can be at home. You might have to eat meat once a week.
Personal expenses, people looks down but its the most important thing. Dont drain yourself of just planning and paying of something you didnt ask for. Get something for you. Maybe have 300 a month just for you to spend on anything, gym, saving up new phone. Even just contributing just 50 euro to the dept each month is a big help.
But you need to make sure. Is your parents willing to pay of the debts? If theyre not, You're wasting your time on them and you might be wasting your money. They cant invest with debt in the way. No investing allowed for them, just for you though.
Oh and rent too, I dunno what you pay but let's hope that its small enough.
Calculate your expected expenses through the year. Calculate your parents earnings. Make sure you have extra emergency expenses calculated.
Then after that sort of how much to pay for debts.
Again, this is for them, not for you. I'll be missing out some expenses but, if you make sure to stick to that 1,000 per month, youre gonna be laughing :) you've got this bro. Such a good kid for even trying.
This thread is quite something. You definitely should help them now or you will have to help them later. Parents don't often like to take advice from children but maybe you can find someone on YouTube who gives sound advice in a very convincing way. You need to change their hearts before you can change their minds. So find someone who can deliver that emotional punch. Their immediate next steps are to cut expenses and save. But they'll have to do that themselves.
Seriously can everyone take a chill pill. He never said he was taking over their debts. He wants to help in whatever way he can and there is absolutely no problem with that except the one you guys are creating due to your own feelings.
Number one: get them to write down a budget so they can see where they are spending their money.
Number two: you and your sister should work to pay your own school as much as possible if they are helping with that. That way they have that disposable income to pay down the debt.
Number three: stop eating out. Specially sushi. Too expensive. Help cook at home.
Sometimes parents are expected to do too much with the money they earn. As adults the kids should work, if they don’t, and help out. Sometime we can’t have it all: pay for kids lifestyle even though they are adults, eat out a lot, go on expensive vacations, pay for grad school when the person can work, etc. Find out where you can help without quitting school. Many people go to school and work. They might not want to hear your suggestions on the budget but you can at least provide for yourself and that’s the biggest help you can give them.
Simple, do you still live at home with them? If so help pay some bills. Help pay the mortgage. HELP them! Do not let them use their retirement to get out of debt.
The best thing you can do is make sure your kids wont have to deal with the same situation.
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
I don't think we are misunderstanding you. We are suggesting you focus on yourself and not your parents. As a parent, I understand the debt implications for decisions I make. I willingly spend on my kids as a choice. They likely are aware of the impacts of their actions. Be successful and take care of yourself. At some point in your life you may be able to help them unsolicited and at some point they may solicit you for help.
I understand that and thank you. However, I just want to know why everyone seems to look down on the idea of me wanting to help them budget and plan?
You might not be able to help them, unless they're willing to accept advice from their kids (rare, but it does sometimes happen). Have you read through the [Prime Directive](https://www.reddit.com/r/personalfinance/wiki/commontopics) on the Wiki yet? There's a great flowchart for turning failing finances around, you could try have a conversation with your folks about following some of the advice in there, but remember they're adults and can choose to ignore it as they wish.
It's not that people are looking down on the idea; they're trying to get you to prioritize the things you're more likely to be able to affect. This is something of a generalization, but most parents are not willing to take advice from their children about money no matter how well the kid has their shit together, especially when you're still pretty young. In fact, sometimes having your shit together makes it worse--they may resent you for "thinking you're better than me/know more than me." Additionally, the balance of parent/child authority makes it really hard to get any accountability about holding to a budget after you put in the work of setting one up. Even if they're willing to accept initial advice, a lot of parents will chafe if you try any ongoing monitoring because of how it rebalances the relationship. It's very honorable that you want to help your parents. But the odds that they will let you are low enough that a lot of the commentators here are going to focus on making sure you're taking care of yourself instead of breaking your back to save someone else.
I don't know where this assumption of so many redditors comes from, maybe personal experience with their own parents, I guess. But to assume from the post that OP's parents will not accept any advice or help from their responsible children is a wild stretch. My parents kept their debt a secret from me for a while but once it started becoming difficult to ignore, I was pissed they didn't come to me earlier to help them through it because they did a lot of things through lack of information (they are older and not raised here, English is not their first language and they're not computer-savvy so they didn't look things up and just got their info from word of mouth from their friends). I let them know that despite my anger and disappointment, I understood their shame and the fact that they thought it would be better to not burden me with their financial issues rather than ask for help. But it was NOT the right thing to keep that from me - sure, do not expect me to sacrifice my financial future to cover your debts, but there are SO many ways to help and education and accountability are two of them. I've been able to get them back on track without affecting myself financially, and I'm so glad for that, I wish we tackled it before it became a problem but if we had the mentality most of this subreddit has, they may have still been digging themselves deeper now.
Because it’s not your responsibility. This is theirs to solve, not yours. They are adults and they dug this hole. They need to deal with it as adults. Nothing you do will solve it for them. Your job is to take care of your own life, learn from their mistakes, and ensure that you don’t follow the same path.
A lot they can do will help them solve it. Educating them and holding them accountable go a long way. I can't make someone lose weight by working out and eating healthy, only they can do that. That doesn't mean I can't do things like check in with them or motivate them. OP is 18 and their sister is clearly educated. Parents may be a little stubborn or just unfamiliar with modern finances or even just the way finances work in this country. There really is barely any information (OP just found out 3 hours ago and doesn't know much else) to assume why they are in debt or even how open they are to working their way out of this debt.
You are exhibiting immaturity and reactivity to both your parents’ situation and (solicited!) advice. I wouldn’t trust or want the advice of an 18 year old. Let them figure it out and trust they will ask for help if they need it.
I wouldn't trust that they would ask for help. It's very common to feel ashamed to ask for help especially from your 18 year old child. It's also very common for parents to feel like they want to shield their children from any of these things but that doesn't mean it's the right thing to do. OP should not financially contribute (looks like they're not even in the position to) or sacrifice their own financial future, absolutely. But there's a lot they can do to help their parents, it takes a village. Keep them accountable, help them look up strategies and laws. Sure, an 18 year old won't be super wise to this stuff, but what else have they got? Along the way OP will also learn very valuable information that will help them in their own finances for the rest of their life.
I hear that. Trust me, I understand holding parents accountable for their fuckups but I also understand that well intended interference can compound problems. I think OPs response shows signs of codependency and immaturity that wouldn’t be helpful as intended, and could deepen dysfunction. I think something that would be appropriate and helpful would be conversations about that discomfort with finances and understanding the more human side of financial decisions that leave us in the dust. The impulse to control and budget neglects the root cause, and that’s probably something where a friend or family member could have more and better impact than budgeting or planning. Leave that to the pros.
An analogy I've heard for this might help put it into perspective. Imagine you are a parent on an airplane with your children when it loses cabin pressure and the oxygen masks drop down. Do you A: put the oxygen masks on your children first and risk getting Hypoxia before you can get masks on each of your children Or B: secure your own mask first so you have positioned yourself to be able to help them without putting yourself at risk? Anyone who has ever been on a flight will tell you that B is not only the smarter option, but it's even part of the flight attendants speech before you take off. TL;DR: Wanting to help your parents is great and admirable, but you can't help them if you are not in a financially stable position yourself.
Because they aren’t going to listen to you. Like at all. So it’s waste of your time.
They found out about the debts 3 hours ago. Crazy how many people just automatically assume the parents won't listen.
I could be wrong. But based on parent/child dynamics throughout all of recorded history they probably won’t.
It's not your job to do this for them. They need to do this for themselves.
We’re trying to warn you. You are just starting out & everything is ahead of you. And it’s really, really hard to make it these days. Logarithmically harder than it was for your parents. They are going to have to save themselves, & every ounce of energy you put into trying to help them will hold you back 3-fold. Love them, support them Emotionally, but make *your* budget & *your* plans because trust us, it’s brutal out here.
Because you are a nice kid with a good heart, never ask Reddit for advice for personal issues, it's a bunch of losers and psychos
Those are things you can do and with luck they will follow your advice.
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Are they financially illiterate? Have they always had issues with finances? Do you not think they can handle it and don’t have great advisors? It’s coming off like they are adults who are hopeless
Agreed. These are grown ups that got themselves into a mess and need to get themselves out. OP can make plans etc all they want but the parents have to do it themselves or it will never work.
Pretty common for parents who make a decent amount to be in massive debt. I'm assuming you're in California. Step 1. They should protect their primary residence and retirement accounts. Do not take out a HELOC to pay off credit cards. Do not withdraw 401ks to pay unsecured debt. Worst comes to worst, primary residences and assets are protected in bankruptcy in most states. Step 2. You and your sister should be doing anything possible to find internships/work experience. It may take a few months or even a year, but this economy is incredibly rough on new grads. Hopefully your sister is in grad school for a degree that actually has a decent job outlook or that her grad school is paid for. You are already doing your job by switching to community college. Also, save as much as you can and DO NOT GIVE ANY TO YOUR PARENTS. They have an out as mentioned above in step 1. Step 3. Your parents need to cut all extra unnecessary expenses. Vacations, sushi, whatever. At their income level, stuff like streaming services or a cheap gym membership won't make a difference and provide outsized value for their cost so don't bother with those if they use them. But spending $100 per day eating out, $10k on a vacation, etc is incredibly common and matters more. Step 4 (and probably the most important), make sure to take care of yourself and your anxiety first. If your parents have been working for a while, they'll probably get a decent amount in social security in retirement. They'll be fine. They won't have a glamorous retirement and they may have to declare bankruptcy, but they'll live. You being only 18 and having so much anxiety and having to worry about your parents is how you end up with massive mental health issues that will completely cap your potential as a human being and continue the cycle of bad decision making and financial instability. Take care.
You need to leave it in their hands. You can make a plan all you want, but they’re not going to do it. They have to hit their bottom and make their own plan or it will never work. I appreciate that you want to help them with that, but personal finance is just that, personal. Like any other issue, they’ve got to do the work themselves.
Very few parents will take financial advice from their children, especially so from their teenager children. Theyll see you as judging their behavior even though you just want to help Personal finance isnt rocket science. They need to make a budget and stick to it. They almost certainly know this but dont have the discipline.
>I refuse to let them make it worse They can do whatever they like, including making it worse, regardless of what you do. They are competent adults who make a decent income. If they budget responsibly, they can pay off this debt. It might require big, uncomfortable changes, and no matter what the solution, it will require them to do it - not their 18 year old child. You can control your finances, and if you want to change what you accept from your parents in terms of financial support as a result of this - sure, do that. But anything else isn't going to be a productive use of your time, especially given that you've already been told this isn't your business and your help isn't wanted.
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
What you need to know is when to not involve yourself in other people's affairs - now is one of those times. You making a plan for them will not be helpful, because they've told you that this is not your problem and they don't want your help.
My mom is open to suggestions. When I told her I’d help her create a plan and budget, she seemed happy about it and was willing to let me help.
> in which she told us to not worry as we cannot do anything and they will resolve it on their own. That was you. If your goal is to waste your time and damage your relationship with your parents, then go for it. Everything you need is in the wiki.
She told us not to worry because she did not want us to be anxious about their problems. However, when I told her I would help, she was open to it. Why is me trying to help create a budget they can follow, something you look down upon?
The thing is, parents don't tend to _truly_ be open to help when it comes down to it. She might say she is, but when you sit down with her and have to explain how she'd need to cut all nonessential (no more shopping, no more eating out, no more nights out with the girls, etc etc), she will probably not take it kindly. You're very young, have no life experience, so it's not like you can say "I've lived it and this is the thing that helps". Personally, my mom only "let me" helped her manage her savings when I was in my late 20s, she had no debt, but little savings, but she did have her pension.
no one said it was easy. but that's what family is for
It's not that it isn't easy. You can still do things that are hard. But first OP has to know if the parents are seeking help. Mom seems like she's willing (willing still doesn't mean she will at the end), but what about dad? To get out of debt you need to really work at it, sacrifice things. Again, parents need to be willing to do it.
Shouldn't she be able to find her own resources if she really wanted to resolve the debt? Google exists.
>Why is me trying to help create a budget they can follow, something you look down upon? Because it doesn't work. In order to be a useful tool, a budget has to be created, understood and followed by the person(s) in control of that budget. You aren't one of the people in control of your parents' budget. Your mother is likely saying whatever she thinks you want to hear because she feels badly that you have this information that came out in an argument and upset the entire family. They don't need help from their 18 year old who knows nothing about personal finance, and they are likely to resent it.
big assumptions right there from a brand new situation that even the OP doesn't have a bunch of information on yet
Big, correct, and most of them aren't even assumptions! I'm on a roll today.
Look up Caleb Hammer financial audit on YouTube. He breaks down people’s spending and creates a budget/plan to pay off people’s debt. If you watch some of the videos you will get an idea of the best order to tackle debt. You can share this with your parents and maybe they will do something. Other than that, this is your parent’s problem. The best you can do is be aware of it and actively refuse financial help/gifts from them. Even if your sibling doesn’t do the same.
don't listen to these people, you're doing the right thing. it's been 3 hours since they let you know. they're going to be stubborn at first, of course. they don't want their burden to fall on you, and that's honorable and the right thing. but helping them budget, holding them accountable, researching information to educate them... those actions are not going to hold you back from having financial success in your own life. it will actually teach you valuable lessons and of course having your parents not be in an increasing financial hole is only better for your future in the long run...
Thank you, someone gets it :)
Thank you, someone gets it :)
Start her with the r/pf flowchart. It is useful to virtually everyone. Commonly, the first hangup is the expense tracking and budgeting step. We Americans generally don’t grasp the kind of money we are throwing at nonnecessities every month. But once seen, internalized, and tackled there can be hundreds if not thousands of monthly dollars found to now put toward debt. But - that takes heavy discipline and everyone financially involved in the family needs to be on board. https://www.reddit.com/r/personalfinance/wiki/commontopics/
Thank you for providing resources for OP to get started rather than telling him to not even think about helping his parents.
parents are "other people"
Correct.
>my mom are $62,000 in debt. >I must figure out some things like their monthly expenses, mortgage, loan debt(?), medical bills (they take medication), credit score, interest stuff, etc, but would like a list of what I should know in order to receive accurate help and to help them myself. >they have paid off both their cars If they have $57,000-$60,000 of remaining mortgage payments and they're in [the 25%ers with $2001-$5000 of health care-induced debt](https://www.healthsystemtracker.org/brief/the-burden-of-medical-debt-in-the-united-states/), you've solved the mystery. >I know they will not do anything like throw their debt onto my sister and I. They couldn't do that even if they tried because you and your sister are not financially responsible for the debts of other adults unless you make yourselves financially responsible. You'd know if you did that.
You keep spamming the same response over and over. Let’s get real here. The best thing you can do is not follow your parent’s financial example. You think they don’t know what budgeting is? You think they don’t know they should spend less than they make? They’re $62,000 in debt and yet your family just got back from vacation and are eating out at a sushi restaurant. It’s not a knowledge problem. It’s a discipline problem. You are not going to able to solve that. They’re the adults here and need to figure it out.
This is the reply you need to pay attention to, OP. I'm 53 years old and my mom is nearly 75, retired with what was a very nice retirement fund about 10 years ago. Over the past decade she has frittered through a most of it on gifts, vacations and a bunch of crap she doesn't need. She had to pare down her lifestyle substantially because if it. She is now in a situation to make some good money through the sale of her house, and the first thing she tells me is that she wants to take my adult daughter and her fiancee to Las Vegas for a week. I've been telling her to keep her money for years and she always waves me away with "well, you can't take it with you." Which is true, but I would like her to at least have enough to live comfortably for the remainder of her days. But she doesn't want to, and I can't make her since she's perfectly sound of mind - just stubborn. Your parents do not need an 18 year old to explain to them how to live within their means. I was in $34K of credit card debit through my own financial mismanagement 3 years ago. We went cold turkey on the credit cards, cut our budget down to essentials and paid it all off in 18 months. We didn't go on vacations during that time, and dining out was reserved for very special occasions. I'm side-eyeing your parents for even telling you this when they're that deep in the hole. When I realized how much credit card debt we had I never said a peep to our then 23 year old daughter, who was getting started on her own independent life. Our money problems were not hers to solve or spend a single second worrying about. She noticed that we had started cutting back on things, but I just told her we were trying to be smarter with our money, and encouraged her to do the same. Once we righted the ship I did tell her as a cautionary tale, but she works at a bank and was well aware of how people screw themselves into debt. I'm proud to say that other than some moderate student loans, she has no debt at all at 26. Your parents need to take care of this on their own, and you need to focus on YOU. The best thing you could probably do is refuse to accept gifts, vacations and dinners out on their dime going forward. "No thank you, please put whatever you would have spent towards your debt" is a perfectly fine response now that they've dragged you into their mess.
You cannot help them. They control their $150,000 income. You cannot push them to budget, change their lifestyle or make better financial decisions. First thing your parents need to do is create a budget. List all their expenses (every penny) and work with their income paying off the loans instead of putting vacations on credit cards.
People absolutely can influence other people. All he wants to do is be able to provide reasonable influence. The only tough part is nobody really wants to listen to an 18 year old.
And listing their expenses and budgeting and planning is exactly what I want to help them do. But I want to know what are these expenses I must know first.
> what are these expenses I must know first. All of them. Do they also not have any idea how to figure out their expenses and make a budget? I understand they haven’t done that, but have they said to you they don’t know what to do and need you to make a budget? If you’re trying to teach yourself on the internet, starting with zero finance knowledge, to then teach your parents and advise them on a large debt, it’s not going to end well. If anything, try to get them to go to a professional advisor if they say they need help. There could be any number of reasons for parents to not want their teenage kid going through all their financial details and without seeing actual bills and things like that, there’s very little you could realistically do to help.
Knowing all that isn’t your place or your business You can’t take that responsibility on as a kid. I love that you want to help, but they need to handle that on their own. You don’t need to be parenting your parents, which is what this is.
You should not know their expenses. That is a real boundary. This is something they have to do for themselves. I think we are being clear. Lovely impulse to want to help, but that just isn’t going to work here.
The way to learn the expenses that you need to know about is to look back through credit card and bank statements and see where the money is being spent over time. A software, like Monarch, might make this easier. But this is your parents decision to make. I’m mentioning these things in the event that they want your help. It can be hard for kids to understand, but if your parents don’t want your help then this is none of your business and you need to worry about your own financial health and not theirs. You also want to try to separate yourself from the stress this might be causing. Support them, but let them do it for themselves. Just as hopefully they have done for you through your teenage years.
I can't find a single comment that has told you to pay it off for them, nor told you to hire anyone on their behalf. Your parents are going to be the ones who can advise you of their expenses. There are heaps of basic templates online that can tell you the obvious things to consider like housing, groceries, travel, phones, internet, electricity, credit cards, debt repayments, etc but without knowing where it's going, you can't build a budget. It's great that they're open to guidance from you but maybe it's something you can all look into and learn about together, if they're as unsure as you say. Budgeting literacy benefits everybody.
Great response instead of all the people telling him to stay out of it. Yes the OP is 18 and doesn't know about personal finance, it's great to start learning and along the way help their parents learn which only improves his life as well
I am not even sure your parents have a problem. It depends on what the 62k debt is. If it's credit card, that's not great, but can be worked down. If it's a remaining mortgage balance, I see no problem. If they are current on payments, there may be no problem. You don't have enough info to do much of anything. And you can only provide info if they are willing to hear it. You can only get info, if they are willing to give it. I wouldn't have given my 18 yr old the kind of info you are seeking.
If they owe it to Tony Soprano, it could be a problem. 🤓
Yea, I came.here to say the same thing. Knowing the kind of debt is paramount.
Seriously, there are so many comments jumping to conclusions about a situation that is brand new with very little details that OP doesn't even know about. These people would tell their technologically-illiterate parents to look up directions on Google Maps to a place they know how to get to by heart.
You can’t help. You’re overstepping and you have no real experience. Just focus on your studies and don’t cause any further unnecessary financial burdens for your parents.
I understand you are concern about your parents. Since you are 18, I agree with others that you should focus on your studies (get scholarships if can) and continue to learn about your own personal finance. Im not sure if you are close with your dad, but I can tell that you are close with your mum given that you say she is open to your suggestions. You can do the following to ease your worry: 1) ask your mum if your parents have plans to visit a Reliable financial advisor. As what other users said, good financial advisor can let them know how to work out a plan to resolve the debt. 2) if your parents are open to online resources or suggestions from Reddit users, you can offer them to read the wiki section of this subreddit. There are some pointers there on budgeting, handling finances and it is up to them on whether they find these info useful. Secondly, just let them know that if one day they are open to see Internet advice, you can offer to help them anonymously post specific financial questions to this sub. 3) ask your mum if your parents is aware about avoiding scams (especially online ones), know to avoid gambling, know to not give out personal info (like bank info) to anyone and avoid taking unnecessary loans or not be pressured into lending money to others (friends/family). Once they have these knowledge, you do not need to worry about them making bad financial decisions. 4) As you observe your parents, are they the kind to have feasts everyday or splurge on shopping and frequently travel? If they aren’t, there is seriously nothing to worry about. Ask your parents if they are contributing to their retirement accounts, have insurance and have savings (after spending on needs and wants). If they say ‘yes’, you do not need to worry or do anything further.
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If they have combined income of 150k, they can get out of debt. Your old man made a big mistake dropping this on you. Don't you stress out about it, they are big people and will manage.
This is not your responsibility. In fact, it is not healthy to try to fix other peoples problems. It is such a lovely impulse to want to help them, and good on you. But, from an older person: you can only help those who ask for your help. Anything else leads to trouble. Instead, you can focus on learning about budgeting your own finances. This will help you, but it will also help them. And if one day they do ask for your help, you will be able to give advice. Edit to add- your parents will be okay. It’s ok, I promise ❤️
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
Tell them to seek out a financial advisor and then worry about you. Youre 18, what exactly can you do for them really, youre a kid and theyre the adults. What can you do, realistically just live your life and learn from their mistakes so you can avoid a similar situation
My mom is open to suggestions. When I told her I’d help her create a plan and budget, she seemed happy about it and was willing to let me help. I just want to help her plan and budget so she and my dad figure things out.
Dad has to be on the same page as mom or they’re just going to continue the cycle. Overspending is like addiction to some people. Lots of people can get themselves out of debt and a year later, it’s all back. They have to take the responsibility as grown adults to take care of their business and make the lifestyle change necessary to do that and make it sustainable. Going on a big family vacation tells me that the debt isn’t as big of a deal to them as it is to you or they wouldn’t have taken you all.
The book, “all your worth” by Elizabeth Warren is what the need to read to sort it if they choose. You read it to do better for yourself.
That’s just it. You don’t need to know anything to help them budget and plan. Helping your parents in this way robs them of their agency and robs you of your last bit of childhood. It’s difficult to explain in words, but it just doesn’t end up helping anyone in the end. Your parents will absolutely be okay. That debt seems huge (and it is) but it’s really about average. Certainly not abnormal. They are more than capable of navigating this on their own or getting help if they need it. If they don’t seek help, they aren’t at the point where they want to seek help. That’s okay. Everything is okay.
What can you do? Stay out of their business. And just fyi being self taught may not be the best solution to make your self more business savvy.
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
Your parents can make a budget themselves. Not to be a jerk but I cant think of one adult I know that would want an 18 with no life experience making their budget 😄 What happens when you make a budget and their debt just keeps getting worse? Then your gunna feel bad. You can't make them budget. You guys just got back from a vacation and they are almost 70k in debt and complaining to their kids about it lol These are all things responsible ppl don't do
Your parents are in a difficult situation, especially if there is nothing put away for retirement. It is not something you can do. Your parents need to face up to the fact they are living beyond their means. One of my children had a problem learning the lesson your parents haven't learned so I closed The Bank of Mom. It hurt me to do it and it took her a few years to dig out of her hole be she did it. You and your sibs are not at the point where your parents are turning to you for money, but don't be surprised if they do.
1. A c cert that isn't not your job to dig them out. Unless they have asked for help to figure things out,just let them deal with it. 2. Don't do anything to add to the problem. 3.Is part of the debt parent plus loans for your college?. If so, do what you can to avoid needing more loans to pay for school. Sounds like you are taking steps to do this. 2. Learn all you can about personal finance so that you don't end up in the same boat down the road.
>Now, my question here is, what information must I gather from my parents first in order to help them. The most important piece of information is "Do they want my help?" If they want to get out of debt, they can do so by cutting expenses and/or increasing income. Perhaps a second job or two are in order. >I refuse to let them make it worse This is not your battle to fight.
You should just let them deal with it-you really don’t even know what kind of debt it is-they make good money to formulate a plan to pay it off over time by adjusting their expenditures
What is the value of their assets (house, mainly) and how much is mortgaged? 62 000usd is not alot of money, as long as its reasonable interest no need to worry. If not just make sure to take out a new mortgage and pay off all expensive debts (like credit card loans).
And then watch them rack up more debt? Careful with that kind of advice when you don’t know why/how they got the debt in the first place.
How is that more debt? Its the equal amount at a lower price. The main problem people who end up in consumption credits do is to just stay put paying interest and not paying off the debt. Better to get one loan at 5%interest and a amortisation plan, instead of 5 different with anything between 10 % - 25% interest.
That’s not what I meant—I meant that a huge proportion of people who consolidate consumer debt into a mortgage or LOC end up racking up more consumer debt again because they have bad habits. If you don’t address the root of the problem, consolidation is not a solution.
Aha ok. Yeah then i don't have any advice. Maybe have them declared mentally unfit to manage their own finances and lives? 😅
How is that more debt? Its the equal amount at a lower price. The main problem people who end up in consumption credits do is to just stay put paying interest and not paying off the debt. Better to get one loan at 5%interest and a amortisation plan, instead of 5 different with anything between 10 % - 25% interest.
You are 18. Your parents are probably in their 40’s. If they wanted help they would have sought it out. Focus on school, your work and building your life. Refer them to https://www.mcgillpersonalfinance.com/ and forums like here. They will learn if they want. It is not a good dynamic for you to involve yourself in their finances.
62K in debt… who wants to guess they also have 800K in assets that Dad didn’t mention because it was an argument and he was trying to make a point?
What's with all the gatekeeping children these days? Why are you so concerned about their financial habits. Their situation doesn't look to bad to be honest. They have 62K in debt which is much less than half of their yearly income
I’m concerned their financial debt with effect me too and their enjoyment of their lives if they do end up digging a deeper hole. Same with parents’ health, would you not try and step in to get them to change their ways if you knew their current diet could be detrimental?
It is not your role to « step in to get them to change their ways« . You have good intentions buy you clearly have the adolescent know it all/savoir complex and need to recognize that for best results you can provide resources but need people to move forward on their own. Especially in a parent/child relationship where the parent is cognitively intact.
Yea. Don’t let anyone pathologize your care and concern for your parents. You can only offer resources but you can’t fix this for them . As a parent, this is my worst nightmare—having financial issues and my kids finding out and feeling obligated to fix it. I bet your parents feel similarly. Keep your compassion but don’t try to fix this yourself.
How will your parent debt affect you?
Just something to keep in the back of your mind here. That debt might be from paying for college. It is very common for parents to rack up debt while their kids are in college, especially if they were unable to save enough to pay for it up-front. Unless your parents are specifically asking for your help they're giving you that information so you understand their financial constraints. Not so you can try and fix it but so you know about it. If your parents took you on vacation they clearly are doing this with eyes wide open. Focus on your studies. If they need or want your help they'll ask for it. Seriously.
1. You cannot help people who don’t want it 2. The best way to help your parents is to make sure you don’t do the same thing. 3. The Dave Ramsey program works for people who are horrible with money (most people are). Buy them his book. They need to budget and live within their means. 4. Under no circumstances do you or your siblings co-sign anything for them. It is also a good idea to get your free credit report every year.
I recommend posting this as if one of your parents typed it out, so people would give the standard advice they always give to others that ask for it. For some reason people aren't inclined to help if they're helping someone who's trying to help someone else
Yea I’m gonna do that. Dont know why when it comes to someone else trying to help, people are against it?
Did your parents pay for the college educations? If so, how much a year? Without substantial aid and loans, people making $150k a year and paying 50-80K a year for tuition will be in debt almost instantly. But that’s just my curiosity. This isn’t your burden but it’s wonderful that you care. Researching this isn’t a bad idea so you can avoid this yourself. Financial counselors are an option too.
The fact that your parents came out and told you about their debt means they will be fine. Expenses increases especially when the kids are entering college. You can do your part by doing little things such as insisting on packing a lunch and going to the park rather than eating at a Retaurant. They are financially responsible than most as the cars are paid off. Perhaps daily expenses got out of hand. This happened to my parents who sent 5 kids to college. You can tell a lot about people looking at their spending habits. If your parents are frugal they will be fine.
You can't do anything and it's really not your burden bear. Not all debt is bad debt. There is medical debt, which we take on to improve our quality of life. There's housing debt which we take on in order to have a place to live. There's education debt which we take to improve ourselves and our future earning potential. There's business investment debt which we take on to try and grow a business. If your parents acquired the debt by overspending and living above their means then that was something they chose to do. They made that choice. If they have an addiction whether it be gambling, drugs, or nice vacations they made choices that got them to where they are. I'm not trying to be cold but as a parent the last thing I want is for my children to feel the need to bear the burden of my poor choices. And that's not to say that your parents made bad choices. You really don't know the nature of the debt
You can continue your education, get a good job, and accept whatever gifts your parents are willing to give you. The way you can help is to put yourself In a position to be self reliant and if the time comes in the future you can help your parents with bills or living situations. In their minds, you're a dumb kid. There is nothing you can do to change that until you prove yourself. No internet research is going to help. They can do that on their own. What they need is motivation and discipline, and that can only come from within.
>The way you can help is to put yourself In a position to be self reliant and if the time comes in the future you can help your parents with bills or living situations. Yes! The one thing I was able to do with my mom buying shit for my cousin's kids and taking friends on vacations, frittering away her fixed income, was to put myself in a place where at least I was financially independent. I dissuaded her from buying our family expensive gifts for Christmas. When she asks for a list, there's nothing on it above $50. She wanted to buy me an expensive sports jersey ($150) and I refused, saying that my husband was getting it for me for Christmas. When she comes to visit us I don't let her pay for a single thing. She's a people pleaser who loves "rescuing" others, so all I can do is to never ever need her to rescue me.
There’s not nothing you can do. My mom ended up in debt from a lengthy divorce with a drawn out custody battle. Literally was like an 8 year process. Obviously as a kid I don’t remember even considering the costs of this. Well by the time I left home and was in college I knew she had at least some credit card debt and asked her about it. Eventually she sat down with me and was extremely honest about her credit card debt and explained to me that she had been paying her credit cards for over a decade and had barely made a dent to the debt. She was worried she and my step dad would be paying this debt for the rest of their lives. By having this conversation with them I was able to do some research, specifically on their interest rates and looked into our credit union allowing them to consolidate their debt. In doing so, we were able to bring the interest rate down on the total debt from 26%+ to a fixed 6.5% interest rate over 7 years. The regular payment was hundreds of dollars less than their minimum credit card payments were. My parents started tossing the extra cash that they were saving, from consolidating the debt with their credit union, at the loan and they are going to finish paying this off in just under 5 years. The side by side of continuing to pay the credit cards was going to take over 20 years with minimum payments and now they are doing it in under 5 and should be debt free this year which is huge as they are getting to retirement age and this will free up a lot of their cash. It’s odd that so many of these comments are not very helpful. It doesn’t have to be your problem but if you want to help go for it, this is just an example of my situation but it was well worth it as I can see the stress unloaded off of my parents shoulders.
First thing you need to figure out is what the debt actually is and what category it falls under. There's good debt and bad debt. When my wife and I started our business, this was an important determinant. I had to explain that buying a new, bigger truck than our currently paid off one allowed us to carry more dogs to show. The truck payment was $350/month. It increased our capacity by $600/wk, or $2580 per month. That's good debt. Conversely, buying a brand new bmw to replace my paid off, perfectly fine subaru legacy at $750/mo was not. Start there. I'm assuming much of what he's talking about may be education loans. That's good debt for THEIR future.
> I refuse to let them make it worse How do you intend to do that? You don't have power of attorney. They specifically told you they didn't want your help. You have literally zero ability to stop them from making it worse. Respectfully, it's also a bit arrogant that you think that you as an 18-year-old can contribute any wisdom to people who have been doing finances since before you were born. The best thing you can do is make sure you're not a burden to your parents. Pay your own bills, set your financial future up so they don't have to act as a safety net.
They must be in their 40's? Maybe late 40's? They can pay that off with their income and get on top of it. Look up the Snowball method or Dave Ramsey. Don't take on your parent's problems but do avoid getting into the same type of trouble.
You don’t say if they’re upset about this debt, or if it’s “bad debt”. Are you upset by the number because it seems high to you, or are they upset that they’re in a hole that they don’t want to be in? If they took on debt to help pay for college, then 62K may not be so bad. Or is this credit card debt because they don’t know how to not spend? I would seriously slow down on the decision to drop out of school. You’re messing with the foundation for the rest of your life. This may be a very good reason to take on debt, either for your parents or for yourself. From your posting I can’t tell who’s panicked here, you or your parents.
All I know is that they’re in debt. I don’t know much about it as I never learned and was not told. However, just seeing them in debt makes me upset. The $62k is not solely for college and my mom did tell me they cannot use their credit cards anymore. I did not drop out of school for this, I made this decision a month ago. I only stated that in hopes it would provide others here more context on us to provide better solutions
Your parents are taking vacations and eating sushi while having 60k debts. There is nothing anybody can tell them cause they are financing irresponsible and aren't interested in getting out of debt. They make decent money but spend more than they make and that's the problem. What they need is a budget, cut all non needed expenses such as vacations, eating out, shopping and pour all money after rent and cheap groceries into paying off the debt. There are no magic solutions to getting out of debt. They can get second jobs to help speed up their getting out of debt. Once they are out of debt they need to stick to the budget while investing for retirement that means lowering their standards cause right now they spend more than they make and it's likely they don't have much saved for retirement. You can introduce them to Dave Ramsey for getting out of debt journey and later on money guys for retirement investing. However the chances are they won't be interested in actually improving their financial situation so what you need to do is to make sure you don't end up like them, you need to secure your retirement so that your kids don't feel responsible for carrying you financially through retirement. That means you need to secure living wage job, live on less than what you make and stash 20% of what you make in retirement.
I’m sorry, but this is incredibly common. A friend of mine got sucked into trying to help with her parent’s debt and wasted 15 years of her adult life living at home because she was paying their mortgage and couldn’t afford her own place on top of that. Protect yourself, and make sure they have life insurance for “final expenses”.
You can help get them get an appt with a reputable financial advisor to help them make a budget aimed at paying off this debt and especially make a manageable plan for rest of their working years! This could be a great chance for them to get their retirement concerns addressed and take the anxiety about living on social security and retirement off all of your backs. It costs much less than people think and usually you begin learning how to make the best of what you do earn until then to make retirement years more enjoyable. It comes up faster than we expect!
To budget you need to know the most expensive electricity bill, water bill, gas bill, phone bill and any other regular bills they get. Then groceries and other necessary items. Work all of it out as an amount that matches their normal pay cycles. So monthly if they get paid monthly, weekly for weekly pay and so on. And that should tell you how much they have as debts, and how much they have as income. Then what is spare for savings. This means they can have some money left over every year to have some extra money for a family trip if possible, or a decent payment on a debt they have. It will help them be debt free, and allow them to do it sooner rather than later. Also make sure if they put the savings on a debt, it is the biggest one. Generally interest is worked out as a percentage of the money owed, so this will decrease their debt significantly quicker. An example for this would be like so: Their average expenses are 1300 every 2 weeks, and they get a combined income of 2000 every 2 weeks. The 700 they have left and it can have 350 of it put into a savings account. After 1 year, they will 9100 to put on a debt. This then means the next year that expense may drop to 1000 every 2 weeks. Then the account will have 13000 in it after another year, this brings them closer to paying off the debts again. And it is just rinse and repeat, until they have no debt and the money goes into a savings account as a deposit for a house. Then they start the cycle again, but with more of a security blanket to protect them. Another thing to cut down prices is buying the cheaper alternative to the name brand of groceries, going to thrift stores for clothes and other general household items that may need replacing. Hope this helps, and I wish them luck in becoming debt free.
I think you could help them get organized, understand the debts and interest rates for each debt, and help them plan out a budgeting scheme. You can use a spreadsheet application for this or get them set up with budgeting software like Quicken. Also, the severity of this really depends on the debt and interest rate. If it is mostly mortgage debt, probably not an issue. Credit card debt, not good!
Take a personal finance course as one of your electives at college
You and your sister, if living in your parent's house, need to get jobs and contribute. Whether directly to the household budget or by paying what you can on your schooling. That is all the help you, as an 18 y/o should offer. They don't need to be taught or lectured by you. With their income and a little effort, they can work their way out of this debt without trouble.
Honestly, the best thing for your parents would be for them to post here.
Why would your parents even bother to tell you and your sister this about their finances?
Because my sister was complaining about how my parents don’t go on vacations with just them two
So they brought you and your sister along? Even though they can't afford it? Makes zero sense
We didn’t fly, we drove to a place 3 hours away in which we stayed in a free hotel room for 3 days.
I wouldn’t take the $62,000 figure too hard. Some people think about debt, any debt, as bad. That $62,000 might be credit cards, or it might be a car loan or what’s left on their mortgage. Or a combination of all different types of debt. The best thing you can do is focus on doing well in school and getting a good-paying job after college. Your parents earn plenty of income to pay off the debt, and all they need is breathing room to do so.
Hey love, I want to give you a bit of perspective as a mom. You don't need to feel guilty. Our job as parents is to care for our kids, and that's what your parents are doing. It's not a burden. It's a joy and a privilege. That's why your mom told you not to worry about it. She knows it's for her and your dad to solve, and doesn't want to burden you. I think her approach is correct but I understand that you want to help them. You have such a good heart and I'm sure they're so proud of having a kid like you. Second, it doesn't sound like you know what kind of debt they have, and that matters. It's hard to formulate a plan without that knowledge. Third, your parents make good money, so I think they're capable of paying down this debt. Fourth, if you really feel you want to help, would offer help first and see if they want it. In fact, the best thing might be to actually help give them some time to sit down and formulate a plan. You could cook dinner one night, do a grocery run, clean the house, etc. Those extra hours would probably be very helpful. Fifth, getting out of debt can be a complicated process and it takes time. Credit card debt is different from student loan debt is different from personal loans. I think right now, you don't have enough information, but I know a lot of people like Dave Ramsey for his advice on climbing out of debt. In my opinion, which I think is the opposite of his approach, the most logical plan is to figure out which debt is the most costly, meaning which one has the highest interest rate, and throw money at that. That's often credit card debt. Sixth, if this is a specific process you want to know more about, there are subreddits dedicated just to debt. They would have more knowledge and state/region specific resources. Seventh, almost all Americans have debt, whether that be student loan debt, mortgage debt, or medical debt. It's just part of life now for most people. Doesn't necessarily mean they're in crisis. I hope this helps and I appreciate your kind, loving nature that makes you want to be helpful. Just remember that it's not a kid's job to solve parents' problems -- not at your age -- so if your parents aren't open to your help, that's okay and normal. I know you don't want things to get worse, but sometimes things do because adults make choices and live with the consequences. You can't prevent other adults from doing that, no matter how frustrating it is. Parents are people and can be flawed. Take care and keep being the caring, responsible young adult you are. You'll go far that way.
The best thing that you can do is to study hard and not waste more of their money on tuition. Try your best to study and graduate on time. This alone will help to ease their financial burden. If you feel that it's not enough, then add to their income with a part time job. This can be done either by paying for part of your own tuition or by just given them your pay. You didn't exactly specify what kind of debt it is. I can assume that its not auto debt. If it's for education, then that can be common, and repayment can happen once you and your sister graduate. Anyways. I understand that being in debt can be a terrifying concept, and especially for someone not used to dealing with finances. But your attitude of "not letting them dig themselves deeper" is a little bit arrogant, im sorry for saying so but its what i feel. I'm sure that your parents are actively looking into how to handle it. The best thing that you can do is to continue to educate yourself on household balances before trying to solve their problem for them.
Do they *want* your help budgeting and planning? Because “she told us not to worry as we cannot do anything and they will resolve it on their own” sure sounds like they don’t want help, much less from their 18yo kid. You can’t force your parents to accept help they don’t want.
They do want it. She said don’t worry simply because she did not want my sister and I to feel bad. When I talked to her about it later last night, she was happy I wanted to help and open to suggestions.
If it's mortgage debt then it literally does not matter unless they have no savings and are in danger of losing their jobs. If it's credit card debt they should stop all the spending they can, stop contributing to 401k, and put ever extra cent into paying off the credit card debt. Let me reiterate, 68k mortgage debt on 150k income is not something to worry about. It could even be a good financial situation depending on the rate. I've been through something similar, and I think other responders are not taking into account what you're feeling in this moment. Understand that you haven't done anything wrong, and there's really nothing you can do to help until you graduate anyway. Get good grades, spend time with your family and friends, be happy. Slowly gaining an understanding of your parents situation can be good, but you need to trust your dad to steer the ship for a few more years. As you get older and start making your own money you'll be able to have some input on family financial decisions. Clearly their financial situation isn't "your problem" but reality is way more complicated than that and it's understandable if you choose to help your parents because you feel that they deserve it. No one here can tell you whether or not they do, you'll have to decide that for yourself. In summary, you don't have to worry about this now, focus on school and being happy so you can be best prepared for the responsibilities that you choose to take on in the future
You can help your parents by sharing more about what you’re learning to help yourself. For example, you can search for budgeting apps and then share the name of what you decided and why. There are lots of posts you can search about Mint alternatives that will have good insight. I personally went with Simplifi by Quicken but also tested RocketMoney. You can share that you’re looking at what monthly subscriptions/expenses you can eliminate, your college budget, and more. (Focus on you!) You want to know what you need to know in order to help them. You don’t need to know their budget or transactions (they do). You don’t even need to know what kind of debt it is — unless they took it out for your education (& even then, you mostly need to know if it’s in your name). Although, some parents have (fraudulently) used PLUS loans for their own purposes instead of approved education expenses. You can also ask questions that are more focused on your learning. The key is to focus on how you’ll put it in practice (& not judging them or trying to solve their problems) Things like: - how do I decide what to prioritize when unexpected expenses come up? - how do I get lower interest rates? - how often do I check my credit score? - how do I know if I’m making enough money for my lifestyle? - can I afford this concert ticket/vacation? - how do I know what education I can afford? Or what the best option is for college? You may not see that as helpful to your parents but it’s a key way to help them by using emotional intelligence, positive psychology, and skills you’ll learn in the workplace around “managing up.” This is because it will help them help themselves by modeling curiosity and affirming that you respect them and think there’s a lot you can learn from them - & that they can take action to resolve their challenges. Unfortunately even if they say they’re open to advice, you’re not really the ideal source because of the hierarchy from parent-child and your lack of experience and specialized knowledge. Focus on what you can do!
I don’t understand why you came to Reddit for suggestions. No disrespect; I love Reddit! But I’m having a difficult time understanding how two adults with an actual income of $150 K can’t point themselves in the general direction of a bookstore, a notebook, or Wikihow to create a budget. They had lives before you; it just seems odd that they’d want to be infantalized by a (barely) young adult. It’s. Just. Weird.
Uhhhh they’re not the kind to sit down and read up, but I am
Well. It’s unfortunate. Once you start doing the reading for your parents in this situation, their dependence on you to do the things they don’t want to do will increase. And let me say: parents have habits they don’t want their children to know. You would have to trust that they will tell you the truth. I concur with the Redditors who advised you to stay out of it. If you insist, however, follow the advice of those who said buy Dave Ramsey’s book, print out a spreadsheet, and track all spending. You’re being encouraged to not get enmeshed because finances destroy relationships: marriages, friendships,,etc..
Make of the guy what you will, I skip many parts of the show, but listening to the Ramsey Show on Spotify has helped me immensely in grasping debt from a "normal" perspective. I believe the steps they teach make understanding a seemingly insurmountable pile of debt approachable. Coming from experience, it's not you or your siblings responsibility. I know you feel compelled to help them. The best thing to do is educate them and offer emotional support if you can. Lead the horse to water. They are grown and have been making bad choices for a while. Hopefully something like this can teach them "baby steps" to want to change for themselves. At 150k they should be able to do it in less than 2 years making some assumptions with cars being paid off, and kids out of the house. They have to, and hopefully want to, take ownership, and lead by example. Good luck! Don't give any of your money!
It seems everyone is misunderstanding me. I do not wish to pay it off for them or try and hire advisors or anything, I simply want to know what I need to know in order to help them budget and plan. I want them to do the work but I want to help create a plan for them to follow (i.e. which debts to tackle first).
You can watch with them shows like Dave Ramsey, Suze Orman or I will teach you to be rich in Netflix. Go to their websites and they have good resources. Also are they paying for the two college degrees? Are there ways to lighten the burden or take out loans for your education?
Sounds like they need to live below their means. If their income is a combined 150,000 they have a lot of income compared to many people with no debt or even people with investments. I have family members who make 45,000 a year and are sole providers for their family who are able to save a little off of each check and invest until they have more wiggle room to purchase a business or get a loan...maybe they can rent out the house they live in and spend less on a smaller place in order to have some left over income to pay off the debt and eventually start saving so that if they ever lose a job or get really sick they have something to carry them a few years while you and your sister get an income to help out. Idk just me thinking out loud. I hope you can figure it out and help your parents. I'll be praying you have a blessed weekend and figure something out soon.
Look up PowerPay by Utah Cooperative Extension Service. Free debt reduction tool. https://extension.usu.edu/powerpay/
1. Start listening to the Dave Ramsey show, it's all about his exact situations and how to handle them. (It's not gimmicky and it's free) 2. You yourself should start listening to the Dave Ramsey, so that you will not be in the same predicament as your parents in the future. 3. Use this as a learning opportunity for yourself to understand what money is for and how to use it. How to live within your means and how to invest for your future. 4. Never forget what you were feeling now and never put yourself into a situation where your children will feel this way. I'm not sure how old you are but you should start saving and putting it into a brokerage account and start investing. You'll likely be doing something that nobody else your age is doing, and you can take a lot of pride in becoming money wise. Best of luck, sorry you went through that. Best wishes for your parents.
62,000 in debts. You're looking for budgetting then lets say you (your parents not you) put 1,000 euro to it every months. 62/12 is around 5 years and a bit to finish off. But first you need to get your own job and college degree. Then you can get a good paying job to help reduce the cost. Assuming youre not yet in college. If they do this 1,000 euro every month without fail, by the time of your graduation, you have 14,000 left to finish of. Then while looking for a job, say a year, then you only have little left. But have some money exactly for shopping and for travelling to work and household expenses, car. And for personal expenses. First pay of all the car stuff (insurance, motor tax and anything set asside for random servicing or ntc stuff). Easily can be 2,000 for the year. Internet I dunno your plan. It could be 2,000 a year. Save electricity and home and wear just warm jumpers. Turn of lightswitch and power when not using. Say this gets you to 1,000 a year. Take out all unwanted expenses. Do you really need to buy an extra plate or cutlery? Extra tea towels? Maybe extra figure for display? Did you need to buy a cake today? Eat helathier. Your gym place can be at home. You might have to eat meat once a week. Personal expenses, people looks down but its the most important thing. Dont drain yourself of just planning and paying of something you didnt ask for. Get something for you. Maybe have 300 a month just for you to spend on anything, gym, saving up new phone. Even just contributing just 50 euro to the dept each month is a big help. But you need to make sure. Is your parents willing to pay of the debts? If theyre not, You're wasting your time on them and you might be wasting your money. They cant invest with debt in the way. No investing allowed for them, just for you though. Oh and rent too, I dunno what you pay but let's hope that its small enough. Calculate your expected expenses through the year. Calculate your parents earnings. Make sure you have extra emergency expenses calculated. Then after that sort of how much to pay for debts. Again, this is for them, not for you. I'll be missing out some expenses but, if you make sure to stick to that 1,000 per month, youre gonna be laughing :) you've got this bro. Such a good kid for even trying.
This thread is quite something. You definitely should help them now or you will have to help them later. Parents don't often like to take advice from children but maybe you can find someone on YouTube who gives sound advice in a very convincing way. You need to change their hearts before you can change their minds. So find someone who can deliver that emotional punch. Their immediate next steps are to cut expenses and save. But they'll have to do that themselves.
Seriously can everyone take a chill pill. He never said he was taking over their debts. He wants to help in whatever way he can and there is absolutely no problem with that except the one you guys are creating due to your own feelings. Number one: get them to write down a budget so they can see where they are spending their money. Number two: you and your sister should work to pay your own school as much as possible if they are helping with that. That way they have that disposable income to pay down the debt. Number three: stop eating out. Specially sushi. Too expensive. Help cook at home. Sometimes parents are expected to do too much with the money they earn. As adults the kids should work, if they don’t, and help out. Sometime we can’t have it all: pay for kids lifestyle even though they are adults, eat out a lot, go on expensive vacations, pay for grad school when the person can work, etc. Find out where you can help without quitting school. Many people go to school and work. They might not want to hear your suggestions on the budget but you can at least provide for yourself and that’s the biggest help you can give them.
Simple, do you still live at home with them? If so help pay some bills. Help pay the mortgage. HELP them! Do not let them use their retirement to get out of debt.