Thursday, July 02, 2009

Weekend With the Parents

It was a couple of weeks ago now that I went to visit my parents. It had been a couple of months since I was there, which seemed okay since my father's health has been relatively good, but I was getting anxious about visiting again so I'd have a chance to check on my parents' finances! I'd been hearing lots of stories about all the things my mother was trying to get done around the house, and was starting to worry about how much money she was burning through.

You may wonder why my mother would be doing all this. She's a full-time caregiver to an invalid husband, so where does she find the energy to deal with hiring people to paint the house, pull out trees and shrubs, replace the windows, and put up a new fence? She also had people giving her estimates for repaving the driveway, putting a new roof on the porch, and gutting the one full bathroom in the house. She did acknowledge that this last item was crazy to do given my father's health situation-- which is why she was also getting an estimate on expanding the downstairs half-bathroom into the garage and adding a shower stall.

My mother is just manic when it comes to home improvements and decorating-- it's a bit scary. My father has always checked her impulses to do these things, but now he doesn't have the energy. My mom was also quite inspired by our estate planning conversations with the lawyer several months ago. He said that if my father was about to go into a nursing home, it would be a good idea for us to spend down some assets so he'd be eligible for Medicaid sooner, and that putting money into improving the value of the house was a good way to do that-- music to my mom's ears!

After spending some time going over all my mother's credit card receipts, I had to tell her to put the brakes on any further projects. At the rate she's burning through money, my parents will be broke within 10 years, and this is not even counting major expenses for the house, or funerals, or potential costs like a nursing home. My mom is only 65, so this is a major problem.

When my father first got sick almost a year ago, I went through all their accounts and bills and put together a budget that I thought would allow them to live very comfortably, without changing any of their habits. I was happy to see that the budget would stretch their savings out to last over 20 years. I knew they'd have to be careful about major expenses, but I also knew that some of their expenses would decrease as they got older, so I wasn't too worried. But unfortunately, when I made that budget, I made two major errors. First, I didn't account for the fact that my mother hadn't actually been living with my father for almost a year. I thought it would be enough to take his grocery spending and more than double it. I might even have tripled it, just to be safe. This came to a budget of $775. But now that my mother's back, her actual spending on groceries tends to be more like $1500 a month!

To be fair, she doesn't only buy groceries at the supermarket-- she buys cleaning supplies, paper products, and sometimes plants and cosmetics. But still, it just boggled my mind that she could spend that much, especially since my dad was on chemo for most of the past 6 months and didn't have much of an appetite. I'm still a bit baffled-- she's not eating caviar and steak all the time, and most of her spending is at Stop and Shop, not Whole Foods. I think she just somehow consumes a lot.

The other budget item I got wrong was medicine. Although my dad has supplemental insurance and a prescription plan that gives him better coverage than Medicare, he has so many ailments and takes so many medicines that his co-pays seem to be coming to over $300 a month. I had budgeted about $50 a month, which I should have known was way too low.

When I re-ran all my budget numbers, I felt almost nauseous. It was the same kind of stress I felt when I learned several years ago that my mother had run up $50,000 in credit card debt. I thought since then that she had learned a lesson, and that my openness about the family finances would have cleared up her illusions about there being unlimited funds for her to spend. And in a way, she is being more conscientious-- she's spending money on the house because she thinks the lawyer told her she should. And as far as the rest of the budget went, the problem is that her idea of normal and necessary spending is just different from mine. But it was just extremely frightening to me to feel like my family was speeding towards a financial disaster. I was so wound up and frustrated one night, I ended up just crying in Sweetie's arms.

The next day, I sat my mom down for a talk. I tried to include my dad, as he sometimes seems to feel insulted when he's left out of things, but he walked away halfway through the talk, as if he just couldn't handle being involved. My mother had been jokingly referring to me as "her accountant" and telling the contractors who gave her estimates that she had to "get permission from her bookkeeper" but I tried not to get too dictatorial with her. I told her that I'd looked at over 6 months of her actual expenses and that they were much higher than the budget I'd originally done. I said she could go ahead with having the outside of the house painted, which would have been done already if not for the rain, but that I wanted her to put a total stop on any further household improvements for 6 months, and try to see if she could cut back some areas of her spending, emphasizing that it was her money and her choice in how to spend it, but that once it was gone, there would be no bailout available to her. She could make some moderate changes now, or she'd have to make drastic changes later. I explained that there was not much buffer for emergencies and that the only other source of income she'd have would be a reverse mortgage, which still wouldn't cover her spending at her present level. She didn't seem too happy about it, but asked for a printed out copy of the budget and said she wasn't sure how she could cut back but that she'd try.

I thought I'd gotten through to her but a couple of days later when I was back in New York, she called me at work and then said "you know, I'm still going to just go ahead and have the driveway repaved, it's only a couple thousand dollars." I just lost it. "No, Mom, do NOT repave the driveway. The driveway is fine. This does NOT add value to the house. You can NOT afford it. Would you rather eat for a couple of months or have a smoother driveway?" I was probably a little too harsh and she got off the phone in a bit of a huff but I think sometimes I have to be harsh to get through to her.

I talked to my sister ZZ a little while later and she said "Mom's kind of depressed. She's freaking out about the budget stuff." ZZ also can't get her head around the immense amount spent on groceries, but she did have one good idea for cutting some money out of the budget. My parents spend several thousand dollars a year to have someone do their landscaping and shovel in the winter. ZZ pointed out that she and her husband could just visit more often to mow the lawn in the summer, at least, and that they could probably pay some neighborhood kid much less to help shovel in the winter. We'll see how this works out. I hadn't originally thought the landscaping was something to be cut because I was focused on not causing my parents any extra stress or discomfort, but I need to think more creatively about it. We'll all be trying to find ways to balance their budget over the next few months... we'll see how it goes.


Anonymous said...

You need to figure out what's going on with that grocery bill. If it's all on the up-and-up, then food must be getting thrown out or given away or something at an extremely high rate.

Anonymous said...

In a true Darwinian financial world it be mom who was sick and dad healthy. Oh well...

Personally, I would write my inheritance off and let mom sink into the sunset. She has shown repeatedly she does not want your help. I'd begin distancing myself from the car wreck speeding down the highway; otherwise, your mom will take you with her: both emotionally and financially.

Harsh, but there it is IMHO.

Anonymous said...

kinda have the same situation with my mom and dad. i always tell them to put the brakes on the spending and they end up being upset with me and telling me to 'leave them alone. they're not stupid.' it's very difficult because as their child, i want to help them with budgetting but if they don't want to listen, there's nothing i can do...

Anonymous said...

DH is getting ready to have the same conversation with his mom, not because she is overspending, but because of the drain that his sister and her 2 kids are having on his mom's finances. Long story, but bottom line is that mom can no longer support all 4, but yet can't say no when asked for a handout. He's hoping that the budget and conversation will have an impact on them, but he's also making it clear that he is there to support them emotionally, but not there to bail them out. If his mom chooses to continue to give handouts, then we have to walk away. It's really hard, very emotionally draining for us, but I'm proud of him for doing the right thing for all involved.

mapgirl said...

$1500 for two people for groceries? Maybe you should go shopping with your mom and actually watch her as she makes her decisions. It could be that she is stocking up on things she doesn't need and gives them away later without taking a charitable donation deduction, etc.

I sympathize with you and having to talk to your mom about her spending. There's been a moment here and there in life when I've smacked myself in the forehead after my mother's told me of some insaniac financial transaction she did with our family business or with her retirement.

Good luck. I know it's frustrating and it sounds like Sweetie is a good person you can share it with.

Jerry said...

I had to re-read that figure for groceries, as well. $1500 per month leads to some serious head-scratching, as that is a monstrous figure for two people. What exactly is she buying at the grocery store? I wonder if she is thinking that becoming eligible for Medicare insurance will cover all of their living expenses, or something? Good luck with this, it's got to be frustrating beyond belief...

Boston Gal said...

Hi Madame X,

Having gone through the whole weeding through my parents finances and having the budget talk with them - I know a little of what you are going through.

Like you, I thought my parents had taken in everything I had said and embraced a new financial reality after our long weekend of spreadsheets and heart-to-heart financial reality discussions - but alas, it did not take as well as I had hoped.

It was not a failure either - they have cut down a lot of the stupid spending and have even found small ways to bring in a bit of income here and there. But they are still spending down their assets at too high of a rate for my comfort.

But a couple of years after the big financial talk weekend, I can't really see how to fix this for them. Sometimes you have to step back and let the inevitable just happen.

Hopefully you and your sister have talked about what might happen after your Father is gone and your Mother is unable to support herself with her current lifestyle. You might want to start putting her name on any and all low-income housing lists near you and/or your sister. It can take years of your name being on such a list before a unit opens up - so putting her name on them now would be wise. If that does not pan out and neither your sister nor you can picture your Mother living in your homes - what about planning to sell the current home and purchasing a two or three family in a different area with the money? She could live in a unit and get some income flowing in - plus she could turn her home improvement energy into some tax write-offs for the rental income...

Not sure that there really is an answer here - but you do have my heart felt sympathy for both your Father's illness and your parents financial situation.

Moneyapolis said...

Sorry you're going through this. My parents tend to be on the secretive, obstinate side, so the fact that your folks even shared their budget/spending with you at all is encouraging. But ultimately it's their money and their lives, so like other commenters said you'll have to step back and let them deal with the consequences. (Which I know is tough when you want what's best for people you love, and they're clearly going in the wrong direction!)

negative_net_worth said...

That grocery bill for two does seem out of control - does your father need specialized dietary items because of his illness?

If not, it does sound like impulse purchase may be to blame...since she would probably change her habits if you went shopping with her, you wouldn't get a chance to see what she's buying. Perhaps you could have her save her receipts so you can eliminate the waste or set her up for grocery delivery service to keep her out of the store and avoiding these impulse purchases.

It sounds like a very difficult situation, I know my parents would not be happy if I tried to get involved with their finances - it does sound like you need to do it, but I can see how difficult it must be emotionally. Good luck - I hope she starts to take your advice!

Anonymous said...

$1500/month for groceries comes to about $50 per day. There's no way that she should be hitting that high of a number unless she's buying too much and then throwing things away when they go bad or letting them sit in the pantry until they expire. My mother does that-- she still buys like she has teenaged boys in the house-- but even she doesn't do it to such a high degree.

If you're looking for creative solutions, would having groceries delivered be an option? Maybe filling out a delivery form and seeing the total as she's doing it would push her to buy less. If she fills out the form at home, she could also check her refrigerator/pantry and avoid buying things she already has on hand. Plus she won't be able to see the impulse items on the shelves, so there's less of an opportunity to be impulsive. Normally I wouldn't think of having groceries delivered as a cost-savings technique... but in her case, the reduction in spending might more than offset the delivery surcharge.

finance girl said...

I would encourage you and your family to meet with another elder care attorney who specializes in late life issues.

Spending down one's assets is frowned upon by Medicaid, and there is a 5 year lookback period, meaning that anything spent to get assets down will be considered as assets still available.

In contrast to that, when a Medicaid applicant has a spouse, there are limits on the assets that can be considered so as not to impoverish the other spouse who is not in need of full time care in the form of a nursing home.

The bar for qualifying for Medicaid is insanely high, but is excepted to some degree when there is a living spouse.

Bottom line please please please find yourself a second opinion (additionally this person should be a CPA as well as Elder Care Attorney.)

Anonymous said...

Have you recommended powerwashing the driveway? It does wonders and, while it won't eliminate the cracks, it will otherwise make it look new.

Anonymous said...

Wow! 1500$ for groceries is a lot. The only way I can imagine spending that much would be if I ate out/ordered in every day. And alcohol...Is you mom a drinker? Some people drink a bottle of wine a night. Perhaps she is buying expensive wine and racking up those grocery costs.

I also know how hard is is growing up with parents who can't control their spending. My parents didn't use a budget. I grew up in a house my parents couldn't really afford. They took money from my grandma every month.

They were always buying stuff they didn't need like movies, stuff on "sale", electronics, future gifts, and random junk. Yet they were failing to put away money for future renovations on their house. They have carpeting over 20 years old, torn and stained; the foundation is sagging and needs a 30,000 dollar fix.

Today, my parents are both out of full time work. The house was paid off with my dad's retirement money but they still have property taxes of 8000 plus living expenses.

I saw this lack of planning growing up and I see it now. I have worried about them too much. I can't do anything to help and they don't want advice (took me many years to realize they don't want advice from theie college age daughter). Many times people need to make their own mistakes and learn from them. Please don't worry yourself into an anxiety attack. I've been there, felt helpless, but there isn't much you can do. Just pledge to be there for them if they ask and teach your own children how to handle money.

ChiefFamilyOfficer said...

I wanted to come out of lurkdom to say that I've really appreciated you posting about this difficult situation. I wish you and your family all the best!