How to approach fixing parents personal finances? [closed]

Question

I'm posting this today to get some advice in case anyone here has dealt with anything similar. I'm including some background because it plays into the situation (i.e. cultural differences)

Background: Early 20s, first-gen latin-American immigrant, engineer

Problem: My parents are some of the hardest working people I have ever encountered yet their personal finances are a total mess. After the recession, they encountered a great deal of success in their small business. This led them to invest in 2 homes - in addition to the modest home we lived in growing - that are totally paid off. They built up a small IRA nest egg as well. However, the homes have not been completed because of my father's inability to remain organized and stubbornness when it comes to his business and personal finances. This has totally created a situation where ROI is a non-existent. Being technical, there is a loss the longer they don't complete these projects.

For example, my father has this thing with credit cards where he buys things with them but doesn't prioritize paying them back (interest sucks), he doesn't view investments as assets that should work for him (the houses), can sometimes disregard our opinions (b/c of a traditional Latin American view of father as the head of household).

Part of the problem is a total cultural rift between my view on finances and that of my father (my mom is a better listener). They are in their 50s so I don't anticipate they will have the physical stamina to keep working in their line of business much longer. I worry that their sacrifices of years of work and immigrating to the US will not be enjoyed by them because of their lack of financial discipline. What can I do to help them get organized? Has anyone dealt with this before?

Answer 1

This situation happens to a lot of people in several cultures. It's sometimes called powdered butt syndrome (which is a funny way to say once someone knew you as a child, or powdered your butt, they really don't care about your opinion on mature topics like money). This can make it really hard for you because you hate to see your family do stupid things with their finances. There are a few strategies you can try, but ultimately unless they see the problem and have a desire to fix it, nothing you say or do is going to help them.

Strategy 1: Is there someone they respect who is in a similar life stage or older that could speak into their life? (Someone from their church if they go to one, or another community gathering place they frequent. Or since you mentioned the homes, someone with investment property.) Ask that person to speak to them about how those investments are paying off? Be sure that the person doesn't hint you put them up to it, as that may backfire.

Strategy 2: As young as you are, this one is not as likely to work. Do you have any stories about how you're either winning financially? Or a story about how you were doing something stupid financially, but realized it and changed (leading to improving your situation)? If so, then openly tell your story. There is a remote chance they'll be intrigued and provide an opportunity to open financial discussions with them. Just be very careful not to bring up their finances or their decisions. Keep the stories about you. If and when they open up, only ask questions (don't tell them anything they may be doing wrong). Keep the questions vague but guiding, "How are your plans going?", "Is there something you wish you did differently?", etc. Try to get them to come to the conclusion without saying it. (Again, this one is tough because you are so young and likely don't have the life experience to have drastic stories, but you may.)

Strategy 3: Recommend some resources by financial experts. Because your mom is the better listener, maybe get her on board with reading books they can get from the library. The Total Money Makeover I think is a great one (https://www.daveramsey.com/store/product/the-total-money-makeover-book-by-dave-ramsey?gclid=EAIaIQobChMI9uWTrYeN4AIVibjACh0mCgigEAQYAiABEgIh-PD_BwE) But there are lots out there. The writer, Dave Ramsey, also has a radio show/podcast that discusses matters of personal finance. This question has come up on his show a few times. Youtube has a lot of his shows available. (It sounds like your folks are doing better than a lot of the callers since your folks have the properties paid off, which is awesome.) If your mom is willing to read and listen to the show (especially in ear shot of your father) then they may get inspired to change.

Ultimately, they are adults. As painful as it may be, you may just have to be okay with them making bad decisions. Please be careful, as prying can hurt your relation with them. Hope this helps and best of luck.