Just found out my mom is in serious financial crisis. Need help ASAP.

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Dottie57
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by Dottie57 » Tue Jul 04, 2017 9:51 am

matto wrote:
Dottie57 wrote:
sawhorse wrote:
nedsaid wrote:I consider this to be immaturity and mom needs to grow up when it comes to finances.

What your mom needs is a lifestyle change and what she wants is a quick fix. My concern is that you could take gobs of time and effort, get your mom straightened out financially, and then just have her relapse back into bad habits again. It is obvious that she has a spending problem and quite frankly, I don't know if this can be corrected. The problem will be corrected if Mom wants to correct it bad enough. My suspicion is that she doesn't really want to correct things and just wants temporary relief.
I caution against such haughty, judgmental, and frankly ignorant comments. Some (not all but some) cases of overspending are like addictions with the same underlying factors you see in gambling or eating or alcohol addictions. It's not a matter of the problem resolving if you want it enough. Those cases need professional help which is ironic given that's what the mother does for a living.

The problem is, spending more than you make and not paying bills is indeed a sign of immaturity - especially when one makes a good amount of money. An educated woman should be able to do basic math. And as a psychologist she should be able to see her behaviour as self-destructive and seek .change in behaviour -not a quick fix.
"That alcoholic is ruining his/her life. An adult should be able to control how much they drink."

Doctors have some of the highest rates of substance abuse. Shouldn't they know better?! Shouldn't they be able to stop?! It's not so simple.

By this logic, the depressed/bipolar should be able to get themselves treatment (they resist it), as should addicts. The mother reached out, so it sounds like she is trying to fix things, even if it is late.

Unfortunately we are imperfect creatures. I agree strongly with Sawhorse If the OP's mom ended up being undiagnosed bipolar would that change your opinion? I'm not saying she is, I'm just saying that it getting yourself into a predicament like this is a sign of immaturity it is also a sign of a mental deficit, at the very least poor impulse control and at the most extreme a full blown disorder (e.g. bipolar). It sounds like the mother would benefit from seeing a therapist/psychiatrist, and there is no shame or contradiction in a psych needing to see a psych for themselves. There's a reason we don't allow doctors to treat themselves, and it is that same reason which explains why a doctor would miss something in themselves we expect them to notice in others. Athletes don't coach themselves either.

But it is nonproductive to tell someone to just grow some willpower and that their immaturity brought on their own mistakes. In a sense, it's absolutely true, but it's also nonproductive as advice and seems more about punitively putting down someone rather than addressing the situation.

We mostly disagree. Neither of us know the individuals involved. I don't have a prescription for turning the situation around. But I am sure the overspender needs to know the consequences to themselves and family. No sugar coating. Not every case of of poor jusgement or behaviour goes has a mental disorder behind it. And yes I have known good friends with both disorders. (depression, bipolar). Both had to admit a problem in order to get better.

The post which started this set of replies was neither haughty or judgemental. It was extremely blunt.

mouses
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by mouses » Tue Jul 04, 2017 10:15 am

I would not rush to sell the house or wipe out the annuity.

Your Mom has a good income. She has to immediately cut her expenses to the bone and then start paying off the debt.

Pay off the highest interest and penalty debts first. I think the IRS interest rate and penalties are substantial, so I would look at that first and see if she can get some things reduced and commit to a payment plan that she will follow (emphasis.)

I think she should look into counseling from a fellow psychologist about the spending problem. Perhaps she can get a reduced rate. He or she can help her set goals and understand why she has this problem.
Last edited by mouses on Wed Jul 05, 2017 6:11 pm, edited 1 time in total.

Minot
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by Minot » Tue Jul 04, 2017 10:19 am

whomever wrote:Looking forward a few years: the max social security benefit for someone who retires at 70 is around $42k.

<snip>
.
That's assuming that she has been reliably paying into Social Security. Since she's in private practice, it's presumably been up to her. It's pretty certain that she hasn't contributed the last few years, since the self-employed do it as part of their federal income tax filing.

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8foot7
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by 8foot7 » Tue Jul 04, 2017 10:29 am

You will want to get the IRS out of your life as soon as humanly possible. That's a hair-on-fire emergency. I'd do whatever it took to have that wrapped up in 30 days. Then you can take a deep breath and a deeper look at how to address the other stuff.

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nedsaid
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by nedsaid » Tue Jul 04, 2017 10:42 am

I don't think we should be trying to diagnose the mental condition of people that we don't know. Mom has a financial problem and turned to one of her children for help. What I am saying is that the child should provide options but it is up to mom to make her own decisions. There are people who just like to spend. The original poster has said there is no indication of gambling, drug or alcohol, or other addictions and I take the person's word for it.

We all want to believe that we can be the hero and swoop in and solve all the problems. Real life isn't like that. A lot of times people "want" help with something and then balk at any solutions. I am not saying that a child shouldn't help her mother, but I am just saying to have realistic expectations. It might be that things will work out A-OK but it will take some time.

I think this is potentially fixable and evidently this isn't uncommon. Another reason I counsel caution is that potentially the house and the annuity could be saved, the easiest thing would be to put everything up for sale for the quick solution. There might be a longer term and a better solution.

The thing is, Mom has done many things right and we shouldn't overlook that. A good professional career and made some good money and probably raised good children. I have known all kinds of people who were great with some areas of their life and not so great with other areas of life. We are all like that do some extent, none of us are great at everything. So this isn't just dumping on someone. There are good things to work with here.

There are some things in life with which we muddle through. Not everything has a clean and tidy solution. We deal with things best we can and hope for the best.
A fool and his money are good for business.

evestor
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by evestor » Tue Jul 04, 2017 11:35 am

I'll post some good news as you posted plenty of bad news already.

Your mom is in a career where working beyond 65 is not only ok but fairly ordinary. Often times people practice in to their mid to late 70s. I have even seen later (though this is questionable).

Her income is solid.

She recognizes she has a problem. Granted it is pretty late. But better now than later.

Good luck.

michaeljc70
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by michaeljc70 » Tue Jul 04, 2017 11:48 am

I'm not sure where she lives and if she could find a place to live that would be a lot less expensive. Though she has a good income and can pay down these debts with that, I would worry about her retirement. Even if she plans to work for years, sometimes health issues prevent it. The social social security max benefit is way less than $110k. The annuity will help, but even if she gets all these debts paid down, how is she going to live on SS+annuity when she cannot live on $110k?

Vanguard Fan 1367
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by Vanguard Fan 1367 » Tue Jul 04, 2017 11:55 am

Minot wrote:
whomever wrote:Looking forward a few years: the max social security benefit for someone who retires at 70 is around $42k.

<snip>
.
That's assuming that she has been reliably paying into Social Security. Since she's in private practice, it's presumably been up to her. It's pretty certain that she hasn't contributed the last few years, since the self-employed do it as part of their federal income tax filing.
The IRS is not excited about someone in private practice not paying into Social Security. Obviously the IRS knows who she is because she owes them a lot of money. They will make her pay the Social Security or face some nasty consequences.

pkcrafter
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Re: Just found out my mom is in serious financial crisis. Need help ASAP.

Post by pkcrafter » Tue Jul 04, 2017 12:32 pm

nedsaid wrote:
sawhorse wrote:
nedsaid wrote:I consider this to be immaturity and mom needs to grow up when it comes to finances.

What your mom needs is a lifestyle change and what she wants is a quick fix. My concern is that you could take gobs of time and effort, get your mom straightened out financially, and then just have her relapse back into bad habits again. It is obvious that she has a spending problem and quite frankly, I don't know if this can be corrected. The problem will be corrected if Mom wants to correct it bad enough. My suspicion is that she doesn't really want to correct things and just wants temporary relief.
I caution against such haughty, judgmental, and frankly ignorant comments. Some (not all but some) cases of overspending are like addictions with the same underlying factors you see in gambling or eating or alcohol addictions. It's not a matter of the problem resolving if you want it enough. Those cases need professional help which is ironic given that's what the mother does for a living.
The mom is a mental health professional and knows about addictions. Doesn't mean she doesn't have one but at least she knows help is available. It sounds like she does not have a gambling problem. From the information provided, it doesn't sound like she has an underlying addiction problem but we don't know. It sounds like she likes to spend money and likes a nice lifestyle. Not a sin but certainly her desires outweigh her means.

My concern is that the original poster might be set up for disappointment. It is very difficult to change years and years of habits. This might be a problem that the original poster can't fix.

The other reason I posted is that this might be a manageable problem. I would hate to see the mom sell the house for a quick fix solution with the strong possibility of this happening all over again. Perhaps, mom can work through this over time and keep her house. With a slower and longer term solution, there is a better chance of good habits being developed.

I know for myself, I have millions upon millions of dollars of unfulfilled dreams and desires. I have to live within what I actually earn and thus have to focus on those things I truly want the most. Few people ever have it all, for most of us it means making choices.

I am neither haughty or ignorant. I am trying to bring some realism here.

The original poster should help mom. What I am saying is that mom has to make her own decisions and hopefully the original poster can help present good options. Sometimes, when you try to rush in and help, those efforts can be deeply resented by the recipient. Mom is an adult, a professional woman, and competent to make her own decisions. By definition, mom will have to make whatever decisions are necessary. Original poster isn't going to court to get control of mom's affairs.
+1. Son can help to a point, but he cannot be dragged down because mom won't stop her addiction. Mom probably does need professional counseling, and in fact, she may respond to that more than anything else.

Paul
When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.

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