my parents' very messy financial situation- what do you think?

[FrugalFish]

I think you should have a little heart-to-heart with your sibblings. It won't be easy for any of you, but they need a reality check that Mom and Dad just can't take any financial responsibility for them anymore. You don't have to be nasty about this, just honest and get the point across. They are old enough to understand this, even if they don't want to accept it.

How big is the house they live in? Once your sibblings have moved out, is downsizing a possibility? It doesn't always make sense to downsize, but if they are in more house than they need, and moving would possibly pay off some of the loans and allow them to move into a smaller house with lower property taxes and less to take care of, it might make sense.

Personally, I'd dump the cell phone plan. Bro & sis can get their own, and if Mom and Dad *need* one for emergencies, maybe they can share a prepaid phone like DH and I do. No one has the number to call in, but DH and I pass it back and forth depending on who needs it. After paying a minimal amount for the phone, an entire year costs $100- that's it. It amounts to about 35 minutes of calls each month- more than enough to make an emergency call or two.

I'm torn on phone/internet/cable because if they don't get out much, these items are sometimes like a connection to the outside world. If it works in the budget somehow, I would keep it, but would also keep it in mind as something that can be cut or scaled back if necessary.

And like the others said, you should not contribute your own money to the situation. Do your part by helping them sort out their finances. At least it sounds like they are accepting of your help.

Good luck.

[Aleta]

Suze Orman has some great advice about saving for college education for your kids. She says that you are to fund your retirement first before anything and by doing that you are helping your kids by being able to take care of yourself in retirement. Dhe says there are always student loans.

I like her thoughts: You can't get a loan for retirement but you can for a student loan.]

[BCHGRL]

I agree with Aleta. You can't always help those that don't want it, and many times you spin your own wheels trying to solve their burdens. I get frustrated with my parents because they have so little saved for retirement and my mom seems to be a magician in that she is great at making money disappear (even though I love her dearly). When I suggest the same things to my mom about increasing her employment opportunities, I get the same answer as well.

You don't need to contribute to the problem by giving them money. Your sister and brother are from the entitlement generation that seems to grow stronger everyday.

It sounds like you are similar to me. I am the oldest sibling, and I feel that my parents well-being is my responsibility. I'm an overachiever of sorts and it baffles me that people don't want to strive for more. Slowly I am learning that not everyone is like me, and I can't fix everybody's problems or pass on my motivation to others. Just be thankful that you know what it takes to be successful and that one day you will really be in a position to give yourself and your family a better life.

[almostalumping]

Thanks so much for all your responses!

I had a serious talk with my siblings, and I have some good news to share because both of them have really stepped up. My sister did some digging and realized that both she and my brother qualify for a monthly stipend from the VA since they are in school and dependents of a 100% disabled vet. My sister has already filled out and sent off the paperwork, and my brother is starting to work on it. There is a good chance that they'll get a retroactive payment starting from Oct 2006 (when my dad's 100% disability claim when through), and they both understand that if the retroactive payment comes, it's going right to the tuition that is left after loans. My sister will also keep her part-time job.

My brother now has some savings after starting to work, and he decided to take out his $3,000 CD and give it to my parents to pay them back for his car insurance, tuition, and all the spending money they've been giving him. I put that right into the HELOC (8.25%).

We're still looking into taking out some of my dad's retirement to pay off the remaining loans. I think that I want to wait until January 2008 because with their current income they qualify for the earned income credit for 2007 (~$1900), and I'm pretty sure they wouldn't get it with the extra income from the retirement. I think the extra $1900 in the tax refund might be worth waiting a couple more months to take it out. The other, probably more important, factor is that my brother wants to transfer to a 4 year college from his community college next year, and they'll look at 2007 income to determine eligibility for subsidized stafford and perkins loans and PA state grants.

Things are definitely looking up, and I wanted to thank all of you again for your help!!!

[Aleta]

Happy to hear that things are working out. Keep us informed.