money relationships

How to Deal With Financially Irresponsible Parents

November 12, 2020 By Kathryn Vercillo Leave a Comment

As an adult, you take it upon yourself to deal with your finances. Unfortunately, not all adults do the same thing. And perhaps it’s not a skill that you learned from your parents. In fact, many adults today struggle with the fact that they have financially irresponsible parents. Families are complicated. Money is complicated. Therefore, money can get really complicated in families. But it’s possible to find ways to work through those challenges.

Identify The Problem

The first thing that you need to do when it comes to dealing with financially irresponsible parents is to identify the problem. Why does their financial situation bother you? What are the deeper underlying emotions and fears that make this such a challenging issue for you? After all, some people would just say, “well, that’s their problem” and not worry about it.

How to Identify The Problem

You want to do two things when identifying the problem:

Identify the tangible problem. What are the actual issues arising in your parents lives right now due to their financial choices?
Identify the emotional problem. What’s going on with you emotionally in your reactions?

Many of us know that many is a logical tangible thing and yet we respond to it emotionally. When dealing with financially irresponsible parents, you may react strongly with anger, frustration, overwhelm, anxiety, guilt, stress, irritation or a bunch of mixed feelings. Some of those feelings probably date back to childhood. Others may be valid responses to the situation. But in order to deal with financially responsible parents, you need to sort that out.

Common Concerns About Financially Irresponsible Parents

So ask yourself very specifically, “what are my concerns about my parents?” Common worries include:

I will have to take care of them financially in the future. (Perhaps you already do so.)
They aren’t going to be able to afford a good quality of life, including medical care.
It’s frustrating to work so hard to be financially savvy when they’ve never done so.
It irritates me that they don’t know how to take care of their money.
My spouse and I are constantly fighting because of my parents or in-laws money choices.
I feel obligated to help my parents financially but I’m angry about it.

Addressing the Problem

Once you’ve sorted out the emotions from the actual financial difficulties, it’s time to address the problem.

You might want to address the emotional aspects through therapy. After all, the better that you’re able to handle the conversations about money, the better those conversations will go. You don’t have control over what your parents do or how they engage with you. However, you do have control over your reactions. Managing your reactions can help improve the entire relationship. So, consider working through your childhood and ongoing family issues about money in therapy.

Someday, of course, you might want to address the emotional content with your parents as well. But first handle the tangible stuff. Figure out the exact issues you want to address. Then ask your parents if they’re willing to have a conversation with you about your concerns. Hopefully, they’ll agree and you can have a calm conversation. If not, some families find that using text messages, voice mails, emails, and handwritten letters can get difficult conversations started.

Steps for Addressing the Problem

If your parents are willing to talk, here are the steps that you can take to address the problem:

Use an I statement to express your concern. “I feel worried about (this aspect of your money) because I care about you.”
Be very clear and precise about the thing that concerns you. If you have multiple concerns, consider addressing one at a time. For example, “I feel worried when you spend a lot of money on travel because I’m afraid that you won’t have money leftover to pay the mortgage off after you retire.”
Ask your parents if they feel the same concern. Listen thoroughly to their response. After all, you might discover that they have a retirement plan you didn’t even know about. Even if you don’t, you need to know if you’re even remotely on the same page.
If you both share the concern, brainstorm ways to solve the problem.
If your parents don’t share your concern, ask if you can give them some examples of why you’re worried. Be descriptive. “It seemed like you paid about $5000 for your last vacation. I was thinking about how that $5000 could go towards paying down the mortgage. That way, when you retire, you won’t have to pay that big bill. My concern is that you’ll struggle with those payments once your current level of income isn’t coming in.”
Try to come to an agreement. Practice patience and kindness.

Additional Tips for Addressing the Problem

Every family is different. Therefore, addressing problems with financially irresponsible parents will look different in each family. Your culture, your family dynamics, and your styles of communication will all come into play. Therefore, here are some additional things to consider when dealing with financially irresponsible parents.

One or more of the siblings (the parents’ children) might be the best one(s) to have this conversation. Can you work together?
It might be better to approach one parent or the other first in some families.
It’s important to be sensitive to the many relationship dynamics at play. If your parents are separated, divorced or remarried, more people are in the picture. If your parents’ parents are still alive, they may be involved financially. If you have siblings and step and half and adoptive siblings, there’s more at play. Try to get a sense of the big picture of family finances.
Some people prefer information over advice. Consider sending your parents articles and books about finances instead of discussing the issue directly.
Speak with professionals about your legal and financial options. For example, if you want to help your parents financially but don’t want to hand them cash, how can you set up a bank account that would enable you to do this? Or, if you’re paying for your parents to live with you, can you count them as dependents on your tax returns? Figure out what options you have.

Set Boundaries and Let It Go

Remember: You can only help them if you want to help them and if they want you to help them.

Do all that you can to deal with your financially irresponsible parents. Work with them. Express your love and concern. Figure out if there are tangible ways that you can help improve their financial situation. But, also, know when to step aside.

Your parents are adults. They are allowed to make their own choices. (Of course, if competence, age-related memory decline, etc. are at play then that’s a different – and much more complicated – story. Seek help from professionals working in that area of law and finance to proceed.)

At some point, you have to set your own boundaries. For example, you might determine that you’re not going to help your parents pay their bills. It’s too frustrating that they waste their money and then can’t cover the rent at the end of the month. While you don’t want them to be out on the street, at some point that might have to be your boundary. You can lovingly set boundaries. Again, therapy can assist with this.

And then, you have to find a way to make peace with the situation. It does no good to have anxiety over things which you can’t control. While you can keep trying to chip away at the problem, you also need to find ways to refocus on your own life. Practice self-care. Improve your own relationships and finances. It is never easy dealing with financially irresponsible parents. Nevertheless, they don’t have to interfere with your health, happiness, or money.

And one more thing, if you have children of your own, make sure to break the cycle. Have conversations with them early and often about finances. Open the doors of communication about money.

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Ten Ways We Psychologically Hurt Our Relationship With Money

May 3, 2012 By Guest Writer 2 Comments

By Dr. Charles Richards

Why is it that just when everything seems to be going well financially and you feel like you’re getting ahead, something seems to crop up that alters your plans? In my practice as a psychotherapist, I’ve seen this pattern play out in clients and others many times. If this has become a pattern for you, you may be unknowingly engaging in behaviors that are hurting your relationship with money. To uncover how you can stop sabotaging yourself financially, let’s look at ten common ways people psychologically undermine their relationship with money and what to do about them.

Tying Your Self-Esteem to the Amount of Money You Have

This is one of the most common ways that people hurt their psychological relationship with money. Many people believe that if they could somehow acquire more wealth — for example, get a raise or afford a bigger house — they’d finally feel good about themselves. I’ve seen this struggle in some of my clients, including affluent ones. Yet with each new purchase or rise in worldly esteem, their inner sense of worth, or lack of it, stays the same. Although it may seem paradoxical, believing that your value as a person is tied to your bank account can hold you back from achieving prosperity. While money helps many things, it has little long-term effect on one’s self-worth, and a sturdy sense of self-esteem is a cornerstone of what I consider a healthy psychology of wealth. Fortunately, the steps required to strengthen your financial health are the same ones that will increase your self-esteem — i.e., accomplishing even small tasks that are difficult, creative, or nurturing.

Allowing Yourself to Become Unconscious of How Much You’re Spending

Letting yourself lose sight of what you are spending may be the single most damaging thing you can do to your relationship with money. It’s also one of the easiest behaviors to slip into. Retailers and advertisers are experts at pushing our psychological “buy now” buttons. They use psychological tricks to lull us into spending more than we intended. This separates you not only from your money, but from a sense of mastery over your own resources and financial goals. Here’s a simple but powerful psychological trick you can use as a consumer: raise your awareness by writing things down. Write down your financial goals for the next year, quarter, week, and 24 hours. Then keep a journal of how much you are spending each day for a week or two. Do your spending habits match your goals?

Borrowing Money in Ways That Discourage Awareness of How Much Debt You’ve Accumulated

How many times a day do you pull out your credit card to make a purchase without even thinking about it? And when the bill comes, do you always remember what you bought? Credit cards are convenient, but they can make it easy to pile up debt. This is not only because you can use a credit card to borrow money instantaneously, but you can also make minimum payments almost indefinitely.

If you feel anxious and out of control of your money when you see your credit card bill, something is amiss. The anxiety itself can set up a self-defeating, up-and-down cycle of borrowing and spending (a.k.a., “retail therapy”) that only puts you deeper into debt, while making you feel more out of control and anxious. For daily purchases, it’s better to use debit cards or cash. This makes you more conscious of what you’re spending, since you can only buy what you can pay for. Credit is a powerful and positive tool when used well. To borrow without anxiety, seek out credit options that require you to deliberate about what you’re borrowing and buying, and that have disciplined repayment plans.

Negative Thinking Exacerbated by Expectations of the Worst

“I sure would like a better-paying job. But so many people are looking for jobs now. The competition is way too tough, and I’m no good at interviewing. There’s no way someone would want to hire me.” Sound familiar? If you really pay attention, you might be shocked at how many negative thoughts you have in a day. This negative inner chatter can undermine your self-confidence and cause you to miss financial opportunities that are right under your nose. When you find yourself thinking a negative thought, replace it with a positive one.

Reluctance to Give to Others

If you’re feeling financially pinched, generosity to others may feel like a low priority. You may hesitate to engage in even small acts of generosity because you’re afraid you won’t have enough for yourself. Yet this feeling, however factually based it may seem, can be a self-fulfilling prophecy and constricts your own monetary flow. Money can be regarded as a form of energy — energy that flows through our society, economy, and individual lives. A thriving psychology of wealth requires trusting that, no matter what happens, you will have enough. As a form of energy, money is never truly lost. To get the financial flow going in your own life, try being generous with others — with your time and attention, if your bank account is currently in a “modest” phase. Doing so can renew your energy, inspiration, and motivation to move forward.

Allowing Yourself to be Discouraged by the News Media

Have you noticed how much of the commentary and entertainment in the media these days is extreme? We have extreme sports, extreme politics, extreme makeovers, etc. If it isn’t mind-blowing, it isn’t newsworthy. And the good news doesn’t get much attention. Much of this “news” reinforces the idea that the economy has gone to the dogs and, with it, opportunities to create abundance in our personal lives. If you find yourself obsessively tuning into the bad news and fretting about it, take a break and read a book or watch a movie with an uplifting story or empowering financial message. Doing so can be a remarkably effective way to change your attitude about what’s possible.

Expecting Money to Buy Happiness

Perhaps you’ve heard it before: Money can’t buy happiness! As common sensical as this is, it can be easy to believe otherwise, especially if you’ve been struggling financially. Believing that money has special powers for generating happiness can cause you to postpone discovering and pursuing what will really manifest your vision of a fulfilling life. Thoughts like, “Everything would be OK if I were just rich,” or “I can’t start my dream business (or travel, or exercise properly…) until I have much more money” are self-defeating and usually simply untrue. While being financially comfortable certainly beats being broke, as Szifra Birke (who is both a wealth counselor and psychologist) wisely states, “Money tends not to solve personal problems; money solves money problems.” Put your attention and energy into what you can do, rather than what you can’t.

Hanging Out with Pessimists

Recent studies show that the people in our social networks have an outsized influence on our outlook, health, and even on our weight. Family, friends, and associates who gripe about their finances and fret about their prospects can negatively affect our own attitudes about money. Fear and pessimism can be contagious — but so can hope and enthusiasm. Cultivate relationships with people — co-workers, mentors, friends, and family members — who speak positively about money and are generally optimistic. The positive attitude that rubs off will help you see financial opportunities where you might have missed them before and give you more energy to pursue those opportunities.

Denial

While it’s beneficial to dodge the Debbie Downers in your world, putting your head in the sand and avoiding a realistic assessment of your finances can be downright dangerous. Interestingly, this kind of avoidance often produces more anxiety about money than knowing exactly what’s in those unopened bank and credit card statements. Anxiety isn’t a healthy state from which to make financial decisions. Facing your fear will most likely alleviate it. If you need support, ask a friend or family member to help you bite the bullet and take a clear-eyed look at your balance sheet. Armed with a realistic picture of your finances, you can start to make an action plan for either repairing or building on an already healthy state of financial well-being. Take small steps if you need to.

Fear of Taking Risks

Common sense says that saving and setting aside money for emergencies is prudent. The sense of security that savings can bring is worth its weight in gold. But fear and avoidance of all financial risk — including investments and even some debt — can severely limit your ability to move forward in life. The responsible use of credit — and the trust in yourself that it requires — is essential to the commerce of life, and investing in yourself is necessary for growth. This can mean anything from taking out an affordable installment loan to buy a more reliable car, to taking classes that will enhance your appeal to employers, to stretching a bit to purchase a classy suit for job interviews. You are always a worthy investment.

Charles Richards, Ph.D., is the author of the New York Times bestselling book, The Psychology of Wealth: Understand Your Relationship with Money and Achieve Prosperity, and a licensed psychotherapist in private practice in San Diego, California. You can learn more at PsychologyofWealth.org

When the Poverty Mindset Threatens Family and Fun

February 2, 2009 By Jennifer Derrick 16 Comments

Here’s a case study to think about: A member of my family has large retirement funds and savings accounts, a good income, no mortgage, and no other debt. She does not buy the top of the line in anything and is as frugal as they come. She buys very little that isn’t necessary and gets the best deals on the things she needs. She doesn’t even own a credit card because she’s afraid of them. To top it off, her house sits on a large piece of land that she could, should things go south for her, quickly sell for millions of dollars. (The property contains valuable oil and gas deposits that various agencies and companies have been trying to get their hands on for years.)

Just by reading the above you would, rightly, assume that this person has it made as far as finances go. She is comfortable and well off, and will be able to take care of herself for years to come. So what’s wrong with this picture and why am I telling you this story? Despite all of her success, she considers herself poor. This person is convinced that she does not have enough money to live on. She lives in constant fear that she will soon be broke, that she won’t have enough to live on, and that every penny she spends is leading her closer to her doom. (I don’t know whether there is a true psychological disorder here or if it’s just a mindset or a way of being she could change if she wanted to so I try not to judge, but I tell you this story to illustrate the point that sometimes frugality can go awry and make life miserable instead of happy.)

As a result of this poverty mindset, she is very difficult to be around. So difficult is she at times that other family members have begun to ostracize her. She constantly complains about how little money she has and balks at anything that requires an outlay of cash. If any family gathering centers around spending, such as dinner out, a family reunion, funeral, or wedding that must be traveled to, a group vacation, or a party where all the family members contribute to the cost or purchase a gift, the complaints get louder. She makes no secret of the fact that she doesn’t want to spend, yet she still wants to be an active participant. As a result, someone usually covers her share just to get her to shut up. She insists that all events take place in her town so that she doesn’t have to pay. When things don’t go her way and the event is scheduled somewhere else, she reluctantly attends but criticizes everything at the destination and complains about how much everything costs, sometimes loudly enough for servers and other staff to hear. It’s embarrassing.

Now, I certainly understand not wanting to spend frivolously or too often. If this were a situation where the parties were lavish or every weekend, I could understand her upset. However, our family rarely does things together so any time to get together is special. We’re all so scattered that any sort of gathering involves some level of spending, be it for travel or food or to chip in for a 50th anniversary party. But when we do get together, the events are usually low key buffets or small, garden type weddings. Nothing extravagant or costly and we try to be fair and schedule things in various and neutral locations so the same person isn’t always traveling the furthest distance.

In my view, with a group like this, you can either cheerfully join in and spend what you need to (applying bargain hunting tactics wherever possible to reduce the cost) in order to participate, or you can simply say, “Count me out this time. I can’t afford it.” Whining about how little money you have until others give up and pay for you is not cool. Neither is expecting and insisting that all reunions and parties occur in your town so that you don’t have to spend money to attend. It is especially uncool when the person making these demands has the money to comfortably participate.

The problem here is that while this relative is saving money, she is making herself and the rest of the family miserable. It has gotten to the point where some relatives are simply refusing to invite this person to any gathering, or to even mention to her that something is planned. I’m all for frugality and saving money, but not when the cost is your friends and family. There comes a time when frugality can cross over into obsession. When you are comfortable financially yet continue to act as though poverty looms, you cheat yourself out of fun and valuable experiences and you distance yourself from others. If your frugality is making people avoid you and hide things from you, it’s time to rethink your priorities.

There is a balance that must be struck between being frugal and fiscally responsible and not cutting yourself off from family and experience in the name of saving money, particularly if you are well off financially and the demands on your finances are reasonable. Even if you don’t like to spend, there are times when you need to simply suck it up and spend in the name of being a good family member. No, you may not particularly thrill to the idea of shelling out for plane tickets to Aunt Emma’s funeral in Minnesota, but you go because it’s the right thing to do. And you do it without complaining to anyone about it. You go because this is your family and you want to be there for and with them. When a fun reunion is scheduled and you want to go, you get the best price you can and you go, without complaint. If you constantly complain about the costs and embarrass others, you can be sure that no one will invite you next time and you will miss out on valuable family time.

Of course, if you hate your family, then this can be a valuable strategy for getting out of things. But for most of us, that isn’t the case. If you’re very frugal, put your poverty mindset aside for a little while, relax and have fun. You’ll be a joy to be around and your family and friends will appreciate the time you spend with them, rather than dreading your appearance at the next gathering.