My Parents Have NO IDEA

Dear Scott,

All my life I was under the impression my parents were wealthy. My father was a partner in a law firm, and there were always extravagant annual overseas trips, fancy cars, beautiful houses, antique furniture, etc. They are now 70, retired, have no super left, are on the pension, and have $120,000 of debt ($80,000 credit card, $40,000 car loan). They used up almost every last bit of their savings, and all of their super, to buy their current home outright once my dad retired.

Yet they keep spending! They don’t seem to realise the severity of their situation. Mum still goes to the beauty salon to have all sorts of expensive procedures done, they still have two cars (one of them a Lexus SUV) despite only needing one, and now they’re going to get a reverse mortgage to release some equity from their home, just so that they can afford to live! I’m so shocked and frustrated, but I don’t know how to help them, because my dad is too proud to listen to me, and my mum is too embarrassed.

As I said, they’re only 70, and I’m afraid they’re going to end up homeless with nothing but debt that they have no way of paying off. I’m also concerned they will be coming to me for money if they have big medical bills down the track. While I love them and want them to be OK, I would resent throwing money at people who have always lived beyond their means while my husband and I are super-careful with our money. What should I do?

Worried Daughter

Hello Worried Daughter,

What should you do?

I think you should follow my lead: I see people doing stupid things with money all the time … it’s like I have a sixth sense for financial stupidity. Yet I have learned to resist the reflex action of going all Judge Judy on them.

Why?

Because they’re not asking for my advice, and it’s none of my goddamn business.

If people do ask for advice, I mostly tell them how great it feels to be in control, and how surprisingly easy it is to build momentum after you have a few dedicated Date Nights.

Just know this: deep-seated behavioural change is hard, especially since your parents have been doing dumb financial stuff their entire lives. Yet for some reason my approach has worked with hundreds of thousands of people, even people like your parents.

So that’s where I’d start: encourage them to read my book, or listen to it on a long car trip.

Will it work?

I don’t know.

Yet the one thing I know for sure is that finger-waving and shaming won’t work. Don’t let money jeopardise the most important relationships you have.

Scott.