In the past I’ve talked about what wonderfully bad financial role models my parents have been. This is something I’ve tried for years to make peace with. Unfortunately every time I think things have settled down and cant get any worse, they find a new way to surprise me.
For the record, whatever my parents do with their money at this point is not my problem. I’m not in any way financially tied to them. My only concern is that someone will have to take care of one or both of them financially in the coming years. Something I’m not willing to do.
Recently, my parents came to visit. Usually during these visits I can count on my father dropping some pearls of wisdom. The first couple of statements, unfortunately, put me on my guard immediately. It seems my father is very interested in knowing what my salary is. He would say he just wants to brag to his friends, but given their history borrowing from family, I couldn’t bring myself to take the bait.
Next up was their recent home purchase. Despite all my concerns being voiced numerous times, my parents are Boomers to the core and are convinced that owning a home is the simple path to wealth. At 72 and 74 my parents signed a 30 year mortgage using proceeds from the sale of my grandmother’s house as a 20% down payment, and now they’re somehow set for life.
To sum this belief up easily, my father launched into an unprovoked rant about the past in what must have been an attempt to show how much they sacrificed to give us kids the perfect life. It all started with a comment about how I don’t have any credit card debt. This triggered my father to explain how they had to live on credit cards to give us the lives we deserved. Credit cards allowed us to buy all the things I never knew I needed as a kid, to take all the high end trips I never knew I wanted to take, to put down payments on all the new cars every three years…
What does one do when the credit card debt gets to be too much? The rant continued, and eventually ended with a sentence that has been haunting me for two months: “So to give you that life we couldn’t afford any other way, we would put everything on the credit cards and then refinance the house to pay for them with equity. It was the only way.“
I wish I was making this up, or paraphrasing. I wish I could laugh this off thinking that the past is the past and we’re all better off having learned a lesson. I can’t say that though. My father wears this like a badge. He won the game. He successfully pulled this maneuver off three times, except the whole having to declare bankruptcy that third time thing. And now they have a new house.
I was worried that they were putting $60k of their $120k nest egg down on a house. Since the sale of my grandmother’s house, the $120k is the most money they’ve ever had. If one of them dies, and their pension with them, the other only has that cash, social security, and whatever their one pension brings in. Or do they?
I’ve now realized that they do not view that $60k down payment as money that’s gone, or as an investment, or as a start to paying off what will surely be their final mortgage. It’s just a holding place for money to be borrowed with interest in the future should they need the money. And what could they possibly need the money for at their age and this far into their retirement?
On their last day here my mother mentioned they’d booked a bucket list golf trip. Eleven hotels and 23 courses all designed by the same guy in Alabama. It was the only way…
Freed by 50 