The Color of Money / Home & Consumer

Color of Money: Enabling Financial Irresponsibility

WASHINGTON -- You've probably heard "to whom much is given, much is required." But when is the much you're giving too much?

I received a plea from one single woman who felt guilty because she's decided to cut off her family from her bank account. As a continuing feature in this column, Ill tackle questions specifically about your money and your family. If you have a family financial dilemma and you're not sure what to do, perhaps I can help. Send an email to colorofmoney@washpost.com. In the subject line put "Family Financial Drama."

For now, let's look at the lady with a financially needy family.

The background: The woman has been lending money to her parents and a brother. "These family members haven't lost jobs," she wrote. "In fact, they have been gainfully employed during the whole [economic] meltdown. There has never been a time when they were not employed. How many people can say that?"

She's tried to talk to her family members about getting credit counseling, but they havent been receptive to the advice.

The conflict: The brother and parents spend more than they earn.

"They were so sloppy. They had no clue when I asked them what their total outlays were, where the monthly money was going, or even what their credit card total debt was."

The woman asked her brother and parents to produce a budget she could examine. "With the brother, he did humor me through the exercise of writing out all monthly outlays (not a budget mind you, a snapshot). I gave him pointers of what must go."

One was his gas-guzzling leased car. She suggested the brother purchase a used, fuel-efficient vehicle at the end of the lease. He did buy a smaller car. However, he also bought the gas-guzzler after the lease was up. "The point of the exercise was to dump the leased car and drive the cheap miser for a few years."

Then there are her parents, who by the womans estimate spend 10 percent to 20 percent more than they earn each year. They make up for their shortfall by using credit cards and pulling equity out of their home. "Well, the house equity is tapped out, their credit card balances are high, and now they need money for house repairs," she wrote. "Honestly, I think they are close to insolvent, but my dad refuses to do anything about it."

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Copyright 2012 Washington Post Writers Group



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