As I mentioned in the previous post, Scott comes from a completely different money background. The difference has caused us a lot of fights but, after a lot of discussions and tears, we are finally at that point where we are communicating clearly and seeing eye to eye. Here is his story.
Scott had a normal childhood in an affluent suburb. His dad had his own company while his mom worked for their family owned company part-time, even after the kids were grown. Both kids were able to participate in extracurricular activities and never remember going to bed hungry. Scott remembers his dad trying to talk to him about money a few years back but Scott didn't want to talk about it.
Sounds like a normal childhood, right? Except, we recently learned, this was all a facade.
In reality, the childhood seemed normal because they were keeping up with the Jones. Living in an affluent neighborhood meant that they saw their neighbors upgrade their cars every few years. His mom is an awful cook, so the family went out to eat regularly. When the family came across a lot of cash, they went on expensive vacations, rather than saving it for rainy day. When the business wasn't doing so well, they refinanced their homes. When they decided to retire, they custom built a home on a property they already owned, during the peak of real estate. By the time they decided to retire, they had absolutely no retirement savings and had a mortgage and a line of credit. The only stream of income they had were some commissions from his business and social security. Even then, they used social security to pay for Scott's younger brother's tuition.
Monkey see, monkey do. Scott was not much different than his parents. He had some low paying jobs in his early twenties and used credit cards to pay his rent and food. But he loves cars and he kept on purchasing new cars every 2 years or so and modified them, putting thousands in to car parts. He kept on justifying his car habit, telling himself it was okay because he didn't put them on his credit card. This was on top of his student loans. The only smart decision he made was to purchase his condo. Except this was at the height of the real estate bubble.
These credit cards are the consumer loans we are working to pay off today. Luckily he kept on climbing the corporate ladder and now make sufficient money. Together he learned to budget, to think about retirement, and to enjoy a life without car payments.
How are his parents? We did not discover their financial situation until after we were married. One day, we received a call from Scott's dad saying they were about to get their car repossessed. We found out that they were three months behind on their car payment and ended up giving them money to keep the payments current. The parents thanked us and claimed they were on the "up and up", although I couldn't figure out how that could be the case.
And I was right. Next month, Scott's dad asked Scott for money and told Scott not to tell me. Since then, each month they were asking us for money to help with payments. I put my foot down and said no, telling them that unless they get professional help from a CPA or a financial planner (which we offered to pay for) and find out how they can get out of this situation, I said we can't keep on just giving them money. On top of all of this, we found out that the mom was giving Scott's younger brother money to help him keep his bar habits. Since I was so against giving them any more money without a professional plan, Scott gave money to them behind my back, which I eventually found out about and absolutely broke my trust. We were thisclose to getting a divorce. We even pulled our accounts and kept separate accounts for close to a year.
It was hard but things have improved. Jason has stopped helping his parents and now also realize that if they are unwilling to get professional help (and our offer will always stand that we will pay for the sessions), their situation will not change much with us helping them with payments each month. He contributes to 401k and RothIRA, maintains a budget, and is weaning himself off his car habit. We are still working on rebuilding my trust in him, but I am confident we will get their soon.
I am sorry for the tomb but I feel that without knowing our backgrounds, it might be difficult for you to understand why we would make the choices we make.
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