Thursday, December 20, 2007

Finances and Family

Just read a very interesting post called My mother-in-law thinks we're cheap! and it hit home for me. My grandma used to guilt my mom into buying her expensive presents that my mom could ill afford. And the worst part of the whole situation was my grandmother was not living a life of poverty in fact she could afford a lot more luxuries than my mom, since grandma had my grandfather's extremely large estate, pension, social security while my mom is a single parent school teacher with two children still at home to raise.

Come to think of it none of my family are good with finances. I know I certainly didn't get my financial beliefs - like no debt - from their example. I do think my fear of debt is motivated by my fear of having the financial life they live.

All of the women in my family are poor money managers, which used to scare the living day lights out of me (and still does at times).

My mom's pretty much been in debt her entire adult life. This year for the first time in 30 years she was breifly in the black and not in the red hole known as credit card dept. This brief reprieve from debt was because my grandmother passed away and my mom received some life insurance benefits. My mom and I talked long and hard about her getting out of debt but after only two months my mom was back in debt (granted not as much, yet). My mom realizes she's got a problem with managing her money and that I'm relatively financially adept so she comes to me frequently for help. Several times over the years I help her establish a budget, help her track her finances, help her develop a get out of debt plan but with in a matter of days she gets frustrated at having to keep up with it the plan of action and quits.

My grandma was similarly heavily in credit card debt, however she never fully admitted a problem.

My granny (my dad's mom) is also in debt, but this only came to light about four months ago when my CPA uncle was helping her to consolidate some retirement saving accounts. The embarrassment of this coming out to the family has motivated my granny to get out of debt. She now lives on a strict budget. So I guess there's hope yet for me that I won't turn out financially like my female relatives.

Seeing my loved ones struggle in debt really does motivate me to continue saving, stick to a budget, and always ask myself before purchasing: a) Does this purchase fit in my budget and do I have the money right now to purchase it? b) Do I really need this thing-a-ma-bob and do I have the room for it? c) Will this purchase bring me satisfaction 2 years from now or would knowing I have money in the bank make me happier? If any of my answers to those three question are "no" then its not meant for me to purchase.

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