Hi.
Some background: I'm 24 and in grad school with a student loan. My brothers are both 21 and graduated debt free. My dad is 65 and retired. My mom is 58 and is still working. I've scaled everything to the USD (I'm not from the US) for generality.
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Where do I even start? My father has a degree in engineering but started his own small business which was not highly successful. At his peak, he made about 50k a year. His business failed about 8 years ago and he was never able to recover from that. My mom has held a job for the last 30 years or so and she makes about 80k a year from just her job. Four years ago, her father passes away leaving her some inheritance and a monthly income of about 5k. So for the last 4 years or so she has been making 92k. And for scale, imagine out living expenses to be the same as in Phoenix, Arizona.
Yet somehow, we are struggling to make ends meet. My mom has zero savings and TONS of debt. I don't understand how she has not been able to save any money over all these years. 92k a year plus whatever income my dad's business made seems more than enough to make sure we don't go into debt.
The situation right now is:
1. Student Loans: For my undergrad (even though I got a substantial scholarship), my parents insisted they take out a loan to pay off the remaining amount which could have been paid out of pocket. They wanted to improve their credit standing. That did not happen. They stopped making payments three years ago and now that loan has gathered so much interest that the monthly payments are around 1.5k.
2. Car payments: My parents are also behind on their car payments. This would be around $500 a month and the total amount due is around 5k. (I don't even know how....)
3. Unnecessary expensive and luxurious family vacations every year: When I was younger, we were actually able to afford these but around 2011 my mom first mentioned the financial situation and still continued to plan and take these vacations up until last year. There is no reasoning with her and since my dad isn't bringing in money anymore it's more like "it's my money and do what I want" situation. She will not listen to any reason from any of us. This costs about $10k for 5 people. Earlier this year, a large amount of tax was due on her inheritance which had to be paid out of pocket. Despite this, she planned a vacation even though none of us agreed to it and booked everything. When the time came to pay the tax there was not enough money.
4. Buying everything on special financing: All of our purchases are through special financing - like TVs, washing machine, phones and anything else possible. I understand wanting to spread out the payments but when the time comes to pay the monthly amount due, the money is used to pay for either my brothers' tuition or towards the vacation. These payments pile up and these add to her debt even more.
So after all this, my mother recently wanted to buy a new car even though she claimed she has no money to make the 5k due on the old car. She still wants to go on a second vacation this year and plan another expensive vacation for next year. All while complaining that there is not enough money to pay off a student loan she insisted I take for my undergrad/buy things like clothes and other necessities/having zero savings.
If this keeps up, we will soon be bankrupt since she only has two years of work left and my dad is not working. She is also pushing my brothers to go to school to get another degree which will be more debt. The dire financial situation was kept from my brothers and I until the beginning of this year. I do not live at home but my brothers still do. My parents do not have a mortgage payment.
I know that she is probably in need of mental health assistance but what can I do now to take some control of this financial situation? This will not end well unless I take some action now. I still have a year or so of grad school left and I will likely have to look for a job after I graduate instead of getting my PhD as I had initially planned.
Edit: A lot of the commenters are saying that my parents' debt is not mine. I agree with that. But, I am culturally and also morally obligated to support them when they are not able to. Not just me but my siblings as well. So when the time comes the three of us will have to deal with their debt.
Submitted December 21, 2018 at 11:10AM by AccidentalFireAlarm http://bit.ly/2EEC3uf
