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Teaching Financial Responsibility to a Senior Citizen

Posted by graywings (My Page) on
Wed, Apr 30, 08 at 19:07

I'm new to this forum, and, frankly, only glanced at the titles of the current three pages of posts, so if this is a typically-asked subject, just let me know. I am partly venting and partly requesting assistance and advice.

My husband's 81 year old mother is in debt up to her ears, and on Friday we are going to her house to sort out her finances. We don't know the specifics, but it appears that she has run up a bunch of credit card debt. It has come to a head because she wrecked her car in an accident, had to borrow money from my husband to pay the ticket, and now is without transportation.

My first question is: can someone point me to a spreadsheet that would help us help her walk through her finances to see where she stands? I understand the process generally - I think. We need to see what her income is from Social Security and her pension, and then figure out her debt and her weekly, monthly, quarterly, and yearly expenses. But, rather than my trying to re-invent the wheel, is there a spreadsheet that we could use as a tickler system? She has always been secretive about her finances, so we have no idea what we are going to find.

Now the vent. I'm trying to make myself understand that an 81 year old woman, living alone, lonely, and unable/unwilling to make the slightest change in her life has a different set of priorities than I do. She spent six months thinking she was going to die before last Christmas based on a dream she had. Yet she is healthy, active, alert, and would be working if she could find someone to hire her, although she is hard of hearing and won't even consider a hearing aid (money and vanity). Her mother lived until her late 80's, so we see her living well into her 90's.

The idea of penny pincing (in the areas a normal person might consider) is completely foreign to her - no generic drugs, won't give up the weekly trips to the expensive hairdresser 30 miles away on the other side of the city, or feeding the squirrels and birds, driving her letters to the post office rather than leaving them in the mailbox, to name just a few. She drives over 30,000 miles a year. And then there is the compulsive shopping and hoarding. (Please don't waste your time trying to justify or minimize any of these expenditures because I would wear out my fingers cataloging other excesses; this is just to give you a flavor of the problem. And what she doesn't spend money on, such as medications for herself or upkeep of her home, is equally frustrating. Today my husband spent 1.5 hours at the DMV with her waiting to get a copy of the title to her car because she couldn't find it in the house through the clutter.

My plan for Friday is only to gather information. But any words of wisdom for how to help someone in a situation like this would be most welcome. A psychiatrist has advised us that we pretty much need to let her hit rock bottom, and that bailing her out is not the way to go.

We went through this same thing with her five years ago, and my husband arranged a home equity loan for her (her house, not ours). Apparently the fear after that event wore off.


Follow-Up Postings:

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RE: Teaching Financial Responsibility to a Senior Citizen

I hate to say this, but while she may appear 'alert' to you, and even able to respond intelligently about money and/or anything else, you need to get her to a doctor. At her age, it's very likely she has a very early version of dementia, making her no longer completely responsible for her actions (or consequences). The story about the dream, the out of control credit, and having crashed her car are all classic signs of trouble - even in a young person! For her own sake if nothing else, get medical attention now and stop worrying about money for the moment.


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RE: Teaching Financial Responsibility to a Senior Citizen

I agree with lucy. Sadly, you are not going to teach her financial responsibility at her age. Heck, I can't even get my 80-yr old MIL to understand the difference between a credit card and a debit card, LOL! More importantly, you need to get your DH power of attorney. She does not sound capable of making responsible decisions, but legally she still has the ability to do just that.

If she will not voluntarily give him POA, then yes, you will probably have to let her hit bottom, then go to court with an attorney to get such power.


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RE: Teaching Financial Responsibility to a Senior Citizen

I agree, you and your husband are not going to "teach" her much. The only thing I would suggest is to do everything to protect yourself and her. She probably will not do/understand the spread sheet--I don't even do that. Since she is DH's mom, he needs to sit down and be firm with her. Go thru everything, get legal advice regarding bank accounts, medical stuff, driving etc. Take all the credit cards away, except one or two and make sure they have low limits. Sounds like she does not need to drive much. Be firm, remember us older people get younger as we get older. what is she buying by credit cards? Is she giving stuff away? Talk to her Dr. But unless she ok's you to help her, if she has a stroke etc. you can do nothing. My kids are authorized to talk to the medical people, can contact Soc. Sec. and other insurance plans and if it becomes necessary, I will put them on my bank accounts so bills get paid etc.
Just make sure people are not stealing from her, etc.
Good luck.
PS. I went thru with this with my mom. I took the check book etc away, my Dad was blind and my brother an alcoholic and she was giving him money, until I stepped in and I took control. At least she had money in later years.


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RE: Teaching Financial Responsibility to a Senior Citizen

Im afraid that the first order of priority may be to take away your MILs drivers license and car. If the state is on the ball they may require that she get a medical assessment before she is allowed to drive again.

If your MIL is unable to function in her home without her own transportation that maybe is an opportunity to get her to move to an assisted living situation. I would suggest that it is easier for her to adapt the sooner she moves rather than later. You may have to be the dragon in this matter; it can be very difficult for somebody to put restrictions on his own mother.

As somebody who has had a bit of experience with elderly relatives your story has alarm bells all over it. Hopefully your MIL wont forget her English and lapse into Dutch like my 94-year-old mother.
Good luck you may need it.
Ian


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RE: Teaching Financial Responsibility to a Senior Citizen

Google financial worksheets for sites with printable pages. The womens-finance entry looks like it has what you could use.

Seems there might be a little more at work here than an elderly woman set in her ways and racking up debt. A little dementia setting in; the hoarding is symptomatic of that psychosis.

I, too, agree that you and your husband will have to gear up more for a caretaker role than a teaching one. Many older folks who still have perfect command of their wits have some pretty odd ideas about finances and you can't change them. But it's good that you're at least making the attempt to get a handle on her income vs spending and debt. And if there's any way she could see the benefits of conferring her financial Power of Attorney to you or your husband, that would be a giant leap forward. With that power, all sorts of avenues of inquiry open up to you. And that way if she does start to really fail and forget, at least you can wrtite checks on her account to keep the heat and lights on.

See if you can get ahold of the client copy of her 2007 tax returns; she should have one in her files (assuming important papers are saved somewhere) if she uses an accountant or any of the tax preparation services. That'll be a comprehensive listing of income, bank accounts, assets that pay interest or dividends, etc.

Just make sure you don't put yourself in the position of being responsible for any of her debt, paying her bills out of your pocket, or bailing her out. Having creditors view you as the responsible party is not a trap you want to get into.

None of this is easy, but having a clearer financial picture will give you some idea of what has to be done. I'd reserve dealing with any medical issues until they reach a critical mass. That's hard, but sometimes it's a crisis event that tells you what has to be done. But a routine check up is always a good idea - UTI's and assorted other infections can really knock oldsters for a loop and are easily treated with a course of antibiotics. But having someone declared incompetent is not a road I'd want to travel unless my back was against a wall.

I've had some experience having the financial POA for several elderly (well into their 90's) relatives. Fortunately, the powers were granted willingly because I was trustworthy and because they were too tired and disinterested to do it for themselves any longer.


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RE: Teaching Financial Responsibility to a Senior Citizen

Thanks for all the responses. The womans finance link was helpful. And getting the 2007 tax return is excellent advice.

I am resigned to the fact that there is little we can force her to do. At the moment, she is mentally and physically sound. She has a clean bill of health from her doctor, and she recently had her driver's license renewed for five years. The only entity that could impede her now is the car insurance company, but except for this accident, she has a clean record (her sister was driving the car in the accident 5 years ago).

With the ready availability of credit these days, there is little to stop this train from wrecking.


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RE: Teaching Financial Responsibility to a Senior Citizen

"With the ready availability of credit these days, there is little to stop this train from wrecking."

Can you get her to request a freeze from the credit bureaus? That will stop the solicitations....


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RE: Teaching Financial Responsibility to a Senior Citizen

You can also put her phone on a "do not call list", same for address, I think.
Don't tell her, just do it.


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RE: Teaching Financial Responsibility to a Senior Citizen

If she is willing and able to start developing better financial habits, a program like Quicken has built-in modules to assist visualization of cash-flow status.
You might also contact your/her bank or AARP to see if they have any ideas on how to help her from getting in deep trouble.


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RE: Teaching Financial Responsibility to a Senior Citizen

Is there a Senior Center nearby? They may have some ideas on how to handle this.

Aren't there organizations that help anyone of any age get out of debt?

I'm thinking your MIL might accept this better from another person -- a 'professional' if you will, or a fellow Senior.


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RE: Teaching Financial Responsibility to a Senior Citizen

If mom-in-law has an accountant, let him know what's going on and he might participate in the solution.

MIght your husband take over bill paying? That way, you guys can keep a month to month eye on things.


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RE: Teaching Financial Responsibility to a Senior Citizen

It's a very sad situation...one similar to a friend of mine, just 78 years old. She worked and was broke and paying late her whole life. Things finally came to a head, and she is now in an little apartment in assisted living. She has everything she needs and has adjusted well, IMHO.

At different times in the last year of being in her home, she had her long distance turned off (non payment), the gas and electric company about shut her off, her mail order prescriptions were not ordered in a timely fashion, and the worst thing was ordering a BOSE sound system which a non family member stole from her...as it was 'stored under her bed, waiting for me to come and hook it up. She at times did not even remember ordering, though she had sent several (late) payments. Additionally, she wrote me 2 checks (for mowing or things I picked up for her) and both of them were on accounts that had been closed....but that is another story.

She clearly could no longer handle her business. A responsible son stepped in, took over her 'business' and is still trying to catch up 2-3 years of her having not filed her income taxes. It is sad...just so sad when one cannot function correctly...yet she was alert and knowledgeable about so many other things...namely gardening and things she always enjoyed.

I think she is early stage Alz. Her dad had it and she has talked and been concerned about it for years.

Sue


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RE: Teaching Financial Responsibility to a Senior Citizen

We had "the talk" with her yesterday and went over her finances. Over $20K on a Visa card, and $4K on a Walmart credit card of some kind with a 23% interest rate - a card she denied having any charges on until we called and got the balance. She was contrite and made amorphous promises to change.

We will probably try for another home equity loan to bring down the interest rate, which, combined with her previous one, will tie up about half her $2K monthly income. It is enough to live on modestly, but all of this offers no solution to the underlying problem of loneliness and lack of purpose in her life that drove her to spend. With the information gathered yesterday, we can monitor her spending, and she seems willing to go to a cash system.

Sadly, she would absolutely thrive in a good retirement home, but steadfastly refuses to even step foot in one for a look - and now can't afford it.

I just wanted to let you all know how this came out and to thank you for your responses.


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RE: Teaching Financial Responsibility to a Senior Citizen

Is there any way you can work with a credit counselor on her behalf? Rather than wiping out her debt and allowing her to run it right back up again? Without going through the previous messages, I can't remember if you said you were canceling all her cards and freezing her credit reports.

How about classes in adult education or senior centers? Meeting people might give her that "lift" she needs, maybe. Out here there's a lot of classes offered, although one needs to be driven to reach them.

You've taken on a heavy responsibility and I hope all goes better for you in the future. Good luck!


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RE: Teaching Financial Responsibility to a Senior Citizen

You may not want to do the home equity loan to pay off the credit cards, because that's trading unsecured credit card debt for debt that's secured by the house, which I think increases the odds of losing the house. I know the interest rate would probably be lower with the home equity loan, but if she's just going to run up more credit card debt on top of it (and given past behavior, it's likely), then the house will be more at risk than if it was all unsecured credit card debt. I'm not an expert, but I think this is something you'll want to consider carefully.

You may also want to look into negotiating directly with Visa & Walmart to reduce the amount owed, or at least reduce any penalties that are piling on. Credit card companies want to get paid, but they do know that getting paid something is better than a default and getting paid nothing, so you may have some room there.


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RE: Teaching Financial Responsibility to a Senior Citizen

We will probably try for another home equity loan to bring down the interest rate, which, combined with her previous one, will tie up about half her $2K monthly income

As you point out, the underlying cause has not been resolved. So, she'd be risking her home. Although it would bring the interest rate down, in her case, I think it's a bad idea. At her age, her spending patterns are very unlikely to change. She'd probably run up her credit accounts again and then be even heavier in debt and could lose her home.

I'd try negotiating a lower rate, ask her if she's willing to cut up the cards and stop using them and work out a budget. From your first post, this is probably an alien concept to her.

It's a very tough situation. Good luck!


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RE: Teaching Financial Responsibility to a Senior Citizen

can you help her find something compulsive to substitute for the credit-card spending?

Get her hooked on garage sales, where she buys stuff for 50? Still hoarding, etc., but less damaging to her finances.

Or, find her some sort of charity that she could help with daily--picking up litter on a walking trail, or something. That would make her feel needed, and give her something to do that's not in a store.

Would be best, I suppose, if it were around other people; so maybe the walking trail isn't great, and volunteering at the library or something would be better.


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RE: Teaching Financial Responsibility to a Senior Citizen

If she still has equity in her home, she might be eligible for a Reverse Mortgage. That could pay off the existing Home Equity and credit cards if there is enough equity there. It would allow her to retain her monthly income and restructure her debt. And yes, the initial costs can be high, but it is another solution that's out there.

And no, the bank would not "own" her home any more than the bank you currently have your mortgage with owns your home. Common Reverse Mortgage myth ...


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RE: Teaching Financial Responsibility to a Senior Citizen

We really don't want her in a reverse mortgage. Since she won't take calcium or any of the prescribed treatments for osteoporosis, it is just a matter of time until she suffers a hip fracture and won't be able to live in the house.

Get her hooked on garage sales, where she buys stuff for 50? Still hoarding, etc., but less damaging to her finances.

Garage sales, Goodwill, Big Lots, The Dollar Store - the house is full of stuff from these places. The new addition to the spending regime has been treating her leech of a sister for lunch, paying for cremation of the leech's dog, paying the leech's Wal-Mart bills, etc.


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RE: Teaching Financial Responsibility to a Senior Citizen

I still say that whatever transpires about the money, she needs to see a doctor. If she can't fend off her sister along with the other problems she's been having, she really needs to be assessed by a professional, probably a neurologist or at least a geriatric specialist (they know which questions to ask and how to do it).


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RE: Teaching Financial Responsibility to a Senior Citizen

She goes to one of the best physicians in the city, and she says that he says she is mentally sound. I think she is mentally sound, she is just making bad decisions based on her fear of change and her loneliness.

I tried to get her to go to the senior center - a no-go. I suggested volunteering at a local animal shelter, but she says she pities the animals too much to be around them and then leave them at the end of the day.


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RE: Teaching Financial Responsibility to a Senior Citizen

graywings,
Actually, it seems to me that you've already done as much as you may be able to. People have the right to make poor choices. But it can be agonizing for the family to watch.


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RE: Teaching Financial Responsibility to a Senior Citizen

The only other thing that I'd suggest is that your husband take over her bill paying, and then giver her an allowance. Not a fun situation to be in.


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RE: Teaching Financial Responsibility to a Senior Citizen

....take over her bill paying, and then giver her an allowance.

Not knowing whether or not a financial Power of Attorney has been conferred, I'd be hesitant to recommend taking the responsibility of discharging another's debt. What would that mean? Paying out of your own pocket? Sign her checks for her? You can't legally sign another's checks without the granted power to do so.

Perhaps the least intrusive and easiest thing would be to have her son's name added to her checking account. Even though my brother had my Mother's financial POA and took charge of asset management, etc., I had the responsibility of keeping up with the everyday things. I simply had my name added to her checking account when she was beginning the slide into Alzheimer's and getting farther and farther removed from taking care of her affairs. I seem to recall it was nothing more than a quick visit to the bank, signing a paper providing my SS#, etc. and ordering a new set of checks.

I also understand what it is to try and engage a senior in other activities - sometimes it's just not in the cards. Either they're not joiners by nature or as they age there's a certain fear in trying new things that are a little outside of their comfort zone. My Mother gave up playing golf with the local ladies league at age 85 and we never could come up with something/anything even remotely close to replacing the enjoyment she got from that.

From what the OP has written, it does seem her MIL is just aging and that bad habits are becomming magnified; she doesn't quite recognize her spending habits as unusual or that she's being taken advantage of by her sister. It might not be any one of the dementias one could put their finger on right now. It could be in the future.


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RE: Teaching Financial Responsibility to a Senior Citizen

I'd suggest is that your husband take over her bill paying, and then giver her an allowance

The husband can't do that without a PofA or the MIL's consent. If she'll agree to add his name to her checking account as duluth suggested, that may be a means of at least making sure her bills get paid.


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RE: Teaching Financial Responsibility to a Senior Citizen

What I meant and what I didn't say clearly was that her son could actually write out the checks for bills but not sign them. Then sit down with mom and have her sign the checks once a month. And with what's left, figure out a cash allowance that she has for spending. That way she retains a feeling of some control over her money and she sees where it is going. If she doesn't hold the checkbook in her possession, then the day to day temptation to spend could be removed.

I know about POAs as my sisters and I had one for our mom during the lasat 15 years of her life.


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RE: Teaching Financial Responsibility to a Senior Citizen

It has come to a head because she wrecked her car in an accident, had to borrow money from my husband to pay the ticket, and now is without transportation.

I'm guessing it is really high time that someone talk to her and attempt to get financial POA. She already cannot pay what needs to be paid and is relying on her son, at least this one time. It is only a matter of time b4 she will have to rely on someone for life's necessities of shelter, utilities, food, meds, clothing, taxes, and insurance, just to name some of the most important ones. How long will it be before her electric or water is turned off due to non payment, or having to 'borrow' from family members?

She is clearly in over her head now, if she is doing this badly managing things now and needing assistance.

Credit cards, and her credit will need to be frozen or she will continue using them.

Again...I wish you luck in handling the situation. I know it will be hard for all of you.

Sue


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RE: Teaching Financial Responsibility to a Senior Citizen

"...she says her doctor says..." I know about privacy of medical records, but it wouldn't hurt were your DH to call her MD for a little chat about what's happening. The doctor may be relieved; at least he can put your DH's contact information on his patient records records. It's OK for your family to contact him; not always OK for him to initiate contact.


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RE: Teaching Financial Responsibility to a Senior Citizen

Is she willing to even admit that she has a problem? If so, would she agree to closing her credit card accounts and placing a freeze on the credit reporting agencies?

That would pretty much force her onto a cash basis - but she'd have to agree. If she doesn't think she has a problem, then it seems that you have done all you could.


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RE: Teaching Financial Responsibility to a Senior Citizen

absolutely don't let her home be used to pay off unsecured debt (and don't YOU pay it).

Credit-card debt can't be collected once she dies. A HELOC can.


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RE: Teaching Financial Responsibility to a Senior Citizen

Actually, under HIPAA laws the doctor would be justified in not speaking to any member of the family without a signed Durable Healthcare Power of Attorney on record. They've been known to do it, I think mostly out of habit; but believe me, legally they're on thin ice. I've had a couple of personal experiences, as have several friends, when the nurses or doctors clamped down and refused to give any info unless they had written or verbal consent on the spot. HIPAA is a prime example of a badly written law with the best of intentions.


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RE: Teaching Financial Responsibility to a Senior Citizen

It does strike me as kind of pointless!


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RE: Teaching Financial Responsibility to a Senior Citizen

graywings, it sounds like you've done everything you can.

It might be time for you to step back from the situation. You can't make her do anything, and you'll drive yourself nuts trying. Worse possible scenario: your relationship with your husband could be negatively affected if you push too hard and MIL (or the Leech) gets angry.

You might just have to let her wreck her own train. All you can do is try to avoid getting hit by flying debris.


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