To decline to help my sister financially? Long.....

(56 Posts)
Earlybird Sun 25-Nov-12 13:57:58

Youngest sister and her dh have been living beyond their means for years now. They have a very good income (almost £100k between them), but live pay period to pay period.

A few years ago, they were in a real bind that was avoided by using a small inheritance to bail themselves out. Another time, they were in crisis mode with credit card debt (think around £30k), but used money from sale of Mum's house (after her death) to stay afloat.

Rather than learn a lesson from those financial crisis, they still seem unable to deny themselves anything. They've bought expensive German cars, art, jewelry, motorcycles, designer clothes/handbags, had cosmetic surgery, taken first class holidays, etc. They also bought a nice home in the most expensive part of the city which they have completely gutted/rebuilt, and extended (twice!).

He lost his job a year ago. They cut back their spending, but used the balance of the inheritance money to live. He has now found another job - but at half his previous salary. They are now dipping into savings to meet their obligations each month, but this strategy cannot be sustained as they will have exhausted their nest egg in another 2-3 years.

The mortgage is their biggest problem - takes her entire income to pay it each month. They made a half-hearted attempt to sell the house a year ago, but had little interest as it is a quirky house (with the extensions they did), and priced too high.

Long way of saying: they are speeding toward a financial brick wall, but seem to have their heads in the sand. It will be awful when they finally 'crash'. They will be desperate, and will inevitably turn to me and our other sister for help (we both live modestly, and have savings).

We are worried, and don't know what to do. We've spoken to her about our concerns, and she listens, but then just carries on. Any thoughts/advice would be appreciated.

goralka Sun 25-Nov-12 14:01:21

how is it your problem unless she asks you for a bailout?
you seem to be expected it so I guess you know sis best.
in which case just say no very firmly. 100k is shitloads.
simples!!

goralka Sun 25-Nov-12 14:01:33

*expecting

QueenofNightmares Sun 25-Nov-12 14:01:48

I think you honestly need to sit her down explain everything and why its such a bad idea tell her you will help her with ideas and showing her how she can cut back on certain things and you're always there for advice others theres the CAB if she feels she needs more than you can help her with. Just let her know you're there and you're not judging. Beyond that there is nothing you can do but wait for her to either come to her senses or crash and just be there for her then.

diddl Sun 25-Nov-12 14:03:13

Just say no!

In all honesty if they have savings for another 2/3 yrs-they may both have better jobs by then.

I doubt I would ever give my sister money-unless I didn´t want it back.

She always pleads poverty yet spends as if there is no tomorrow.

I don´t get it.

If she found herself homeless I wouldn´t see her on the street, though.

ll31 Sun 25-Nov-12 14:05:19

i think you have to be ready to say no, tell her now your savings ate for uni for your kiids etc or whatever and make it clear you wont be giving or loaning.. you're right not to as if you do give them money it'll just put off the day when they deal with their financial problems

HildaOgden Sun 25-Nov-12 14:06:22

I wouldn't help out in this situation,it is completely of their own making.They are adults,leave them to their lifestyle choices (and the subsequent consequences).

This isn't a story of someone hitting hard times,it's a story of a flashy couple thinking the money pit is endless.Let them learn,it's not your problem.

CalamityKate Sun 25-Nov-12 14:11:32

I'm afraid if it were my sister and she asked me for money in the same circumstances I'd laugh in her face. Are you seriously suggesting that these people don't realise how feckless and hopeless they are?

NamingOfParts Sun 25-Nov-12 14:12:42

Does your spendthrift sister talk finances with you? If so then I would be having the 'no bailout' conversation with her sooner rather than later.

She might be Micawber in her outlook but you need to make clear to her that your savings are not one of the somethings that will turn up.

cozietoesie Sun 25-Nov-12 14:14:56

I wouldn't even tell her about the savings, NamingOfParts.

Just say no if it happens, Earlybird. It doesn't sound to me as if they'll be without the wherewithal to buy a tin of baked beans - just not enough to fund a lavish lifestyle. Their choice to spend it now and your choice to live modestly and save it for later.

Earlybird Sun 25-Nov-12 14:20:23

I honestly think she approaches money/spending the way an alcoholic approaches drink - can't resist, even though it wreaks havoc on health/relationships/future, etc.

My other sister and I have voiced our concerns with 'spending sister' many times - but it falls on deaf ears. In fact, last year we seriously discussed buying an asset from 'spending sister' (can't think of a better thing to call her), to give her some ready cash (as opposed to simply loaning her money which we'd never see back).

Spending sister is currently on a beach holiday with her dh and dc. She thinks she 'deserves' it, and announced she was economising by going now rather than at high season. She is delusional when it comes to money, and her dh seems to go right along with it.

Earlybird Sun 25-Nov-12 14:24:41

Namingofparts - I think you are right. A formal 'if you keep on this path, don't look to us to bail you out' discussion must be had with her. It almost feels like planning an intervention with an addict.

marriedinwhite Sun 25-Nov-12 14:31:33

I wouldn't help her. When they hit the wall they will have to learn to cut their cloth.

VivaLeBeaver Sun 25-Nov-12 14:33:29

Just say no.

Under the circumstances more than reasonable to refuse. She needs to learn to stop spending and if you keep bailing her out she'll carry on. Why should you fund such a lifestyle?

cozietoesie Sun 25-Nov-12 14:34:51

Earlybird

It is like planning an intervention with an addict - because that sort of consumption is an addiction - with complex causes.

And like an intervention, it will probably have absolutely no effect.

Look after yourself first.

MadameCreeper Sun 25-Nov-12 14:35:10

If she approaches you for money say no, we only earn xxxx we don't have anything left over. Don't ever mention your savings to her.

FredFredGeorge Sun 25-Nov-12 14:40:37

Just MYOB - if everything collapses the house repossessed etc. they'll still have good incomes and the experience and ability to get well paid jobs if they lost that. They may need that to learn a lesson, but you bailing them out or berating them before won't help them.

Ginandtonicandamassageplease Sun 25-Nov-12 14:43:59

Really tricky. My sil sounds similar as she spends money like there's no tomorrow and on nothing of any significance. I actually dread to think where it all goes. The trouble is that every time she has found herself in a fix she knows that pil will bail her out. This cycle has been going on for 15 years and she still holds out her hand every time she needs something. I think if she really believed she wouldn't get another handout then she would have to manage her money better. I would suggest the same maybe true with your sister? It's just the convincing them that there's no emergency find that's the difficult part. At least your sister has invested in property and expensive items - all could be sold if they needed too, even if the sum isn't as much as they would have hoped for. I really do feel for you - good luck

Ginandtonicandamassageplease Sun 25-Nov-12 14:44:44

Emergency fund I mean!

Whoknowswhocares Sun 25-Nov-12 14:45:32

Just like an addiction to booze, she will only seek to change her behaviour if it causes a crisis. Even if you did give her money you would actually be harming her because she needs to get to rock bottom in order to change

Why does she know the details of your finances anyway? I wouldn't be allowing her that sort of knowledge especially if you think she will try to get you to give it to her!. Keep the details of your finances private and leave her to get on with her choices. She is an adult and has to learn that there are consequences to spending money you do not have

Earlybird Sun 25-Nov-12 14:48:43

Spending sister is very concerned about money, but there is a complete disconnect between their lifestyle and their income. Only 3 weeks ago, she told other sister that she was worried they only had £200 in the chequing account. And yet, now they are on holiday.

We keep telling her that they need to make changes now while they're able to make choices. If it gets to the (almost inevitable) point of them losing the house, they may not have any freedom to choose how to proceed.

cozietoesie Sun 25-Nov-12 14:51:52

Something has always 'turned up' for her - be it capital from inheritances or other family bailouts. Let her get on with it and lead your own life is my advice.

Earlybird Sun 25-Nov-12 14:54:59

Spending sister does not know details of my finances (or those of other frugal sister), but does know that we all got equal money from small inheritance and from sale of Mum's house.

Frugal sister and I should have secure financial futures. It will be very difficult to live in comfort and see spending sister struggle. But it is a situation entirely of her own making, and she's got there by making extravagant choices for years. She hasn't come to us for help yet, but it is inevitable that she will.

cozietoesie Sun 25-Nov-12 14:55:53

Sorry - I should have said. If you're going to pick up the pieces for anyone, be prepared to do it quietly for (and directly to) her DC, the likely future victim(s) of it all.

fuzzpig Sun 25-Nov-12 14:56:00

Just like a substance addict, she will not change unless she hits rock bottom. That won't happen if you bail her out.

So, if you did help her, not only would you be hurting yourself (am guessing your family doesn't earn as much as them), you would be damaging her chance of ever learning. So, no YANBU of course.

I do think an intervention is necessary. And I agree, please do not share any of your financial info with her anymore.

I know different people have different outgoings but I am shock at 100k not being enough. It is more than I could dream of.

I feel sorry for her DC, they are getting such a bad example.

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