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.

cozietoesie Mon 26-Nov-12 15:38:45

I'm more jaundiced than you, DontmindifIdo. My own experience is that people rarely pick themselves up - they just range farther and farther in looking for easy solutions to their problems/more mugs to fleece. The OP's sister and her husband may be an exception of course.

Earlybird Mon 26-Nov-12 15:40:04

It is easy to imagine saying no because it is an infuriating and completely unnecessary crisis she has created. Atm, she can just about juggle things but as I've said earlier, she won't be able to continue in a few more years and it will all come crashing down.

What will be heartwrenching is to see her suffer, while frugal sister and I live in relative comfort with money for a few luxuries. Neither frugal sister or I want to see her suffer/struggle, but know that she has had plenty of 'scares' that should have taught her a lesson. But she always managed to find money somehow (she has already sold some of her jewelry - for a knockdown price).

Giving/loaning her money could jeopardise our own financial security.

Frugal sister actually asked me the other day (and I think she was serious), if we should consider buying spending sister's house as an investment and let her/the family live in it for a modest rent. <sigh> Even if we could figure out a way to manage it financially, it is not what I want to do.

DontmindifIdo Mon 26-Nov-12 15:44:40

Earlybird - don't do it! If she then doesn't pay the rent, would you evict her??? Also, what makes you think she'd sell it to you and use the money to clear debts, or would she dump the house she's made "quirky" on you then buy something else?

Tell your other sister it's not your job to fix this, so stop thinking of solutions.

Let it happen, support her emotionally and any practical way you can (offering spare rooms etc) if it comes to it but otherwise, let it happen. Hard as it is to do nothing, there's nothing you can do to fix this problem, more money would just paper over the cracks.

cozietoesie Mon 26-Nov-12 15:44:51

It's very hard, Earlybird. And I've been there so have a little idea of what you're feeling. You're best keeping yourself apart from it though - or if you do feel an overwhelming need to help, keep it to her children who may come crashing down with her through no fault of their own.

When I say that, I do not mean give her money 'for the children' by the way because that will likely be spent by her as general funds. I'm talking longer term. (Children is often the hook that they try to reel you in on, sadly.)

EldritchCleavage Mon 26-Nov-12 16:03:34

Unfortunately, spending sister is probably quite capable of pulling you all down with her before she realises she has to change how she does things (if she does). I agree this kind of behaviour has parallels with addictions, and like addiction it can be accompanied by quite titanic levels of selfishness and deviousness.

Don't 'lend' her anything, ever. In fact, take note if she asks to 'borrow' money, because given her habits and lifestyle, you know you aren't going to get the money back, so she would either mired in denial or actively dishonest in describing it as 'borrowing'. Either of those mindsets is a good reason not to lend.

And it is ok to hang on to savings while she has to sell her house, car or other assets. Those savings are your financial security.

PessaryPam Mon 26-Nov-12 16:25:24

Just don't get financially involved with her at all. Tell her your DH says no or you gambled the inheritance away. Don't let her know what you have and stay firm. And read this, www.ft.com/cms/s/0/202ed286-6832-11df-a52f-00144feab49a.html#axzz2DLY58rN6

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