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.

HecatePropylaea Sun 25-Nov-12 14:58:21

What would happen if you spelled it out. You and your other sister sit down with her and say look, you are free to make your own choices but you are going to end up in the shit. When this comes crashing down around you - please do not ask us for financial help because we will not give it. Do you understand? We will not bail you out.

Perhaps she needs to know that NOW because in the back of her mind, she actually does think that she will be able to guilt the money out of the two of you.

Snog Sun 25-Nov-12 14:59:19

If they earn £100k pa between them even though dh has taken a 50% pay cut they will be able to look after themselves.
If they lose their house presumably there will still be equity and if not then this income is plenty to fund a rented house.

Don't make your dis-s worries yours OP.

Hassled Sun 25-Nov-12 15:02:46

Yes, you do need to spell it out now, before the crisis actually happens. You are not financially able to help her when she runs out of money so please do not ask - that sort of thing.

And when the crisis does happen, you and frugal sister could help her DCs with clothes and contributions towards school trips, half-decent presents etc - so targetted help that only the DCs will benefit from, rather than help your sister will fritter away. If you wanted to, obviously.

LilyVonSchtupp Sun 25-Nov-12 15:03:04

Sorry but I don't really understand the problem. They have savings that will see them through the next two to three years? That's more secure than about 90% of the population. I really wouldn't give their money 'worries' another thought.

Cahooots Sun 25-Nov-12 15:08:21

Whatever you do you must never lend her money. At the moment you find her behaviour irresponsible and silly but at leat you have a normal'ish sisterly relationship with her. If you ever lend her a money, you will not get it back, you will end up with an awful relationship and you will be in no position to offer her any emotional support she may need.
My DH has lent his useless DB and DSIL money on numerous occasions. They promise to pay us back and never do. It is horrible, we can afford to loose the money but it has tainted all of our relationships. In my eyes they have 'stolen' money off my DC and I am annoyed my DH has allowed it to happen. I am polite and friendly to them, mainly for my DMil sake but i think they are dishonest thieves .
There are a million similar stories on MoneySavingExpert
Continue to tell her what you think but try and distance yourself from the situation. Perhaps you could tell her about the MoneySavingExpert site, some of the stories that reformed big spenders tell are amazing.

pigletmania Sun 25-Nov-12 15:47:51

I would refuse. They made teir bed, now they have to lie in it IMO. Tat money you havr is for your family. You have savings as you were modest with your money

DontmindifIdo Sun 25-Nov-12 15:58:25

It's not yoru problem, don't give her any money, as a loan or by buying an asset. It's not your problem, and you know that it will only delay the inevitable, not stop it, she won't stop spending until she has to stop, and you giving her money will just mean she doesn't have to.

I would say you sit down with the other siblings and agree none of you will bale her out. She will not change until she's lost everything, and if that everything includes your money, it will go too and you won't get it back.

I agree that you should make sure she knows this isn't going to happen too - so far something has always turned up, and she might secretly think it will again. And it might, from her DH's side of the family, but there's no reason for you and your siblings to lose your savings/financial security in order to stop her having to be a grown up.

pootlebug Sun 25-Nov-12 16:07:19

What everyone else said. And I wouldn't be buying any assets from her either - if she has an asset she can sell she can sell it on the open market via ebay / auction / whatever route. If you and your other sister buy it you are too likely to be guilt tripped into paying more than market value for it (because she will almost certainly think it is worth more than it is), then selling something you never really wanted anyway at a loss.

I agree that spelling out clearly now that in no circumstances will you or other sister give or lend any money in the future is a good idea - so if at the back of her mind that is her get-out clause, she'll have to rethink. Sadly I think you're right and she won't modify her behaviour until forced to.

Blu Sun 25-Nov-12 16:19:30

Tie your savings up in a long term scheme where you cannot get it out. While she seems hell bent on spending every penny that comes her way, including your money, given half a chance, you seem very over involved. She has a DH, he is the person she is now front line family with. If they, adults with the ability to earn good money, get themselves into predictable difficulty, what does it have to do with you?

Why would you even need to ask if you should help your sister to squander even more money at the expense of your Own family and children?

Earlybird Sun 25-Nov-12 16:35:03

Thanks for advice.

At this point, frugal sister and I are not involved other than as listeners - and we are horrified at what seems inevitable.

Spending sister lives 3 hours away by car, so most contact is by phone (and that is only 2-3 times per month). Most every conversation is mainly about what she has been doing (naturally), which almost always involves spending on non-essentials followed by some sort of lament about how money is in short supply.

Her attempts to 'cut back' involve saving 10's of £, not hundreds or thousands (which is what is needed). While it is a start, it is a drop in the bucket. Shopping at Tesco instead of Waitrose and M&S is not going to salvage the situation.

BranchingOut Sun 25-Nov-12 16:43:55

I don't know if this work, can you in some way get her interested in savings as a hobby? If she is acquisitive and competitive by nature it may have some mileage.

Maybe the idea of 'X many TESCO value products = money she can spend on a pair of shoes' will have some appeal?

Point her towards Money Savings Expert or maybe the money-saving threads on here.

The main thing you could do for her would be to help her take a more realistic approach to selling her house. Press her to get it re-valued in time for the spring market.

GrendelsMum Sun 25-Nov-12 16:45:01

Why not go onto the debt forums of MoneySavingExpert and take a look around, and maybe ask for their advice?

I can pretty much guarantee that the people there - many of whom have been in the same situation as your sister - will tell you that you should not bail her out. She needs to realise that she has a problem and work to fix it herself.

I'm afraid that my BF's husband got into debt - again, a man on a very high salary, taking endless holidays, etc. Her family bailed him out. He's now in debt again...

ENormaSnob Sun 25-Nov-12 16:55:43

You would be stupid (and unfair to your own dc) bailing out your feckless sister.

In fact, you would only be delaying the inevitable by giving her money.

Why should your dc suffer because your arse of a sister can't pull her head from her rectum long enough to sort herself out. This is entirely hers and her dh's making. Leave them to it.

whatsforyou Sun 25-Nov-12 17:18:07

It doesn't sound like she wants to save money as that would require a life style change and I think she has got a bit too comfy with her extravagant ways.

If you lend give, because you won't get it back her the money you won't be helping her out a hole, you will be enabling her to maintain a better lifestyle than you have for a little bit longer. As some one else said you will just be delaying the inevitable.

How would you feel if you handed over your savings and a month later she booked another holiday because of the stress?

blackeyedsusan Sun 25-Nov-12 17:27:49

if you do not need your inheritance for a feww years, you could put some of it in a bond that you can not access for a couple of years. make sure you have enough for emergencies though.

keep strong with your frugal sister and plan what to do/say when the inevitable happens.

Earlybird Sun 25-Nov-12 18:06:43

Enormasnob - I agree with you completely.

What is most difficult is to know that she and her dc will suffer, but it is a situation entirely of her own making. She has had many opportunities to make changes, and has not done so. It's infuriating, bewildering and very sad.

DontmindifIdo Sun 25-Nov-12 18:08:43

I assume in order to help her out, she's going to need £20 - 30k? It doesn't sound like a few hundred. Let's put this in to perspective - that would be enough for your DCs to leave uni debt free. That would be enough to pay for the deposit on a flat. That would be enough for the most fabulous wedding.

If you give it to your sister, what will happen? Do you think she'll stop spending and suddenly start living within her means? Or do you think she'll be thankful, clear her debts, then book another holiday she 'needs', replace some furniture she 'has to get rid of', pick up some new clothes 'she just has to have'... in 12 -24 months you'll be in the same situation, she'll be in a mess financially, but will have had a great couple of years, and when your DCs start uni/ are planning their weddings/ are saving for their first home, you will know you could have helped them but you let your Sister squander money you would have otherwise have given to them. And when you see them struggling, you will hate that she has taken that from them.

I agree with blackeyedsusan - if you can live without this money (which if you give it to her, you'll never see again) put it in an account you can't touch for 2 years so for the next 2 years you can't make a stupid decision help her.

DontmindifIdo Sun 25-Nov-12 18:14:57

Actually, as well, has she actually asked you or your other sister for help or are you just watching this slow motion car wreck and thinking you must get involved? Because if she hasn't asked, doing nothing is the best option.

The best thing you can do is nothing, seriously.

Unless you bale them out yet again and say goodbye forever to your Savings. Eventually it will catch up with them and then they will learn. It is not your responsibility and you have tried to talk to her to no avail.
Don't be a Safety net.

Earlybird Mon 26-Nov-12 15:02:38

Once again, thanks for perspective and advice.

So far, frugal sister and I are doing nothing - other than expressing our concern, and worrying about spending sister. We hope she will recognise they are headed for disaster and change her ways, but it seems unlikely at this point.

It is like watching someone drive full speed toward a brick wall - and hoping they will brake or veer off course.

MadBusLady Mon 26-Nov-12 15:16:30

It's hard to know what you could say, isn't it. She's just living a whole lifestyle bracket above where she should be. £100k just doesn't buy you those kinds of things. It sounds like it should, but it doesn't. Until she grasps that she won't change.

FunBagFreddie Mon 26-Nov-12 15:20:27

I think you need to let her get on with it, and if the worst happens it's up to her to deal with it.

Some people only seem to be able to learn the hard way. If that's what it takes, it will be good for her in the long run.

expatinscotland Mon 26-Nov-12 15:24:08

If she asks, say no.

NotQuintAtAllOhNo Mon 26-Nov-12 15:28:19

Luckily, crashing to the brick wall in her case will not kill her, it will merely be uncomfortable until they have sold some assets. Dont worry, it is her choice.

But I agree you need to spell it out to her, that she will not be bailed out, as you and your other sister are saving for your childrens education future, and wont see funds that are earmarked the children flitted away on repaying aunties debts.

DontmindifIdo Mon 26-Nov-12 15:36:14

It's hard when you can see someone is being self distructive, but you can't fix this. You really will just have to sit back and wait for the fall out.

It's going to be messy, but it's also going to be the only way she learns. Best it happens now when she's got time to hit rock bottom and then rebuild in time for retirement, than be facing poverty in her old age. (From what I've seen, poverty when you're young enough to work and have hope of improvement looks much easier to cope with than poverty post retirement)

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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