What is wrong with people today? I never had to use a credit card and lived dirt poor. When I turned 15, I worked and improved my life with no welfare or credit cards! Now everyone pulls out a credit card and buys a Lexus. This includes my daughter-in-law. I am not going to bail them out again. Is it wrong that I refuse to give them any more money? I am on a fixed income now. Curious about your opinion. – Brenda
That's a mighty sweeping question you ask upfront! I'll narrow my response to the subject of money and credit. While there is plenty amiss with “people today,” there is also plenty that's really quite great. My personal and professional stance is that most Americans are trying exceedingly hard to both do well and do what's right.
However, I do not believe it's a smart idea to provide constant handouts to capable adults. Unnecessary cash gifts infantilize people. It's so important to learn how to be financially independent, and part of that is struggling through problems. Still, just about everybody fumbles from time to time, and reaching out when you truly need help is not wrong.
I've never met a person who put a luxury car entirely on a credit card. It just doesn't make sense. A new Lexus can easily run $50,000, so you'd have to have an awfully large credit line to even consider doing it that way. Many car dealerships limit the amount toward a new car that customers can put on a credit card. More, the payments and finance charges would be ridiculous. Even if your son and his wife somehow managed to charge their vehicle, certainly not “everyone” is doing such a crazy thing!
Whatever the case, I support your decision to snip these two from your purse strings. Setting them free is not wrong. Seems to me you should have pushed your son from the money nest long ago. If they're old enough to get married, they should be acting as responsible grownups.
It's hard to break old patterns, but I can tell that you're fed up. Gather these two and tell them that you will not (not just cannot) supplement their lifestyle any longer. You've probably told them as much before yet relented under pressure. However, as you say, you're paying your own bills with limited funds. Another family's excessive financial burden will hurt you. Be firm. Though you're mad now, you may bend when your son looks at you with big sad eyes and begs, “Please help me, Mom. Just once more.” You'll help him more by saying “no,” so stay resolute.
The same goes for co-signing. If your son and daughter-in-law ask you to add your signature to a loan or credit application, refuse. Co-signing a credit agreement means that you become responsible for payments if the account owner falls behind. Based on your question, you seem wary enough of credit as it is. If you help your son out by co-signing, you'll end up having to deal with the types of financial obligations you're trying to avoid.
In fact, tell your son and his wife you don't want to know about their financial problems unless they are absolutely desperate. If they fail to follow that rule, point them in the direction of the nearest credit counseling agency. A credit counselor can give them information on how to budget and pay off their consumer debt.
And if they don't tell you anything? Stop speculating. Their spending habits are not your business. If they overcharge and make mistakes, that's their affair. As long as they don't approach you for a donation, they're free to live in debt until they finally discover how to manage their money and credit the right way.
As for the rest of the country, there's nothing you can do about how millions of people charge and repay either. Yes, we are a nation of eager borrowers, but in many cases, charging stuff works out well. Credit cards are no different from any other tool. They can be used safely or dangerously. The choice is ours.
Got a question for Erica? Send her an email.