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family loans

Family Loans

Question: My grown children keep asking to borrow money from me. I want to help them, so I lend it to them, but they don’t pay it back. I constantly see them wasting money by eating out, drinking, buying the latest cell phones along with other technology, and redecorating their homes. Their financial situations don’t seem to be improving in spite of all my loans. I am in my late 70s and need my money for living expenses and medical bills as I get older. What would you do?

Answer: STOP giving your children money. You aren’t lending to them, they’re taking it as a gift. It almost never helps to bail-out a financially irresponsible adult. Your heart sounds kind, but your methods definitely need to be adjusted. Instead of giving them money when they have a crisis, there are plenty of small ways you can actually help them.

  • Buy them some groceries or a grocery gift card.
  • Give them a gas card
  • Pay a utility bill for them (directly to the utility—don’t give them cash)
  • Take them to Consumer Credit Counseling / Money Management International
  • Help them negotiate with creditors.
  • Help them move out of the house that they can’t afford by packing boxes and rallying the family to help with the physical move.

But most importantly, don’t pay for anything large like rent, a mortgage payment or buying them a car. You’ll need to stand by and watch them struggle, but it is in the struggle where they’ll gain some real fiscal strength. Bailing them out produces a strong dependence on you, not on their own problem solving abilities.

If there is a true medical emergency with your child, son- or daughter-in-law, or grandchild, you might help out with medical bills, but usually giving money rarely solves financial problems.

This may sound hard-hearted, but adult children need to stand on their own two feet financially, and facing the consequences of their decisions is a good way for that to happen.

Do you have any other suggestions to help this man?

Turkey Soup

Does Freezing Meat Dry It Out?

Question: I just read that cooked meat dries out when frozen -- do you freeze cooked turkey meat? Also, do you just wrap your pumpkin (and other quick) bread in plastic or do you use foil when freezing?  I'd love to see post a turkey soup recipe. I'm new to this even though I'm a senior citizen.

Answer: There's nothing wrong with being a senior citizen and wanting to learn new ways to make your money go further than before. Acutally it's great that you want to learn.

We do freeze turkey meat and store it in zippered bags. Getting as much air out as possible keeps it from getting dried out. An alternate, but more expensive method would be to use a vacuum sealer.

We wrap our quick breads in foil, but plastic wrap would work just as well. Just be careful when you store them in the freezer to protect them from getting crushed.

How do you store meat in your freezer so it doesn't spoil?

 

We do have a turkey soup recipe posted in our subscriber only area (Member Archive), but here is a copy of it:
http://www.americascheapestfamily.com/newsletters/12/1/turkey-soup


CHEAP WINTER MEALS 

When the weather is chilly, nothing warms up a house, and your bones, like a hot bowl of home made soup. Throughout the year, we save chicken backs, ham bones and turkey carcasses (all of the bones), in plastic bags in our freezer. We cook one turkey (bought at Thanksgiving time) almost every month of the year (except the really hot summer months). Annette boils the carcass to make the broth. 

Here’s the recipe we use:
  
 When we make soup, we make a huge pot, eat some and freeze the rest.

Turkey Soup Recipe
 
Starting with an 8 quart stock or sauce pot.

  • 6 quarts of chicken broth — Annette uses broth from boiling a turkey carcass, refrigerating it overnight and skimming off the fat.
  • 2 cups carrots — sliced rounds
  • 2 cups celery — chopped
  • 4 cloves of garlic or 2 tsp garlic powder
  • 1 large onion — diced
  • 1 to 2 cups of miscellaneous leftover veggies from the refrigerator or freezer—broccoli, cauliflower, green beans, corn and peas all work great.
  • 1 to 2 cups mixed dry beans, (be sure to soak in water for two hours, dump the water and rinse, then repeat the process a second time. This will reduce the gassiness of your beans and ease digestion).
  • Add 2 cups of cooked, diced turkey / chicken
  • Salt and pepper to taste.

Alternate: You could also add noodles or brown rice (don’t use white rice, it will turn to mush)

Add either beans or brown rice to simmering soup mixture at least 2 hours prior to serving. If using noodles, add to boiling soup 1/2 hour before serving.

kids, cell, phone, texting, technology, parents, paying

Taming Technology - Book Excerpt

Question: I was wondering how you deal with kids and technology, particularly cell  phones and texting. I remember reading in your books that you do not allow texting at the dinner table, but how does your family deal with kids and cell phone plans, etc? Thanks so much!!

Answer: You ask a great question and we actually answered it in our upcoming book The MoneySmart Family System. So we’ll give you a preview here:

Taming Technology
The use of technology can be a blessing or a curse to a MoneySmart family. There are always newer, faster, and more expensive electronic “must-haves” being advertised. Our kids are besieged with messages from their friends that if they don’t have the latest and greatest techno-gadget, they are a social outcast. Technology has, in many ways, become a status symbol for this generation. We need to have a balanced and intentional approach to the use of technology in our homes, or we’ll find that the technological appetite of our culture will take us to places we don’t want to go. In this section we’ll share how we’ve tamed the techno-monster in the areas of TV, gaming, music, computers, and cell phones.

Managing Cell Phones
We simply don’t pay for our kids to have cell phones. But with more than 85 percent of kids between the ages of fifteen and eighteen “owning” a cell phone, we are definitely going against the flow. We know that it is easier for some families to keep track of their kids with phones, but we don’t think that way. Spending $100 to $175 each month for a family plan with multiple phones, texting, and data is not within our budget. Once again, if you do this and can afford it, are you setting your kids up with an expectation that you will continue providing well into their twenties? Or are you setting them up for an expense that they may not be able to afford when they’re finally on their own?

If you think your child must have a cell phone for safety reasons, consider a limited, prepaid phone. It’s cheaper and can’t be easily abused—too much talking or texting simply turns the plan off earlier and they’ll have to do without. It’s kind of like teaching them to budget their money, except they’re managing texts and talk time. We have a very limited prepaid cell phone plan on what we call the “family cell phone.” It costs us less than $60 per year and is only used to communicate with other family members.

Phones at Night
It’s important to limit your kids’ use of cell phones at night. One family we know “docks” all phones, including the parents’, at 9:00 p.m. in a specific spot in the kitchen. No phones in the bedrooms at night. Kids need their sleep and to be able to set boundaries on communicating with friends.

Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net 01.27.14

stressed out over car loan to family

Lending to a Niece for a Car—Went Flat

Question: I bought a car for my niece, but didn’t have the cash so I put it on my credit card. It was only $5,000 but my niece has stopped making payments to me and offered to give me the car back. She says the car is only worth about $1800 now. What should I do?

Answer: This may sound heartless, but repossess the car and sell it. If your niece has stopped making car payments to you she may also have stopped making insurance payments as well. It’s your property, and it’s her lesson to be learned. If the title is in her name, get her to sign it over to you. When it sells, deduct what you receive, from what she owes then make out a ledger sheet outlining what she still owes and when her payments are due. Have her sign a written agreement saying that she will repay the balance and hold her to it. Even if she doesn’t fully pay you back, you’ve recouped some of the costs and hopefully given her a real life lesson in the costs of careless borrowing.

A few of other things:

1)     Before you sell: Do your research about the worth of the car. Your niece has been careless when considering the cost of buying a car, she may also be inaccurate in assessing its value. When you do sell, only accept cash—no monthly payments from the new buyer.

2)     Pay it down: Take the money from selling the car and immediately pay it on the outstanding balance on your credit card. Don’t even think about spending a penny of it. It may be possible to negotiate a lump sum pay off at a reduced amount, so ask the question of your lender. If they say ‘Yes’ you win, if not, you need to keep paying.

3)     Count your blessings and learn YOUR lesson: Right now it looks like this lesson might cost you $3200. That’s not terribly expensive, but it can be if you choose to “help” out a family member again. Remember that the banks probably turned her down for a loan for good reason, that’s why she came to you for a loan. Leave the lending to the banks and just love your family members—maybe bake some cookies, but don’t lend any money. Cosigning or lending to family members rarely turn out well financially or relationally. If you follow our advice, you’ll never be in this place again and your financial future will be much brighter.


Image courtesy of David Castillo Dominici / FreeDigitalPhotos.net

Pets on a budget

Sick Pets on a Budget

Question: One of our cats got really sick and we tried to help her, but she finally had to be put to sleep. The vet bills added up to a couple of thousand dollars, which we didn’t have.  She’s gone, we’ve grieved, and now we’re struggling to make the payments each month. Do you have any advice to pet lovers?

Answer: Many people forget that pets cost much more than food and water. Other expenses include: micro chipping, neutering / spaying, licensing, immunizations and vet bills. Add to all of this miscellaneous supplies, toys, repairs (to your home), carpet cleaning and training and you’ve basically assumed the cost of raising a child.

To combat the “unexpected” expenses of pet ownership, we created a separate category for pets in our budget. Every two weeks we put aside a predetermined amount of money for pet care. Every family will have different values and financial limits, so how much you save is up to you. But you’ve got to save something for your pet.

We know that some of you may disagree with this, but for our family and budget this is what works. When an emergency or illness occurs, we let finances be our determining factor. Spending money you don’t have, never helps the situation. If our pets require surgery, and we don’t have money saved to cover it, we’ll have to choose to put the pet to sleep. Please don’t think that we’re hard hearted. Our German Shepherd’s all have lived to a ripe old age and we’ve cared for them well, and sobbed when we had to say good bye. We love our pets, and they are an integral part of our family, but they simply aren’t people. Plus there are so many wonderful pets waiting for homes through rescue groups that trying to keep a very old, or very sick animal alive, seems like it might be for our own emotional well being, but not the animals.

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