How I Mooched Off My Parents With My Pride (And Their Retirement) Intact

March 27, 2019

Some of the toughest calls I handle as a financial coach are situations where someone is struggling to make their bills because they loaned money to a loved one or have taken on the responsibility of supporting others. Understandably, they wanted to make things easier for someone they care about, but now they’re under stress because they can’t meet their own obligations.

I’ve been there before

My parents and I experienced this dynamic ourselves almost 20 years ago when I was diagnosed with cancer. I was barely in my thirties and, like most people my age, I was healthy, working hard, and enjoying my free time playing softball, volleyball and boating with friends. 

I was also in the second year of building my own practice as a financial advisor, so my savings account was thin (okay, non-existent). However, my income was steadily growing and I was confident I would be on solid financial ground within 1-2 years.

After my diagnosis, I was not able to work for several weeks during treatment. Since my income was built around commissions, it didn’t take long for the revenue stream to dry up, the savings to be depleted, and the medical bills and credit card balances to start growing out of control. 

The thing that made me cry about having cancer wasn’t having cancer

Strangely enough, I never cried over the diagnosis – I was confident in my medical team and it was beyond my control really. However, I did cry the day my parents wrote a check to cover my mortgage payment. That really broke my heart because I should have known better than to let myself get into that vulnerable financial position. 

Seriously, I talked to people daily about emergency reserves and disability protection and here I was taking money from my parents to pay my bills. I was also fully aware of my parents’ financial picture as government employees trying to retire soon. At that time, we didn’t know how long my illness would go on, but I knew they loved me enough to jeopardize their own futures for me – that’s just the kind of people they are.

Making a plan to pay them back

When I eventually came out the other side with my health intact, we agreed on a payment plan so I could reimburse them for all of the bills they helped me with. My parents insisted it wasn’t necessary to pay them back, but I explained that I had to for my own peace of mind.

So we created a monthly payment plan, put it in writing, and agreed on an interest rate that was minimal. The rate was higher than what they could earn at the bank but much lower than I would have paid to a credit card company (win-win). As my situation improved, I ramped up the payment.

What I learned in the process

It took a few years to fully reimburse them, but I learned several valuable lessons by handling my dilemma this way:

• Making the most of living below my means: I had developed the habit of living without those monthly payments, so when I was finished, I immediately redirected those dollars to my retirement plan. I had a lot of catching up to do. I had also learned to live below my means, and it felt great.
• Practicing what I preached: I now practice what I preach and try to maintain 3-6 months of reserves on hand for life’s next unexpected curveball. I also always, always enroll in my employer’s short-term and long-term disability programs.
• Rethinking career choices: I re-evaluated my career choice and found a full-time, non-sales position with a reliable salary and good benefits (just in case the cancer came back).
• Respecting my siblings: By paying my parents back for everything, I avoided potential tension down the road with my siblings who may not have appreciated the burden I was putting on our parents or felt I was being rewarded for making poor financial choices (or burning through their potential inheritance).
• Resolving not to repeat history: I came out of that situation determined not to go through anything like it again.
• Taking care of the most important thing to me: Most importantly, my parents’ financial future was left intact.

We lost Dad about five years ago, but I’m happy he and Mom passed some great lessons along. They always provided a safe place to fall and never allowed me to hit rock bottom, but they also helped me get back on my feet with my pride intact.