So I discovered today there is an amazingly cheap apartment in my building on the same floor. It is in a horrible shape (hence the cheapness) but my moms DH is a contractor who has enough skills to make it into a candy for just the cost of materials.
My mom, who is taking 2 hours each way to come from Brooklyn to see the baby (she adores the baby) would of course like to live here, but she has no money. The building requires 20% down.
What frustrates me is she gets upset at me for not selling a property I inherited in another country to give her the down payment. In her mind, that is the ONLY WAY dowpayment can happen. I just can't get through to her on that point. She just does not believe that money can or should be saved, it is to come as a lump sum windfall only. I am the foolish one here. She just really believes that something like that cannot come from savings. That you can't expect her to save that much.
She has not a cent saved. She does not believe she spends anything or does anything extravagant, and yet she has no money.
Her husband and her make around 120K a year and their rent is $600 a month! (he works for the building after hours).
They should be able to save for a down payment rather fast if they wanted to and just looked where the money is going.
And they have nothing saved! A cheap Suzuki with payments, and a closet full of clothing are all their assets. Money just flows as water through their fingers. Nothing in retirement. I tried so many times, but I can't convince her that she won't be able to live on Social Security -- she just does not want to think about it. If she at least had a paid off apartment, it would be something. And she could, if she just wanted to, but she just believes it is impossible and ridiculous that I even suggest it.
My mom's financial views frustrate me so much!
November 2nd, 2011 at 08:43 pm
November 2nd, 2011 at 09:08 pm 1320268132
November 2nd, 2011 at 09:59 pm 1320271160
November 3rd, 2011 at 02:48 am 1320288509
November 3rd, 2011 at 04:41 am 1320295305
November 3rd, 2011 at 03:28 pm 1320334097
I could scrape up enough money for the downpayment to lend her, but it is extremely scary -- because that is our entire emergency fund.
My mom is a very very decent person, she is just completely dense when it comes to money. She has these pre-conceived notions and is convinced that this is how things are.
It would be very nice to have her live in the building -- she is amazing with the baby and it would be easier on us.
Do you think it is a good idea to tell her how much we saved in our retirement accounts all by ourselves in just 6 years we've been working? I am sure she would be floored because to her it is an impossible amount (not because she does not make enough, but because she cannot save) and it will demonstrate that saving consistenly works. On the other hand, she may feel that, we have so much money. When it is NOT a lot of money when it comes to retirement (something that may have to last for 30 years). I don't know if it is better to tell her or not.
November 3rd, 2011 at 04:17 pm 1320337073
November 3rd, 2011 at 04:18 pm 1320337124
November 3rd, 2011 at 05:15 pm 1320340527
Well, that is what I want it to do, however I am reluctant to sell now because of the political and economic situation in that country. If the regime changed, it could appreciate dramatically, so I was prepared to hold it long term. It is a property in the center of the capital, so it has a great potential to appreciate if the country's economy improves (that will very likely be the case if there is a change of leadership.
That, however, can take a decade or more, so this is long term thinking. My mom thought I should have sold before the crisis, got what I could, and used the money now. She says in a decade it may be too late to do her any good (it may be true). But for us... we can live on what we make, so I feel I should not just sell it for less to make things easier.
And the other reason I am reluctant to sell it is that I am irritated by her thinking that it is the ONLY way for her to ever own a property, that she is not even trying to save. I don't want to encourage this way of thinking. I don't see that property as easy money, or different money. It is just as valuable as money I have earned and saved, and I don't believe it should be treated differenlty. Not so for her. She would not think of asking me to hand over any money that I have earned and saved, she is not that kind of person.
November 3rd, 2011 at 08:28 pm 1320352112
I know I'm speaking from a non-NYC perspective, but 120K/yr will buy a lot of family improvement.
What I don't get is that its a couple problem. I suspect both parties have the same spending pattern.
November 3rd, 2011 at 11:28 pm 1320362921
November 4th, 2011 at 08:26 am 1320395162
November 6th, 2011 at 02:17 am 1320545826
Does she respect and believe a religious leader, banker, best friend, important relative etc? Is her husband interested in moving and buying an apt. in the building? What is his view on savings?
November 12th, 2011 at 08:41 am 1321087282
Jerry