The Almighty Dollar

Restoring some fiscal sanity in our -- negative savings rate -- lives

2.20.2006

Parent Trap - Vol. I

A recent phone call from my mother went something like this:

"OmigodIjustgotthepropertytaxbillinthemail,it'ssohigh, I think we have to move!"

It was 9AM on a Monday morning, and I had just arrived at the office when my cell rang. She sounded breathless, like she had just run up a flight of stairs, which only exacerbated the alarming nature of her call.

Before continuing, I should mention that I have tremendous respect and admiration for my parents. Both immigrated to the United States in the early 70s under courageous circumstances, and English is their second language. They are gracious, loving, caring, and always supportive. That's why it pains me to see them struggle in their old age, primarily due to a succession of poor financial decisions.

Fortunately, there is a silver lining in this case. While they may never fully learn from their mistakes, I have.

My parents moved to a newly-constructed home (it had to be the model) in the spring of 2005. This action was finally taken after I staged an "intervention," resembling those of the drug and alcohol abuse kind. I flew out to their Midwest home armed with spreadsheets full of calculations. Basically, they stopped being able to afford their mortgage -- and maintain a business -- ummm, sometime in 2003.

Payments on the luxury car were also weighing them down. It had brought one week of joy and six months of misery since Dad drove it off the lot. (Note to couples: consult your S.O. or else car = bad surprise.) To my brother's astonishment (he said I could never convince them to sell) and mine, they agreed to downsize the car and home.

In ex-urban counties, where housing developments like my parents' are sprouting up, new residents typically are charged a monthly fee to help pay for infrastructure costs, such as water and roads. Property taxes in the first year are also lower. All of this information is available before, at, and after closing.

So about that phone call... Why did Mom panic upon receipt of the bill, when she knew the taxes would go up this year? The simple answer is my parents weren't prepared.

Problem is, they are never prepared.

I know life is hard to predict. But the control we do have, however small, can make a radical difference in the quality of our lives. Use it wisely, and your sons and daughters will surely thank you for it.