If you can’t afford it, don’t buy it: Why I feel like an outsider in my family

Everyone in my family owns a home, of at least 1500 square feet.

No, they’re not all paid off, and yes, I’m an outsider for not owning one, and more importantly, not wanting to own one.

They all understand in my mother’s words, that I’m a “hippie-yuppie consultant who sleeps on the floor, wanders and doesn’t want to settle down“, but they don’t quite get why, because they have a rough idea that I make a lot of money*, but aren’t sure if my loans are cleared yet.

*I don’t tell my family my financial details such as what I earn and more importantly (don’t) SPEND… because they are sure to feel 1000x more assured that in case anything happens to them, I’ll bail them out.
This just breeds laziness and carelessness in money management, especially if you consider that every member in my family makes over $80,000 a year each, except for my father.
Think of it like economic outpatient care (EOC), when parents subsidize their kids’ unaffordable lifestyles well into adulthood, but in reverse.

They are also absolutely SURE that when I have kids, I’m going to want to buy a home.

As if having a kid would immediately make me want to instinctively fork over a 20% down payment for a McMansion and be saddled with a house debt for the next 20 years.

So it never makes any sense to me when my siblings are so into buying homes and upgrading them.

I just don’t get it, mostly because they can’t afford it.

It’s one thing to be able to afford it and build a billion dollar home like Ambani, but they aren’t billionaires.

Let’s take one side of the family for example.

(Small disclaimer: I am about to throw around some big numbers here. No disrespect meant to smaller incomes, I am talking in context of just this one situation.)

Their household income was $400,000** 2 years ago, which is way more money than any family needs.

They are not “poor” or “struggling” by any freaking means

** I don’t have updated numbers. We aren’t exactly the sharing, touchy-feely types who disclose information like that to each other. I only found out by accident, because they were bragging and trying to impress us.
We just did the obligatory “OOO” and “AAAH”, but secretly feel that it isn’t all it’s cracked up to be. Notes on that to follow.

$125,000 of it, is “stable” income, meaning it’s a salaried job at 40 hours a week.

The rest at $275,000 is variable, business income at its peak, which isn’t a lot if you consider how much they give up to get it.

One of the Dalai Lama’s 18 rules for living is:

Judge your success by what you had to give up in order to get it.

Consider that a normal work week is 40 hours, but for that business, they work double that.

So that $275,000 income is really halved, to $137,500.

This is why we’re not impressed with the $275,000 number as a success of theirs.

I also know that last year, the business suffered, and I am not sure they even pulled in close to that amount. A fraction, to be sure.

Did I mention that they also spend like rockstars?

So we’ve established that it’s around $400,000 for their income (as far as I know). That means they SHOULD be able to afford a house at $800,000 if you double their income. ***

*** Bear with me here, I know it isn’t realistic, seeing as the bulk of it isn’t a stable income.

They just bought a McMansion at $1 million.

And here comes the kicker right in the face:

So why the hell did they have to borrow $250,000 from my parents?

I get that my mom is not exactly Mrs. Finance here, but she was under the impression that my brother took that money out of their home equity (which by the way, they’re almost done with, yay parents!!) to help them invest it.

It wasn’t until I checked their statements that I saw that $250,000 missing from their investments.

Where was the money? What investments? I don’t see a statement, Mom.

Then I decided that I’d head back and straighten this out, sibling-a-sibling with my brother, and figure this mess out.

Contract delay after contract delay (I keep getting extended!), I finally thought: Why not shoot an email out to him? Give him a chance to explain what is going on. Maybe there’s a good reason for all of this.

BF however, did not share my optimism. He had a gut feeling the money was borrowed like a “free” line of credit from my parents, and none of it was invested as my mom believed.

Unfortunately, BF was right.

THEY BORROWED THE MONEY AS THE DOWN PAYMENT ON THEIR McMANSION!!!!

*facepalm*

My first reaction was: Are you serious? How can this be? Why would he lie to them? :(

BF was more like this:

Why are you so trusting? You know your family is all messed up with money.

They’re good people, but they just don’t know what a dollar is.

He knew that you could just take a look at their statements and basically figure out something was wrong. He can’t fool you. Your parents however….

So there you have it.

He borrowed $250,000, while earning $400,000 (supposedly) as a peak income, to put down as a down payment on their current, million dollar McMansion.

He promises to pay them back within 3 years. I’m skeptical. They really are the Joneses.

If you can’t afford it, don’t buy it. If you don’t need a McMansion and most importantly, it is out of your financial grasp, then don’t buy it.

Don’t take money from your ageing parents to fund your image-conscious lifestyle. That is just utter crap and I’m sad, disappointed and angry.

Am I the only one in my family who gets this?

Even my parents are not blameless in this. They spend like crazy, they think we kids are their retirement funds, and they don’t watch their money.

I have a feeling my dad knew, but didn’t want to say it to my face. He knew my brother borrowed the money not to invest, but for his own use.

That is really crap, because all of the siblings should have a say in terms of allowing other siblings to “borrow” from our parents, seeing as we should look out for their best interests.

MY PLAN OF ACTION GOING FORWARD

  • Gathering all of my mom’s statements as much as I can, to piece a history together
  • Need to know if it was $250,000 starting, or if there was MORE that was borrowed
  • Need to map out all the payments made each month/year and calculate the rate of their return
  • Need to show him the stats and say: You say 4 years? I say you’re full of crap.

There is no way they’re clearing that $250,000 balance in 4 years.

That’s $62,500 net a year. And considering their spending habits, I highly doubt they’re able to bank $62,500 a year even on the kind of income they make.

Their spending is the culprit here. Not their earnings. They can only see what they earn. They never see that what they spend is the problem.

Besides, if they could bank that kind of money, they wouldn’t have needed to borrow it from my parents in the first place.

And there’s my sad conclusion to what happened to my parents’ finances.

EXTRA READING:

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About the Author

Just a girl trying to find a balance between being a Shopaholic and a Saver. I cleared $60,000 in 18 months earning $65,000 gross/year. Now I am self-employed, and you can read more about my story here, or visit my other blog: The Everyday Minimalist.