The Carr Report: Help! My Sister Married a Bum!!!

Help! My sister married a bum!!! How can I help?

He started off good. Military man and good provider for his family. He got kicked out of the military.  When he got kicked out of the military, he, my sister, and their two children moved in with my parents.  Neither one has had a job in the two years they have been living with my parents.  Yet, they’re still making babies. Now, it’s three children and them living with my parents.

I have zero respect for dude! I want to say something but not sure what to say? What can I do?

~Facebook Question

Damon says:  It’s painful to watch a loved one struggle. It’s frustrating to watch a loved one struggle and be completely OK with somebody else taking care of them—be it a relative, a friend, a stranger or the government. It’s annoying when they expect other people to feel sorry for them and bail them out time and time again.

Why are you so annoyed? Because in the back of your mind, you know—THEY’RE BETTER THAN THAT! You also know that your parents raised their children. It’s their time to sit back and enjoy life in peace. Five people living in the house, three of which are small children, doesn’t sound peaceful.

You say that your sister married a bum. Did he marry a bum? Based on your definition, both sound like bums to me.  Neither appears to have drive and ambition. Neither seems to feel it’s their parental duty to get up and bust their butt for the sake of their children, even if they’ve completely lost hope in themselves.

They’re living the life—eat, defecate, etc., and live happily ever after on your parents’ dime! I wish I had it that easy, but my pride wouldn’t let me do it! I understand we all fall on hard times and may need help from time to time. I subscribe to this model, “God helps those who help themselves.” Good enough for God, good enough for me!! I believe in giving a hand up, not a hand out. Handouts oftentimes lead to enabling.

Your parents seem to be enablers. They’re doing it for the sake of the grandkids. That’s both understandable and noble of them. Your parents need to show some tough love. They need to tell them, “We love you. We’re here for you. We want the best for you. It’s time to leave the nest! I’m giving you six months to find a job and find your own place to stay. If it takes you longer than six months, the kids are welcome to stay until you land on your feet. But it’s time for you and your husband to get up, get out, and do something. I’m not going to be here forever. While I’m living, I need to ensure that you know how to take care of yourself and your family. You’ve been here two years. During this time you added another baby. I don’t see any forward progress in your life. You and your husband seem to be content living under our roof and not actively pursuing a better life for you and your children. I raised you better than that. You and your husband are more than capable to seek employment, get housing and provide for your family.”

What can you do?  First, stop blaming him as the singular source of their demise.  Both he and she can do better. Second, you have a better/deeper relationship with your sister than you do with him. Pull your sister aside and try to better understand her story and perspective. Third, talk to your parents. Let them know what you see on the outside looking in. Allow them to share their perspective.

That’s the best you can do in this situation. There’s no law against people lacking ambition and drive. You can’t control what your parents allow to go on in their household. Simply voice your concern to your loved ones and concern yourself about what’s going on in your own household.

___________

 

Damon, My wife and I have $89,000 in student loans.  That is the only debt we have other than our mortgage. We obviously want to pay it off as soon as possible. We are looking to move to a new house prior to our children going to school. I have $75,000 in my 403(b) retirement account.  I know it will be heavily taxed and penalized if I were to take money from it. However, it will help us to become debt-free and would save approximately $1,500 per month in student loan payments.  If we pull money from our 403(b), we’ll have $89,000 paid off in about one year thanks to some side hustles and a settlement coming our way. We’d appreciate any advice and help.

~ Inbox Question

 

Damon says:  The numbers don’t add up!  You either have a bad calculator, a flawed spreadsheet or you’re missing pertinent data points.

You have $89,000 in student loans. You have $75,000 in your 403(b) plan which is the non-profit company’s version of the 401(k) plan. If you liquidated the entire 403(b) plan without fees or penalty, you still owe $14,000 on your student loans. Nothing was paid off. You still have the $1,500 monthly payment on student loans until paid in full. How are you saving $1,500 per month?

Secondly, minimum payments on a student loan of $1,500 per month sounds inflated. I know Sallie Mae is a pain in the butt but it sounds like she has a personal vendetta for you.

I believe that a retirement plan should serve its intended purpose—RETIREMENT!! So does the IRS. That’s why they make it hard for you to access money in a retirement plan before retirement age.

Here’s the good thing: You will not incur penalty and fees on your retirement plan because you CANNOT draw down money from your 403(b) to pay off student loans. Last I checked, it’s not an allowable exception. What’s allowed is for you to take a loan from your 403(b) plan. The max amount that you can borrow is 50 percent of your vested balance or $50,000—whichever is less.  50 percent of your vested balance is $37,500.  Not enough to pay off $89,000. I wouldn’t have recommended it anyway. There’re drawbacks to loans from your retirement plan: Namely double taxation, lower ROI, inability to pay back 403(b) loans AND continue to contribute to the 403(b) plan. Then there’s opportunity cost. Your current balance of $89,000 in your 403(b) will grow to be $652,000 over 20 years if you simply left it alone and allowed it to compound.

Truth is, you’re looking for a shortcut and an easy way out. There’re no shortcuts, only setbacks.

Consider an income-based repayment plan with your student loans to lower your payments. Work your side hustle for extra income, Use the income from it as well as your settlement proceeds to accelerate the payoff of your student loans. 

I’d encourage you to get a firm handle on your student loans before you move to a newer house with a bigger mortgage payment. 

(Damon Carr, Money Coach can be reached at 412-216-1013 or visit his website @ www.damonmoneycoach.com.)

 

 

 

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