Finances as a family matter

Posted: July 02, 2014

LOTS OF THE questions I get from readers involve friends, families and finances.

Here are some topics that came up during my online chats from folks seeking advice about money situations close to home:

Q: My daughter has found herself in a situation where she has to move. Her credit is bad and she is having difficulty getting approved for an apartment. Should I co-sign? Moving back home is not an option.

A: Do not co-sign.

I know you want to help. However, unless you are truly prepared to make her monthly rent payments, don't do it. If her credit is bad, this is an indication that some financial issues are there already. Maybe it's because she was irresponsible, maybe not (like she's lost a job). But in either case, don't link your finances with hers. Instead, help her explore various living options. Perhaps she can move in with a friend temporarily.

Q: Our 28-year-old daughter is entering a master's program this fall and we anticipate she will require education loans. My wife and I are in our early 60s and expect to retire in three to five years. Should we co-sign an educational loan for our daughter if we are asked?

A: Don't co-sign if asked, and certainly don't offer.

Co-signing means you are borrowing, too. You are not a backup borrower. And I would definitely not recommend it since you are so close to retiring - unless you have the money to pay the loans. And if you have the money to pay the loans, then just give it to her. (I don't believe in loaning money. It can get complicated and/or ugly.) It's not too late to encourage your daughter to work and save up to pay the cost of the program.

Q: Do you tell or have you told anyone in your family about your net worth? Until my spouse let it slip to a sibling (I am a very private person about money), only our broker knew how healthy our assets were. Am I being silly to like to keep the information private?

A: You are not being silly. And absolutely no, I do not tell folks what my net worth is, certainly not family. It's none of their business. Besides, in some families the more they know, the more they may press you for money.

Q: I have a 3-year-old daughter with my ex-boyfriend. He did not want to be involved, but his mom does. We see my daughter's grandmother about once a month. One of my daughter's favorite dishes is green-bean casserole. During a holiday meal, the grandmother insisted on giving it a whirl. Little did I know that she had put bacon in it (she knows my daughter and I are allergic to pork). My daughter ate about half of it before her face and lips started to swell. Fortunately I had her medication with me. She was rushed to the hospital, where they administered more medication. I got a hospital bill for $3,000. I think my daughter's grandmother should pay it, but she refuses. Her excuse was that it was only a few slices of bacon in the recipe, and she didn't believe me when I said we were allergic because in the past I served bacon to her. But it was turkey bacon. How do I go about this? I'll just pay it with a credit card, but now I'll have that debt to work off. Any suggestions? I'm so mad.

A: The fact that the grandmother knew about the food allergy and still put bacon in the dish leaves me stunned. I would be mad, too. Even if she thought you were overstating the issue, why take the risk? She is absolutely responsible and should pay any part of the bill not covered by insurance.

But you know what? You asked. And you were in the right to ask. However, since she refuses, unless you take her to small claims court, you are stuck with the bill.

Q: I have a friend who regularly gives my husband, me and our daughter very expensive gifts. We cannot afford to come even close to her generosity in return, though I wish we could. Should I say something about our budget and inability to do so or just continue to thank her profusely?

A: Give sincere and heartfelt thanks and say nothing more. You don't have to feel guilty. The friend gives what he or she can. You give what you can afford.

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