Ask Liz Weston

Q: We have bailed out our adult son and his wife so many times that we are dead broke. Our savings are gone and so is most of our monthly income. I bring home $1,000 a month and my husband is a disabled vet with an income of $2,000 a month. My son has a good job and his wife works, but they think it’s more important to have fun than pay bills. Unfortunately, there is never enough money after the fun to pay the bills. It’s always, “The lights are going to be shut off” or “The car is going to be repossessed” or “There’s no food in the house.” They have two kids and another on the way. Do we let them go without electricity and food for our grandkids or do we just keep shelling out?

A: Here’s what you probably already know: if your son has a good job and his wife works, your grandchildren are not going to starve. Yes, the lights might get shut off and yes, the car might be repossessed and yes, those consequences might be the best things that ever happened to this pair of overgrown teenagers.

Your son and his wife know they can push your buttons with these tales of dire “emergencies” created solely by their own irresponsibility. It’s long past time for you and your husband to disconnect the wiring that has caused you to impoverish yourselves for their benefit. Saying, “No, I’m sorry, we can’t help you” may not cure their free-spending ways, but it will keep your financial ship from being sunk in their wake.

Dear Liz: I didn’t think your advice was very good to the parent who asked about retirement planning for a 25-year-old son who was living at home. You got on your high horse about how the parent should charge him rent because he has to learn responsibility sometime. I took the opposite approach with my kids and told them they were welcome to stay with me as long as they liked, provided they were saving money for a down payment on a house. I also advised them to put 20% of their incomes into retirement accounts because it’s important to start saving when you’re young and not saddled with expenses. Once they saved up their down payments, they moved out and bought their own houses. It really didn’t cost me anything to have them live with me and I got to spend more time with them, which is important too. Too many other old folks complain that their grown kids never visit, but I wonder whether they ever did any favors for their kids when they were younger.

Q: I would like to buy a house. However, I live in an area where home prices are rising rapidly, and I worry that there’s a housing bubble that could pop. If I have to move in a year or two and prices have dropped in the meantime, may I simply give the house to the bank and walk away as if I never bought it? I know I’ll lose my down payment, but are there other consequences?

Q: My wife and I, who are in our early 60s, have always prided ourselves on paying as we go and never using credit. After the column in which you wrote about thin credit, however, we decided that we might build up our credit. When my wife applied for a credit card though, her application was rejected because of “inactive or insufficient recent credit history.” How do people like us with no debt and no recent credit history get a credit card?

Q: I have accrued $7,000 on credit cards with a total credit limit of $10,000. My interest rates average over 20%. My wife has $4,000 in debt on two cards with a total credit limit of $14,000, and her rates are 6% and 9%. Is it a good idea for me to transfer my high-rate debt onto her lower-rate cards, or should we not risk ruining her good credit scores?