My mom is coming to visit me and Mr PoP for a week at the end of the month. This has never happened before. NEVER. In fact, she’s only ever been to our house once for a few hours, at a small party we hosted after we eloped. So yeah – a whole week in our house is going to be… interesting.
She’ll be flying over 2,000 miles across the country and spending eight days in our house. Eight days! In our house! Can you tell I’m a little stressed out about this? Anyhow… stress aside, my mother’s arrival brings up an interesting question. How much does your family know about your financial situation?
You, dear reader, have great insight into the current PoP financial situation. You can check our current net worth, and know about some of the big purchases that we have made lately like getting the Tree pruned and buying a new computer. It’s a unique position you are in, because you don’t know us in real life. So we feel like we can share more with you in the hopes that we’ll all learn from it.
Family, on the other hand, is an entirely different situation.
It can often seem that they know too much about us and there’s far too much history there for us to be eager to give family that kind of detailed insight into our finances. But, all families are different – and Mr. PoP’s family is about as different from mine as they come. So how does that affect what each side of the family knows about our finances?
Mr. PoP’s Parents – They Were Our Bankers, They Know Almost Everything!
When we wanted to buy a rental duplex in the middle of a recession (while Mr. PoP was earning minimum wage!), there was no way we would qualify for a cash advance the size we would need to be competitive cash buyers in the foreclosure real estate market. So Mr. PoP negotiated a loan of $50K from his parents to buy our duplex. Even though they didn’t pull our credit histories or anything like that, we were totally up front with them about the state of our finances. They knew how much we had in liquid savings, ball park figures on IRAs and 401Ks, and knew about how much we were bringing home from our jobs each month.
Since then, they haven’t been kept 100% up to date with our finances, but they have been made aware of some of the major milestones. So lately it’s more of a question of what they don’t know.
- Mr. PoP’s parents don’t know that we’ve been paying our HELOC down at a crazy fast rate – check out the progress in July! – and have prioritized our debts so that we expect to pay them back the $50K loan a year ahead of schedule, and hopefully to avoid having to extend the HELOC or any other credit line to do so.
- The last update on the PoP net worth that Mr. PoP shared with them was when we were sitting at around $300K. August net worth was over $344K, so they’re a little out of date there.
- But that’s about it – Mr. PoP’s parents have a really complete financial picture of the PoPs even if they don’t know all the nitty gritty details like you!
My Parents – Why Is It Any of Their Business?
We’re grown-ups. At least that’s what we’ve been pretending to be for several years now. We go to work, come home, hang out with the cat, pay taxes, and are generally pretty responsible citizens. Part of being a grown-up means we can eat ice cream for dinner if we really want to, and I no longer have to return clothes that my parents think are “too form fitting”.
My paretns live on the complete other side of the country, and in case it wasn’t clear from the level of stress the impending arrival of just one half of the parental unit causes, ours is not the healthiest of relationships. So how much do my parents know about the PoP’s financial situation? Almost nothing.
- They know that we bought our house about three years ago when we got married and did some work ourselves to fix it up. They have no idea how we financed it at the time of purchase, and also no idea that we refinanced with Wells Fargo last year to drop our rate to 3.25%. (I still get joy every time I say that rate…)
- They know we bought a duplex at the end of 2010, but again have no idea what it cost or that Mr. PoP’s parents loaned us the $50K to make it happen.
- I’m sure we’ve never mentioned the undeveloped lot that we own that makes up the rest of our real estate portfolio.
- They don’t know that Mr. PoP ever voluntarily took a pay cut to minimum wage, nor do they know that our salaries are now.
Health of relationships and fiduciary obligations (from the $50K loan) aside…
Why Are There Such Big Differences in What We Share?
The best answer I can think of is that Mr. PoP and I share many of the same financial values that his parents do – and these are very contradictory with the ways that my parents have always treated money.
I think because we value saving, investing, and preparing for our futures the same way that Mr. PoP’s folks do, we feel comfortable talking about our progress along those goals. But my parents have never really been savers or investors, so we don’t really have a whole lot there to connect about.
I also worry about resentment on the part of my parents – for Mr. PoP’s parents and their generosity towards us with the loan, and for us for our success.
So how much does your family know about your finances? Do they know all the dirty little secret debts? Do they know about every little stock market win? And if you’ve got a spouse or partner, do their families know as much as yours?
(Bonus points for Asking Mrs. Pop about what form-fitting clothing she had to return in her teen years!-Mr Pop)
This article was included in the Carnival of Personal Finance #382.