My brother and his wife have $60k of credit card debt with the interest rates being between 23-28%. They also have student loan debt of $18k and a car loan of $23k. I have no idea what the interest rates are on those but I assume they’re quite low. After doing some research on Glassdoor, his base salary is between 150-200k with an additional 50-100k in stock and last time I checked his wife never found another job after getting laid off during COVID in 2020 so he is the only major source of income.
Our mother on the other hand is retired, living off social security, and has a little over $50k in retirement savings after selling her house a few years ago. She’s overweight, has unhealthy lifestyle habits, and has started to have health problems in the past few years which I expect to get worse and more frequent going forward.
My brother, now in his mid 30’s, has always been terrible with money but he claims they’ve dramatically overhauled their finances and spending over the past 8 months. Now he wants our mother to lend them $25k, interest-free, over 24 or 36 months. They’re also taking out a $25k bank loan at 15% for 36 months.
My initial reaction was hell ****ing no, this is a terrible idea and there’s a very good chance my mom isn’t going to see that money again. In addition, my sister-in-law decided she hates my mom and I years ago for some unknown reasons. Last time I went to visit, she didn’t say a word to me and apparently her feelings are the same towards my mom. This makes me skeptical of whether they will make an honest effort to repay my mom.
Is this as bad an idea as I think and what alternatives does my brother have? I do want to help my brother get out of this.
Oh boy, where do I even start with this financial dumpster fire? Let’s break this down piece by piece, because there’s a lot to unpack here.
First off, your brother and his wife are drowning in debt. $60k in credit card debt at 23-28% interest? That’s not just bad, that’s catastrophically bad. They’re hemorrhaging money every month just on interest. Add in the student loans and car loan, and we’re looking at a full-blown financial emergency.
Now, let’s talk about your brother’s income. He’s making $150-200k base with $50-100k in stock? TWith that kind of income, they shouldn’t be in this mess in the first place. The fact that they are tells me there’s a fundamental disconnect between their income and their spending habits.
Your sister-in-law not working since 2020? In this economy? With this level of debt? That’s a luxury they absolutely cannot afford right now.
Now, onto the most outrageous part of this whole situation: They want to borrow $25k from your retired mother who’s living on Social Security with only $50k in savings? Absolutely not. This is not just a bad idea; it’s borderline elder financial abuse.
Your mother needs every penny of that $50k for her own expenses and potential health issues. She’s not a bank, and she’s certainly not in a position to be handing out interest-free loans.
Here’s what needs to happen:
- Your brother and his wife need a serious reality check. They’re in a crisis of their own making, and they need to own up to it.
- They need to create a detailed budget ASAP. Every dollar needs to be accounted for. No more vague claims about “overhauling their finances.” They need hard numbers and a concrete plan.
- Your sister-in-law needs to get a job. Yesterday. With their level of debt, they need all hands on deck.
- They need to consider selling assets. That car with the $23k loan? It might need to go. Any other valuable items they can part with? Time to have a garage sale.
- Your brother should look into picking up side gigs or freelance work to boost their income even further.
As for alternatives to borrowing from your mom, they could consider a personal loan from a bank or online lender for the full $50k they’re trying to cobble together. Yes, the interest rate might be high, but it’s better than putting your mother’s financial security at risk.
Here’s the bottom line: Your brother and his wife got themselves into this mess with poor financial decisions, and now they’re trying to drag your vulnerable mother into it. Don’t let that happen. They need to face the music and fix this themselves.
If you really want to help your brother, offer to sit down with him and his wife to create a budget and debt repayment plan. But make it clear that your mother’s money is off the table. Period.
Remember, sometimes the kindest thing you can do for someone is to say no when they ask for something that’s not in their best interest. This is one of those times. Stand firm, and hopefully, this will be the wake-up call your brother needs to truly get his financial life in order.