Facing the Truth
WHAT WAS MY DAD thinking when he asked me to help him and my mom with their finances? Did he expect me to give him money? Maybe.
Up until that moment, my dad handled the family finances. Both he and Mom were retired, though my mom still worked occasionally as an adjunct professor. My mom assumed things were okay, though I had my suspicions.
One day, I saw a credit card bill that showed a large outstanding balance, and only the minimum payment made. I didn’t ask my dad about this, but I was concerned. I didn’t want to confront my parents about the state of their finances. Experts say that children must be respectful and sensitive when asking about their parents’ financial affairs. I am respectful—sensitive, not so much. I brushed off my sense that things were awry and moved on.
Still, I’d been waiting for the day when my father would ask for help. My first step was to create a summary of my parents’ financial life. I gathered details on their income, mortgage and car, as well as bank and credit card statements, and tax returns for the past two years. I pulled their credit reports to ensure that I had everything. Finally, I drew up income and balance sheet statements for my parents, which I shared with both of them. Then I left their townhome and didn’t return for a week. I wanted to give them a chance to digest and discuss what I had gathered and presented.
When I returned, I asked if they had questions. They looked lost, without any spirit. I reassured them that, now that we all knew their truth, we could come up with solutions. The burden would be on all of us, not just on my dad.
I suggested filing for personal bankruptcy. My mom’s retirement benefit included legal representation, so off we went to see an attorney. He took our case, and miraculously found the best-case scenario. Due to their age, income level and household size, my parents' unsecured debt—mostly credit cards—was discharged, meaning it didn’t have to be paid back.
My mom felt guilty. Most immigrants come to America to better themselves, not to declare bankruptcy. She believed she’d failed. I told her that many individuals and corporations declare bankruptcy. I pointed out that Chrysler went bankrupt, and yet the government bailed the company out so it could continue making cars. She quietly, reluctantly nodded her head.
After the dust settled, my parents never used a credit card again. They relied only on cash, personal checks and one debit card. My mom and I became more involved in managing their finances. And my dad? He retired from being the family accountant. He spent his time driving my mom to her various part-time jobs, while also picking up my son and treating him after school to burgers, pizza, fried chicken and Korean barbecue.
It has been 14 years since the bankruptcy and eight years since my dad died. I reflect on how much courage it took for my dad to confess that they had serious financial problems. It surely was difficult for him to ask his youngest son for help. I think my biggest asset during that time was staying calm. I didn’t yell, scream or blame. I didn’t ask how or why it happened. I immediately went into acceptance and then problem-solving mode. I think this was a relief to my parents. They didn’t have to explain their nightmare.
I’ve shared my own family’s financials with my wife and son. For validation and to learn of ideas that I may have missed, I’ve also shared our financials with a Vanguard Group personal advisor, as well as two other independent financial advisors. But for now, I still manage my family’s finances. Perhaps I’ll ask for help one day. Hopefully, it will be during a time of plenty rather than famine.
Venicio Navarro was born in the Philippines but grew up among the cornfields of Illinois, somehow surviving the heavy-metal rock music of his teenage years. He jumped into retirement and currently spends his time being a tourist, golfing and working on his health. Venicio's previous article was Living My Beliefs.
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