A question about : How much is 'enough' for a single pensioner?
Dear all,
Your advice would be much appreciated as I'm sooooo frustrated...
As I've posted in other threads, my hubby is likely to lose his incapacity benefit in 5 weeks' time, and because I work full time he's not entitled to JSA, so we will need to tighten our belts a bit.
We've worked out all our bills etc and once we've taken into account our fixed commitments such as our mortgage, utilities, council tax, annual expenses (car/house insurance, putting a bit aside every month towards Christmas etc. ) we'll have about Ј130 a week left, so we've set a budget of Ј100 a week which has to cover us for groceries, petrol, dog food, entertainment, gifts, haircuts etc., leaving a 'buffer' of Ј30 a week for emergencies. We also have savings of just over Ј5000, so the wolf's not exactly at the door.
We reckon we'll be OK, and we count our blessings that we're much better off than many...our mortgage finishes in 4 years, and that will help a lot.
My frustration comes from my MIL, who lives in the next village. She's 74 and was widowed 3 years ago. She's always been very, very extravagant, and when her husband (my hubby's step-dad) died, any restraint that she'd previously shown over her spending went out of the window.
When she and her 2nd husband married ten years ago, they each sold their own house to set up home together. His house was sold for Ј360k, hers was sold for Ј130k. They bought a house for Ј260,000 and banked the remaining Ј230,000.
FIL became ill soon after they were married, and was unable to monitor the household spending. MIL went doolally and ran through the Ј230,000 nest egg in less than 5 years (about Ј100,000 was spent on renovating the house, the rest was frittered on clothes, accessories, fine wining and dining, shopping trips to London and Milan etc). When FIL died in 2011 there was just Ј7000 remaining.
Within a year of being widowed she had to downsize to a smaller house because of financial worries. By this time, she was overdrawn by Ј10,000.
She sold the house for Ј260,000 (none of the 'renovations' had added a penny of value to the house), and bought a bungalow for Ј136,000. After paying conveyancing, removals and clearing her overdraft, she was able to bank Ј104,000. This was in March 2012.
Yesterday she phoned in tears, because she's so worried about her finances.
We went round and I went through all her finances for her...there's now just Ј14,000 left of the Ј104,000 nest egg that was supposed to last her for the rest of her life.
She's 74 and in excellent health - she's never spent a day in hospital or had a serious illenss, and she keeps herself fit, active and slim, so there's no reason why she shouldn't live until she's well into her 90s or beyond...
She reckons she's spent most of the Ј90,000 on home improvements. But by 'home improvements' she doesn't mean anything structural that will add value to the property - she means soft furnishings, garden furniture etc. The rest has gone on clothes, cosmetic surgery, cosmetic dentistry, foreign holidays, and eating out (literally) five times a week.
The property was valued just before Christmas and is now worth Ј144,000.
We went through her income and fixed commitments, and her pension income totals Ј1,797 per month. Her bills (including annual amounts for car insurance etc.) total Ј432 per month.
We pointed out that this means that she has 'spare' revenue income of Ј1,365 a month (or over Ј300 a week!!!), but she just bemoaned how she can't possibly survive on such a pittance and she doesn't know what to do, and she may as well kill herself now because after going without all my life, I swore I wouldn't have an impoverished old age...
I was totally gobsmacked.
My parents (aged 87 and 84) get by comfortably on less than half of that amount, and as I pointed out at the beginning of this post, my hubby and I will have budgeted to spend ony Ј100 a week (of which Ј25 is petrol for me to get to work every day).
I went onto Compare the Market and managed to get considerable reductions for her car insurance, house insurance and gas/electricity bill (I saved her Ј770 a year overall) but even that didn't cheer her up.
She knows she's a spend-a-holic, so we offered to 'hide' her credit cards and cheque book and give her a weekly allowance for a month to try to get her to develop more thrifty spending habits, but she wouldn't hear of it.
I'm at my wits end how to get through to her.
We suspect that she thinks the answer to her problems will be to sell her house back to an agency who will allow her to remain living it until she dies....but we're not sure if she's able to do that given that her 2nd husband wrote a will leaving her a life interest in the house, but after she dies the estate is theoretically to be split into 4 equal parts (1 part each for my hubby and his sister, and the two other equal shares for FIL's two sons). My hubby and his sister are pretty resigned to not inheriting a penny (they're just glad you can't inherit someone's debts!) but both of FIL's sons are in poor health (one has MS and the other has COPD) and both are probably expecting something to come to them in the fullness of time as it was what their dad worked hard his whole life to ensure.
It seems criminal that MIL has squandered the money that FIL specifically said he wanted to go to his two children...and she shows no sign of slowing down her spending.
My hubby is sick with worry about her, and worried she'll do something silly (she kept talking about life not being worth living on such a pittance)....
Can anyone think of what I can do or say to try to get through to her to make her see that she needs to put a brake on her spending, and start counting her blessings instead of feeling like she's destitute and hard-done-by? I don't have the words to break through to her - she just can't see how she can possible make any economies, and she thinks a slide into penury is unavoidable because she doesn't have a 'living income'. When someone is that far detached from reality, how can you show them the error of their ways?
By the way, my hubby's sister is also on a modest income, so it's not as if MIL doesn't have examples right under her nose of people (and loved ones, at that!) managing on far less than she thinks she needs for herself...
Best answers:
- Wow!
She could be quite comfortable........if she grew up and acted like an adult!
It seems as if you have enough to worry about yourselves, OP, without taking on your MIL 's profligacy. - A rich boyfriend would solve her problems?
- I wonder what she would think of the mean queen, who lives off next to nothing and wears old clothes:
https://meanqueen-lifeaftermoney.blogspot.co.uk/ - Most of us start to face reality in our fifties, if not before, in that there will come a time when we won't be able to rely on the next pay rise, the better job etc. to see us through. We will reach a point when we retire when we are pretty much on a fixed income, with maybe just annual adjustments for inflation. Your mother in law seems to have only just worked this out for herself and the money-tree has long stopped budding.
I think Ј1000 per month should suffice as long as you have some savings for emergencies and to provide a little extra income. Now I have no mortgage I have to pinch myself that my outgoings are so low and once I retire I will have so much time to make household economies I think I should manage quite well. The budget won't run to too many extravagances, but I intend to be warm and well-fed and able to pay my way in the long-term - Pollycat has said it all. I couldn't possibly add to anything she has written.
Someone with that mindset cannot be helped. She needs to see it for herself, and until she does, there is no helping her. It's like trying to get a tone-deaf person to appreciate music, or talking to a blind person about different works of art.
As regards selling the house and renting it back, this is not a good idea. She would have no security of tenure and could end up having rent increases and ultimately, eviction. - There is no helping her at 74 I reckon. We all get more and more set into our ways as we get older, and while you can offer all the advice there is I don't think she will change her ways. Perhaps make it clear that if she becomes destitute you will be in no way able to support her.
Saying all that, good on her for not wanting to be the richest person in the graveyard. - https://www.minimumincome.org.uk/
Also read Joseph Rowantree research on the subject. - Thanks for your input folks - I know she appears to be incorrigible, but I need to keep trying to get through to her. Failure isn't an option!
If I don't manage to help her to change her ways and take some responsibility, she'll just carry on with her headlong rush to insolvency, and I dread to think how she'd cope if she had to survive on her pension alone, with no emergency or rainy day fund.
If she doesn't change and runs through her remaining capital, she'll then start running up a huge overdraft and huge credit card bills . She hasn't got the coping skills to retrench and recover from a mountain of debt, so it's much better to try to prevent her getting into debt in the first place.
After a bit of gentle persuasion, she let me go through her bank statements this morning. She has a balance of Ј400 in one current account and she's overdrawn by Ј6,700 on her other current account. Her savings account has a balance of Ј18,600. She owes Ј2,800 on one credit card and Ј4,900 on another.
So, really, instead of having Ј20,000 as she asserted last week, she actually has only Ј4,600. At her current rate of spending, that won't even last her until Easter!
I think I scared her a bit today by drawing a doomsday scenario for her, so she did finally relent and allow us to take her credit cards and her checkbook home with us. We left her with Ј150 in cash to last her until next Friday, and she was horrified, as if we'd left her with tuppence.
Hubby is going to take her grocery shopping in Aldi tomorrow, and allow her to spend (no more than Ј20!) of her Ј150 on stocking up her fridge and cupboards.
She's only signed up to this 'experiment' for one week, so we'll see how it goes.
I think my name is mud at the moment and I expect I'm being royally slagged off to all her friends for being an interfering witch....but she asked for my help, and this is the only way I can see of helping her in a practical and concrete way.
It's awful, because it feels like we're being terrible people by treating her as though she's a child who can't take care of her own money...and part of me just wants to say "S*d it, just leave her to it, if she bankrupts herself it's her own stupid fault..."
But, really, she is like a child when it comes to budgeting, and I'd feel even more guilty if we just stood by and let her spiral into debt. We need to take responsibility for her, since she can't seem to take responsibility for herself....
Are we doing the right thing? Or should we just stop interfering???
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