Mary asked for financial help. But I quickly surmised that what Mary has isn't a money problem—it's a mother problem. She can't say no to her two daughters, and she repeatedly sacrifices her long-term security for their desires. Blinding love that leads to poor decisions is something all parents must be on guard for, but letting your kids drain the Bank of Mom is even more unacceptable when they are 24- and 26-year-old employed adults!
Changing how she interacts with her daughters will be tough for Mary. But I have no doubt that she's up to the challenge—she has overcome plenty in her life. Married at 22, Mary made the difficult decision to initiate a divorce after 27 years (and took on the marital credit card debt, partly out of guilt). A few years later, during the financial crisis, she lost her job. When the owner of the condo she was renting decided to sell the unit, Mary couldn't find a landlord willing to offer her a lease, so she slept on the floor of her sister's dining room for months.
Dark times indeed. But Mary is a fighter who battled back. It takes guts to launch a business in a severe recession, and talent to make it fly. Mary had both. Yet her financial rebound is only a partial success.
"I'm ashamed of how poorly I've managed what I've earned," she told me. "I should be enjoying life, but I am so stressed about bills that I can't relax. The worst part is that I've been a poor role model, and my daughters are picking up my bad money habits."
When Mary started her business, she moved into an apartment near work and agreed to rent her home to her eldest daughter and two roommates. But her daughter always flakes out on paying her share of the rent. She also hasn't lived up to her promise to reimburse the $440 her mom pays each month to cover her car loan and insurance. Meanwhile, the 24-year-old daughter has a job and lives with Mary, yet pays no rent and seems content to let Mom handle the food and utility bills. No surprise, then, that Mary can't make ends meet, and is actually using her credit cards for groceries. This from a woman with a fabulous six-figure salary!
Next: Suze Orman's advice for Mary
My job was to help Mary bring the same guts and talent she shows professionally into her personal life. "I know you have it in you to do this," I told her. Here's the game plan:
Bring "Business Mary" Home
One of the best moments during our talk was when I asked Mary if she was good at her job. With a clear and confident voice, she quickly answered, "Very good." Oh, I loved that! Confidence! All too often women see their faults before their triumphs, or feel they shouldn't toot their own horn. That is so ridiculously wrong. I was happy that Mary is proud of her professional success. Now she needs to channel Business Mary's confidence when focusing on her personal life. No hesitation. No guilt. No worry. Focus on what needs to be done, and do it well—just like she does every day at the office.
Treat Grown Children Like Adults
While I wasn't thrilled that Mary's daughters were freeloading, we both knew that Mary helped create this dynamic—and let it go on far too long. Putting her financial foot down will not be easy, but it's not punishment, either. This is an important step that will help both daughters learn to respect their mother and to respect their word. They told Mary they would pay her for some of their expenses; it's in everyone's best interest if Mary holds them accountable.
Going over the daughters' finances, we determined that they could each afford to pay $400 a month. That $800 won't cover everything Mary provides for them, but it's a very good start. I also recommended that after talking to her daughters, Mary write out a financial agreement, spell out the penalty for not living up to the deal, and sign it with each daughter. I've found that bringing this level of formality to discussions can trigger a greater level of mutual respect.
Insure Only as Much as You Need
Mary was spending nearly $200 a month on three life insurance policies on herself. I understood her instinct to provide for her girls, but the truth is that they are adults. If Mary had the money to spare, I wouldn't mind so much. But she doesn't. She needs to focus on providing for herself in the here and now, not leaving her daughters something when she passes. I knew Mary wouldn't give up all three policies, but keeping just one that has a $50 premium frees up the other $150 a month.
Next: How to up your retirement savings
Call in the Good Guys for Help
Mary had ten credit cards with combined balances of about $48,000—and five cards were charging her more than 20 percent interest. She makes $2,000 in payments each month, but at those high rates, the balances weren't coming down fast enough. I encouraged Mary to contact the National Foundation for Credit Counseling (nfcc.org; 800-388-2227). The NFCC, a nonprofit, is the group anyone with a debt problem should turn to. If you have the income to repay your debts—and Mary does—the NFCC will enroll you in a three- to five-year debt-management plan in which you make your monthly payment to the credit counseling service, which then makes payments on your credit cards, often at a greatly reduced interest rate.
Up Your Retirement Savings
Mary didn't contribute to her company's 401(k), which offers a 4 percent match. Initially my advice to her was to contribute enough to get the match, about $80 each month. But then I threw down a challenge: Contribute $700. Her monthly take-home pay is nearly $8,000, so that's not a wild stretch. Mary didn't see where the $700 would come from, but she doesn't have a strong sense of how she spends her money now. Having money pulled out of your paycheck before it hits your checking account is often the best way to get serious about tracking and trimming monthly spending. And I have a sense that Mary is going to be so proud to see her 401(k) balance growing that the retirement fund will be its own motivation.
After an hour-and-a-half conversation, I knew I had thrown a lot at Mary. Too much? No way. "I can't wait for the new me," she said. "I'm excited." Me, too.
Suze Orman's latest book is The Money Class: How to Stand in Your Truth and Build the Future You Deserve (Spiegel & Grau). To ask Suze a question, go to oprah.com/omagazine_talk.
More Advice About Mixing Family And Money