It's often very hard to give your parents financial advice. Dave Ramsey calls this the Powdered Butt Syndrome: Your parents don't want to take advice about money from the people whose butts they used to powder.
So the author and radio talk show host offers advice on The Early Show by answering three letters from his listeners.
My parents haven't saved for retirement; they are living paycheck to paycheck, and keep buying new cars. They won't discuss life after retirement. They feel they've worked hard and "deserve" the good things. I'm afraid they expect us to take care of them when the money runs out. What do you suggest?
Dave from Texas
A: The best you can do is bring in someone with credibility into the picture. If you have an uncle who does well, who they respect, try having him talk to your parents. Or it could be a pastor, or maybe bring them a book or take them to a live event. That way the advice is not coming from you, it's coming from the expert.
The other thing you can do is have a difficult talk. If they've been spending too much money and they don't have savings, tell them they're misbehaving. Explain to them that you're trying to build a future for your kids, and you're not going to be in a position to take care of them, too.
Parents do expect their children to take care of them when they get older. They want the kids to support them for a change. They've worked hard and they believe they deserve to be relieved of some of the burden.
My in-laws spend money they don't have on my kids. I've suggested to my husband that they give money for college if they insist on giving them something. He says it would hurt their feelings. They have no retirement savings and are deeply in debt. How do we approach this subject?
Beth from Kentucky
A: He needs to tell them, "We love you, but you're not setting a good example for our kids. You're trying to be sweet, but you're accomplishing the opposite." It's understandable that they'd want to give gifts to the grandchildren, but they don't have to spend lots of money on lavish gifts.
Ramsey has a friend who goes to the dollar store and buys 10 things for the kids and he's always a huge hit. The kids don't need expensive video games and toys. They're often happy playing with the box the thing came in. Give smaller gifts and maybe use the money that they're not spending to start saving for retirement.
My dad just retired at 65 and my mom is still working. Money has always been tight for them, and I don't know their savings situation. Is it OK for me to ask? And is it too late for them to start a program?
Spence from South Dakota
A: It's never too late to start working on a program. You're not done till you quit. One of the main problems here is long-term care insurance. Long-term care insurance could make or break a couple like this. One of them could fall ill, and all of the sudden, the hospital bills start piling up, income slows to a trickle, and they're in big trouble. A sickness or injury is the quickest way to crack and scramble any tiny nest egg they have. Before it comes to that, it's time to cut back: eat rice and beans instead of steak for a little while and save that money.
Retired is not an age, it's a financial situation. Just because dad retired from that boring office job doesn't mean he should be out fishing everyday. Do something to generate some income. A lot of people have energy and great ideas.
Now is their chance to use their ideas to help support themselves, start a small business. Maybe grandma should start selling those pies that everybody loves or grandpa should clean out the attic and list everything on eBay, and then clean out other people's attics for them and list that on eBay. Do something to generate some income. All of the sudden, they're having fun and they don't need their kids to take them in.