I had the misfortune of losing both of my parents to cancer within a year. I moved in to care for my parents while they were on hospice and provide additional support to my brother as our parents’ health declined. Now, I’m 24 and my brother turns 18 in just a few days and I’m feeling especially anxious and unprepared. I want to make sure I’m setting him up for success.
I have legal guardianship of him, which I’m assuming ends on his birthday. He lives with me and will graduate high school this spring.
Financial: This is the area where I am in most over my head. Cancer is expensive. My father worked from his death bed up until 2 days before his death. My father’s sacrifice afforded us a mortgage free roof over our heads, so no mortgage. My brother receives a monthly social security payment, which will end in 5/6 months. I’ve tried my best to be a good steward of this money for him, but admittedly I have only just begun to force myself to become more financial literate.
Big purchases I’ve made in the last year include: our car $6k cash no car payment, house taxes $3k, driving lessons $1k, home repair $3.5k, home insurance $2k, 5-6 weeks of trips to visit family and friends including one trip internationally $8k, our pets $2k (will be partially reimbursed).
Regular expenses include: He gets a weekly allowance $30 and I probably spend $75 a week on food delivery for him. His groceries cost me less than $100 a week and the utilities, subscriptions, pest control etc run me about $1k a month. I haven’t been paying car insurance for him, but once he gets his license this will unfortunately be up to $200 a month. I spoil him throughout the year with gifts, clothes and the occasional spending money because I feel bad about our situation $4k, which included his dream gift of a PC.
Income: I am currently employed by a family friend, making $23/h which is paid in cash. However, the work dried up and I haven’t worked a 40 hour week since last spring. There were several months where I worked less than 40 hours total. I’ve been supporting myself and brother through his social security $2700, the maybe $2000 I’ve been bringing in and my ever depleting savings. I’m technically self-employed, but haven’t filed taxes since starting this arrangement back in 2023. There’s no excuse for not filing taxes other than pure avoidance brought on by my untreated adhd/depression/anxiety, but last month I finally was able to pay out of pocket ($400 appointment sadly) to get started back on my meds and plan to tackle this mess in the coming months. Fortunately or unfortunately, my poverty wages mean my taxes owed should be somewhat manageable if I just bite the bullet an do them. I know I need to increase my income significantly and find a real job with benefits. I finally built my credit back to 650 and am working on it.
Financial health: The only debt I have currently is federal student loan debt, which I need to locate and make payments towards asap (0 percent interest rate). I pay off my credit cards in full every month and have just set up auto investing using simple apps like Robinhood and Acorns to contribute $600 a month to retirement funds.
My brother’s finances: My brother has no debt. He is an additional card holder on my AMEX platinum (not an authorized user). He also has a cashapp card that he uses as a debit card. He set that card up himself. He has a bank account with BofA that we have never been able to successfully set up online banking for, but last I checked he probably has $1k. This account was set up by my dad so it has both my dad and brother listed as the account holder. Does anything happen to this account when he’s 18? Can he take my dad off and convert it to a normal account capable of mobile banking? The credit union my parents banked with sent over information about a 401k account from my parents that probably has $1k in it that he’s entitled to. I need to transfer this somewhere, I’m sure. He received a check for $10k from the credit union as well. I created an Ally bank account and deposited this there for him. The Ally account has a debit card attached but I haven’t set it up. Our parents’ life insurance was paid out, except for his portion because he was a minor at the time. I just left the money there so that he can get it himself when he’s 18, rather than having to involve the estate’s executor. It’s probably around $75k. He can also expect at least $50-60k from an asset sale next year. The will states he’s not supposed to have access to any asset sale money until 21 and the rest when he’s 25. The life insurance and money from the credit union are kind of a gray area. Our other siblings received this money before turning 21/25, however they are much more financially responsible, have at least 5 years of work experience, are career driven, and had a clear and immediate need for the money to support themselves through college. My brother doesn’t have any knowledge of this money. He’s been pretty sheltered financially in that he hasn’t ever had to hold a job, so I don’t plan on giving him this money. I’ll probably need his help to access it, but where can I park it safely after that? HYSA? I’m sure there are things that I don’t even know I don’t know yet so please let me know if I’m missing something important!
Posted by Annual-Ad2364
4 Comments
Reading all this, I’m concerned more for you than your brother.
Let’s start with the easiest thing – you have no business having and paying the annual fee on an Amex Platinum. Chat or call Amex today and get yourself product changed to the lowest annual fee card that you can get, hopefully that’s the Blue Cash Everyday with zero annual fee.
Next priority here is to have a very frank conversation with your brother and lay everything out on the table. Work through exactly where the money is going every month, and agree on what is necessary vs. what’s just nice to have. Food delivery needs to stop, and so do the random purchases. You absolutely need to keep on your medicines.
Both of you need to figure out some kind of work.
Park the incoming money in a high yield savings account somewhere and don’t touch it. Come back to that when you’ve stabilized.
Priority #1 needs to be you getting a new job that pays regularly. You need to be working full time. Even minimum wage at full time will bring you in more than you have some months at this job, and you likely can find something at higher than minimum wage. Everything else is secondary to this.
Transferring the money from BoA account to Ally account in just his name is probably easier than getting Dad’s name off the account.
Until you have income coming in and things under control, keeping everything in a HYSA is a reasonable option.
At some point soon you should consider selling the house and buying something smaller if you need to. It’s almost certainly bigger/more expensive that what you need as an individual.
I think you’re being unrealistic about what kind of lifestyle is sustainable for yourself and your sibling.
Your mortgage free house costs about $425/month ($3k taxes + 2k insurance = $5k per year).
Your utilities etc. are $1k.
That’s $1425/month for housing.
Each person’s half of that is say $710.
That leaves your brother with $1290 / mo.
Spending $175/wk on food, that’s about $750/month per person.
So, food and housing is $1460 per month per person. Then there’s transportation, repairs, clothing, medical, etc.
Neither one of you can afford your lifestyle on your current income. And his income is about to stop.
If you’re not currently using his social security for living costs, you should start now while you can. Give him the leftover cash (about $500?) each month.
He’s going to have access to the life insurance money at 18 if he’s a beneficiary of it. It would be unwise if him to withdraw it and hand it over to you, and it would be unethical for you to insist on it. That’s his money.
The best thing you can do is advise him on how to use it (college or other workforce training, perhaps). Show him how much the cost of living really is. Inheritance and asset sales can prop things up for a while, but he – and you – need to be prepared for it to end.
You should get a regular full time job. Your lack of income will catch up to you eventually as well. The problem isn’t your “poverty wages” it’s the lack of paid work hours.
So if the life insurance went to a trust, it must follow the rules of that. If it just listed everyone equally as beneficiaries – then they get the money at 18. You should ask him if he wants you to manage it for him.
Also, you need to get an above the table job right now – not an under the table cash deal. You need to work anywhere that will give you money.