Ask:
Okay, my dh and I have been working on paying down credit cards and saving. However, it seems like it's always one thing or another. Just when I get our savings at a decent amount, at least $1000, something has to be replaced. In the past 6 months we've replaced our stove, washer, dryer, dh's truck, and our heating and air unit(it's one unit). All but the air unit we paid cash for.
Also we live in a hundred year old farm house that we've been renovating for the past seven years. We've been trying to do it ourselves, but the time has come for it to be finished. I have plastic covering broken windows, I have unfinished paint splattered hard wood floors, I have walls that are uneven and have holes (they are not sheetrocked they are hard wood walls and ceilings.
Anyway, here's my question. My grandmother has a money cd that has mine and her name on it. Right now she is using the interest, among the interest from others, to live off of. The cd is willed to me upon her death. Would it be awful to ask her for the cd when it becomes mature, in exchange for us paying her five percent on the money indefinately. She is currently making only 2% interest on the cd. The money would allow us to renovate our house, pay off all our debt and put a large amount into savings. All in exchange for a $300 a month payment.
Is this something I should do? THere's no guarantee she'll agree to it, but should I even ask? She'll be 88 this year.
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Interesting, the sermon in church last Sunday was very similar to your situation. It was the story of the prodigal son where the younger son asks his father for his share of the inheritance, etc. While you're definately NOT a prodigal son, the situation is similar in that you would both be asking for your inheritance early. The priest explained the story in detail and said when the prodigal son asked his father for the money it was as though the son was saying, "I wish you were dead."
My feeling is your grandma will be able to get a better interest rate when the CD comes due. If you talk to her about any of it, she might consider breaking up the dollar amount and laddering the CD so sections of the money come due at different times. She's probably keeping the CD as a lump sum in hopes that will get her a better interest rate - and a fatter check. However, laddering CD with smaller amounts will give her the opportunity to take advantage of better interest rates or soften the plunge when rates fall.
My recommendation is that you don't ask for the CD. You're already in debt and your situation is not as secure as a bank. Plus you're planning on spending the money, not saving it. Your grandmother really might need that money later. She's only 88! She could live much longer. A recent study demonstrated that once a person reaches the age of 65 they have a very high likelihood of making it to 100. You could be paying that $300 a month for over a decade (over $43K in 12 years). Plus your grandmother won't be able to take advantage of HIGHER interest rates during that time because you liquidated the money.
Beef up your emergency fund and stop charging to the credit cards. That is the only way they will get paid off.
Cookie, That is the same story I had this week in the Sunday School class I teach at Church!
Wintermommy, No I would not ask your grandmother for the CD and follow Cookie2s advice!
I wouldn't ask, either. What if you are in a situation where the $300 wasn't possible to pay her each month? She would probably make more in an annuity, but I guess she hasn't asked you for that advice. I would leave the money there. Cookie is right - asking for your inheritance early is too touchy and just not worth the feelings it would start.
I wouldn't ask. If anything, I would go to the bank and see about getting a home equity loan or home improvement loan if you REALLY want to finish the house.
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That's a tough one. Does she know your money situation? I just thought that if she did, she might offer it to you when it matures.
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I wouldn't but that's just me. Even though she would benefit by geting more interest, it just somehow seems rude to say, even though you're not dead yet can I have the money I'm supposed to get when you die? (I know you wouldn't say it this way...but it's basically what you'd be saying) I just can't think of any nice way of saying that. But that's just my opinion.
Answer:
Originally Posted by Cookie2
Interesting, the sermon in church last Sunday was very similar to your situation. It was the story of the prodigal son where the younger son asks his father for his share of the inheritance, etc. While you're definately NOT a prodigal son, the situation is similar in that you would both be asking for your inheritance early. The priest explained the story in detail and said when the prodigal son asked his father for the money it was as though the son was saying, "I wish you were dead."
My feeling is your grandma will be able to get a better interest rate when the CD comes due. If you talk to her about any of it, she might consider breaking up the dollar amount and laddering the CD so sections of the money come due at different times. She's probably keeping the CD as a lump sum in hopes that will get her a better interest rate - and a fatter check. However, laddering CD with smaller amounts will give her the opportunity to take advantage of better interest rates or soften the plunge when rates fall.
My recommendation is that you don't ask for the CD. You're already in debt and your situation is not as secure as a bank. Plus you're planning on spending the money, not saving it. Your grandmother really might need that money later. She's only 88! She could live much longer. A recent study demonstrated that once a person reaches the age of 65 they have a very high likelihood of making it to 100. You could be paying that $300 a month for over a decade (over $43K in 12 years). Plus your grandmother won't be able to take advantage of HIGHER interest rates during that time because you liquidated the money.
Beef up your emergency fund and stop charging to the credit cards. That is the only way they will get paid off.
Cookie, That is the same story I had this week in the Sunday School class I teach at Church!
Wintermommy, No I would not ask your grandmother for the CD and follow Cookie2s advice!
I wouldn't ask, either. What if you are in a situation where the $300 wasn't possible to pay her each month? She would probably make more in an annuity, but I guess she hasn't asked you for that advice. I would leave the money there. Cookie is right - asking for your inheritance early is too touchy and just not worth the feelings it would start.
I wouldn't ask. If anything, I would go to the bank and see about getting a home equity loan or home improvement loan if you REALLY want to finish the house.
Sorry, the mods were trying to merge these threads and move them to money matters and somehow the quotes all ended up in one posts. So sorry for any inconvenience or misunderstandings from this. The quotes were made by several different people although it appears it was only one person by the way it's been merged. Again...sorry.
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Thank you for your posts. It's given something to think about. I have tried to talk to her about spreading the money into other cds and even into putting the money into a different bank. She refuses-"because she doesn't know much about those things". I was planning on putting at least half the money in a money market account or cd. I wasn't going to spend it all.
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I wouldn't ask for something like that. If I were in a desperate situation and I was going to lose my home, maybe.
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Originally Posted by treehugger
I wouldn't ask for something like that. If I were in a desperate situation and I was going to lose my home, maybe.
ITA! I certainly wouldn't ask to do renovations...maybe if I were in dire straits and were going to lose my house...
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Originally Posted by treehugger
I wouldn't ask for something like that. If I were in a desperate situation and I was going to lose my home, maybe.
I agree. I've never asked any of my family members for money. I'd have to almost be to the point of living under a bridge before asking.
I guess it just depends on the family. I know people who ask their family members for money and neither party has a problem with it.
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Originally Posted by writermommy4
. I have tried to talk to her about spreading the money into other cds and even into putting the money into a different bank. She refuses-"because she doesn't know much about those things". I was planning on putting at least half the money in a money market account or cd. I wasn't going to spend it all.
See...I wouldn't even do that. Since you're the beneficiary of her estate I think any time you are prompting her about what to do with her money, it sounds like you're really interested in your benefit instead of hers. Just let her do what she wants with her money and someday it will be yours. JMO