The Vault with Financielle - Should My Husband Stop Lending Money to His Parents? | The Vault Episode 20

Episode Date: July 10, 2024

Send us a textIn this episode of The Vault, we discuss whether or not airport money is ‘real money’ (🚨SPOILER ALERT🚨 ...it’s not 👀), before diving into our listener dilemmas:- Should my husband stop lending his parents money?- We can’t pay the inheritance taxWe also celebrate a fabulous community win. 🏆 If you’d like to share your money win, head to the community in the Financielle app or email [e-mail] your (totally anonymous) money dilemmas to [e-mail] and we may feature yours on a future episode 💌Chapters:00:00:00 - Airport Money: It's Not Real Money!00:03:31 - Buying a Chanel Handbag in New York00:06:56 - Snacks and Food on the Plane00:10:26 - Buffet Breakfast Dilemma00:13:40 - The Complex Relationship with Family Finances00:16:43 - Borrowing Money from Family and Friends00:19:38 - Celebrating Positive Net Worth and Financial Progress00:22:40 - Dealing with Inheritance Tax and Property Ownership00:25:48 - Running Mum's CafeThe Vault is an entertaining yet thought provoking podcast that answers our community’s dilemmas and confessions surrounding women and money.Visit https://www.financielle.com to download our app.Watch the podcast on YouTube.Follow Financielle for more:▶︎ TikTok▶︎ InstagramAbout Financielle:Financielle is a female focussed finance app helping women to take back control of their money, ditch debt, increase savings and invest in their future.Recorded and Produced by Liverpool Podcast Studios▶︎ Web ▶︎ Instagram▶︎ LinkedIn

i'm here for this outfit look at it tonal like cozy cheek yeah i've been training my feet all winter to grip onto my birkenstock clogs and it's finally time welcome to the vault with financial This is a safe space where we talk all things life and money and no topics are off limits. It's holiday season and I've got a controversial opinion. Airport money is not real money. True. Everyone agrees this is not controversial. We're all on team. What is it about about airport money the minute you walk through security you just like take my money i will pay three pound for a bottle of water i will pay like 12 pound for a practice i don't know what you're talking about like i feel like it's very real and i get very upset about all the prices you don't like buy maltesers for five pounds a pack

and no i turn into my dad i like, bloody ridiculous. Dad should be paying. That's the repairer's pay. Is that not true? I was thinking about this this weekend. I was thinking when you get a bus or a train, you don't have a duty free. Like there isn't. You should.

I mean, don't get me wrong. On lots of occasions, you may mentally think it's kind of saved you or helped you out because it could be a longer journey. But some of these journeys we're talking about, if we're going to the continent, you're not going, this is not a long time. So even the idea, I mean, God, last time I read a magazine with kids, so I can't even say that.

But the idea that you go through security and then go to the traffic centre. It's just so, and so like I said, tax free traffic center, tax free traffic center. The prices are higher. No one's looking at tax free either.

Like it's surely that's, I don't look at prices. It's fake money. So I don't, I don't even think, Oh, that's a good deal. So I,

I would know I wouldn't really buy anything from the shops. Usually I've got all the kids, all the bags and I want a base and I don't really buy anything from the shops usually I've got all the kids all the bags and I want a base and I don't want to miss a plane so I'm heads down but then when it comes to

food airport money is not real yeah yeah whatever goes I'm not checking a price nice glass of champagne nice pasta dish

or a nice little pret but it's like a five course pret it's not a I'll get a sandwich and a drink it's a nuts five course pret it's not a I'll get a sandwich and a drink it's a nuts sandwich fruit

yogurt granola do you want to get extra yeah I'll have extra yes they'll have that in the deal don't need it I need that

and I tell myself it's because of the water that I couldn't carry through so I'm coming in with my big bottle of water coming out with all these like sweets and chocolate

and crisps that was not what I went in for but I never buy clothes, coming out with all these like sweets and chocolate and crisps. That was not what I went in for. But I never buy clothes or anything. That's when people go like, oh, I love airport shopping. I'm like, no, I love airport eating. But I don't want to buy, I'm not buying a dress. I'm not here for a dress or a pair of sunglasses. If I remember correctly,

did you not buy a Chanel handbag in the airport? Yes. So I did. Take me away. Exhib yes so I did and I I did I was young and foolish at the time on my way to New York I mean I'm gonna say I saved it for it I didn't it was for my 21st birthday and I put it on a credit card she's the main character what's that you're the main character I am I am I'm so nervous did you use it in New York did you feel like

yes was it worth it but I had a vision of me going buying it in New York and I'd like I'd teed it up and we were gonna

quite an iconic present to get for your 21st birthday first of all to be in New York and secondly to go and buy a Chanel handbag but we happened to

go by London we browsed I think it was would it have been Terminal 5 brand new it was brand new at the time go and buy a Chanel handbag. But we happened to go to Ireland and we browsed. I think it was, would it have been Terminal 5? Brand new. It was brand new at the time. And they had a Chanel and we were like, we'll go and have a look. And Laura was like, that, oh, you have to buy it now.

Like, how much cheaper do you think it would have been? I can't remember because the prices were a lot less than they are now. Oh yeah, oh yeah. Yeah, yeah. And also my Chanel bag now recommended retail price is over £8,000. What?

Disclaimer, I did not pay that. No, any of that. No, no, it was under, it was probably two

and a bit. two, which is still bougie for a 21 year old. But again, credit, credit card. Yeah,

I didn't technically buy it until two years later. What do you want for your 22nd? I'm still paying off some cash to pay off the 21st present there's a show

it's not like it's cracked up to me but yeah I did walk down I remember walking down in the airport in the aeroplane aisle knocking

everyone in my bag no because you get it in the bougie box so she carried that all around America she did Vegas she did New York and she's got this

huge big Chanel shopping bag that people hold on to designer um the the shopping bag bag don't they like oh yeah take more care of that than the actual bag i i by the way i do not have it and i don't have my dust bag either so that shows you the level of respect i have not got for my bag but interesting then lydia so you do think it is real money and you get stressed about it i get so stressed wow i'm just i only go in like wh smith and pay like five pound fifty for a disappointing meal deal yeah wh smith is a shocker is an absolute shocker you know that it's like it's a shocker anyway actually yeah even normal wh even normal W8s make this. It's like inflated prices and like, I just want some fruit pastels. Yeah.

Why is it £3.59 or something for a bag? Yeah, when I go to Houston, I go to W8s with, like, an orange a bit. But yeah, airport money, everyone just gets a little bit.

Everyone's just so excited. I saw a TikTok the other day, a Canadian guy was like, what is it with you Brits as soon as you walk through security? You're like, what is it with you? There's a woman sat on the plane and she's like nine winds

in he was like we're only going to greece i'm on my holiday i deserve it treat yourself and he's like why have you all like gone psycho he was like everyone's really normal walking through security and then it's like but the flip side to that is the pre-holiday stinginess on your seats and your bags and so this is like you're willing to not sit with your friends because we're not paying for seats we're not taking we're not putting a luggage underneath we're putting it up top or we're doing whatever i'm not paying for a meal on the plane then you buy a meal on the plane everyone wants a cheat a ham and cheese toastie. And a brew.

Yeah, surely. They do. Or a beer even. Or a wine. But then I don't want to pay for it up front because that price is too expensive. That flight is too expensive. We did it the next morning. It's just me sitting,

depriving myself and crying. No, I truly believe you walk through and it's like, fake. It's a new world. It's just not real. The amount of times. You're so excited to be on holiday you're just like you'll it's fine the amount of times um i've gone on holiday and like got a full

three course meal from prep and then i don't even eat it and then it's like sat in the fridge like on holiday like i'm literally sat in greece and i'm like there's literally a press sandwich in the fridge how weird is that i'm gonna have going to have a Greek sandwich. That's seven pounds of a gear off since then. I would say you didn't eat it on the plane. What else is there to do when you're not going to? There's fear of being hungry on a plane because the food's so awful. I have a scarcity mindset with food. I hate sharing food.

I will over order. I don't want to go hungry. The idea of not having food like enough food to sustain you to grease because like be honest that's where you're going literally we're not talking long haul here we're talking but i am super grateful of the holiday sinking though because yeah that's what i use then in the airport for food and stuff and i and i think maybe you can go bougie maybe Lydia

yeah let's have a look at this travel fund and let's make sure that on the next trip to the airport maybe just try relaxing yeah

but I feel like you can't it's hard to relax if you feel like you're being duped but if it's your money and if it's like if every penny

is really needed for example because you've not got a sinking fund for it then it's like the balance going down down down down i don't see the balance going down because it's from a pot and that feels a lot better i can imagine it just feels stressful i just i hate that you're trapped they just take it it's like at festivals or whatever they're just like you're making you're

just taking advantage that i'm trapped in here yeah it is absolutely ridiculous there like i said i'm like this water thing this liquid thing was this it's like yeah it is absolutely ridiculous like I said I'm like this water thing this liquid thing was this it's changing it's changing it depends Manchester behind

shock of my life next to you Manchester airport shocking yeah do people take the pre-made

sandwiches on a plane that's kind of psycho isn't it you take a packed lunch needed this time sorry did you do that that's kind of psycho isn't it you take a pat lunch we did this time I'm sorry did you do that

I knew we've never done it before never done it before and I'm so glad we did but yeah it's a good idea at the gate

I wanted to open mine so I was like in the security queue like have you done the food yet or like because then no it's for the plane so I food isn't the security queue like have you ordered the food yet or like because then no it's for the plane

so I food isn't usually great on the plane and so the fact that you can have your own like crisps and sandwiches and I would do it again it was worth it

you can make yourself like a bougie sandwich that you would literally pay seven pounds more in prep I remember because I'm gluten free so I really struggle

to get anything on a plane that's of any substance. And when we were flying back from Spain, I was like, I'm going to make a sandwich. So if you imagine it was a five-star hotel, amazing luxury buffet lunch. So I was getting like Serrano ham.

I made the bougiest sandwich. If I'd have made that sandwich, it might have been about 40 quid four types of ham like the cheeses like grilled chargrilled peppers

pesto like on a on a gluten free big sourdough thing and I took it on the plane home and I was so glad I did that's a really good idea so that's a hack for you all

one time we took a gear us home what? no we were there he was like can you bring took a gear us home what no we were there he was like can you bring me a gear us home

we were like yeah that's the strangest thing I know was it safe I don't know he has no standards he's still here

he has no standards I also leading on to the holiday thing and like making the sandwiches and what not I do take a Tupperware on holiday for what

for the buffet for the kids for buffet breakfast oh really to feed the kids because the minute you walk out like making the sandwiches and whatnot, I do take a Tupperware on holiday. For what? For the buffet breakfast. Oh, really? To feed the kids. Because the minute you walk out the breakfast hall two minutes late, it's like, I'm hungry. But there's this like beautiful arrangement of foods that they like walked past and didn't have. They had, I don't know, like Nesquik or something

for the breakfast. Yeah, they just want to go in the pool and then they want they want the good stuff so i would always take a tupperware i was always wrapping up bread rolls and napkins literally that but take a tupperware just be bold with it like i think if you come around with a tupperware and you're just like so we have some people that we went on holiday with loads of families went away to the same place and some of you listen to this podcast so some of you missed breakfast and i cannot comprehend i know you're talking about families that if the kids are still which i've done firstly great that the kids lie in because wonderful well great for you secondly the stress of you've paid for breakfast and like

do you want me to bring you some this like next time if this happens i might take an extra tupperware for them and be like, what's your pre-order? Because we've paid for this. Yeah, they were quite relaxed. They were just like. Because then, if you're going down to the pool at like 11,

what are you eating? Can you last till lunch? Like what? Yeah. I am hungry for them. I did my first ever all-inclusive holiday last year. Oh God.

You survived. And Alex was like, yeah, we don't need God. He survived. And Alex was like, yeah, we don't need to get up for breakfast. I was like, excuse me? I was like, I'll be the first there. We have paid for everything. Oh no. I want the nicest things.

They're going to like run out of Nutella or something. Do you know what I mean? You've got a backpack lined with plastic. It is expensive. I've never experienced that before. It was a sensation. It's also the crazy combinations that you see people having as well in an all inclusive

sausages, waffles and Nutella maple syrup pancakes with a melon on the side all mixing when I went to Hong Kong I think I literally had dim sum and baked beans oh my god dim sum for breakfast obviously i'm gonna have heinz beans and uh sausages noodles yeah that's incredible holiday money holiday money hot airport money all pretend the way you feel better about it is plan a little bit and take a tupperware yeah yeah i like it okay dilemma time should my husband stop lending his parents money my husband has lent a substantial amount of money

amounting to thousands to his parents on several occasions they always claim it's to cover bills so he feels obligated to help to their credit they do eventually repay us but not before spending money on outings to coffee shops restaurants and unnecessary purchases should he continue lending them money or is it time to tell them they need to become financially independent and curb their spending imagine you imagine you telling your parents you need to become financially responsible and curb your spending you can't even imagine that conversation happening in that way but they need to get the money shit together yeah really they cannot be relying on the sun and it's usually the way around should we say this is a unique one because usually it's the parents being like i'm having to

like sub my kids yeah bank of mom and dad absolutely so when it's the other way around it feels worse because the roles are reversed and usually you're so reliant on your parents but to have your parents reliant on you to close the gaps every month oh yeah and when you're married as well like that's your new family so money that is in the family it's for the family if you've got children it's for the children if not it's it's for you too so there's this really interesting um it's complex it's complex because like your parents have helped raise you and look after you and you know

probably spent a lot of money on you but you do have to look after yourself so the idea is also your in-laws you know obviously

she's the one that's written in you know yeah is he not finding it a problem is he just like yeah it's fine subbing mum and dad

maybe and she's like in the, not very happy about it. Either way, it's not good. You can only do this for so long. How long do people rely on friends and family to... It's a line of credit. Yeah. There's a difference between being also reckless with your spending

and not spending what you've got and there being a bit of a gap and um i think it's really important for people listening to this to think that through picture two different scenarios you've got one scenario where mum and dad um have high expenses and but they're not frivolous it is the cost of living struck other expenses that come up maybe poor mismanagement in the past but they've got to a point where they're like they're just they struggle every month and so whenever anything big happens they they've struggled and then you could have a scenario where son and wife are in a really good place financially they've got cushions they've got access to emergency emergency cash and so there's one scenario here which is we should

be helping parents maybe we should be helping them by giving them money like after all they've given us back like that's a lovely thing to be able to do that the other end is they've using their son and his wife's not just son as a line of credit like what you know constantly not managing money every time they want something new they kind of borrow the money they pay it back we've not got an issue of unpaid debts there could be a scenario where they don't end up paying it back you know in in the future but for now they are doing it so it's kind of just more of a it's it's it's a behavioral thing isn't it a bit she's like I'm gonna min it like they're just are they just gonna expect this now yeah why should we keep doing it what you know it could be holding them back from doing something financially because it's just not a good vibe to borrow money between family members consistently

as well there's always a one like there will be a one-off in life where i might have to go to my family for money and i know that i'll get it because it's not that i'm relying on it i'm i'm mismanaged my money but some people literally just use it that like they just use it as a way of getting through life and i think it's a habit that needs breaking um i don't know she a financial community member she's she might be this might irk her more because she's like it's not how it's supposed to work whereas other people it's very normal to lend money to family and friends every month yeah like back in the day yeah oh no definitely people survived didn't they yeah yeah and and the problem is is you want to be able to help. And, you know, we don't know what reasons things, money needs to be lent for. If it's consistently, it doesn't sound like it's a sticky situation.

But it's your in-laws, that's what you're going to do. And then if you do decide like, okay, this is our family, like they've treated us so well, done so much for us. Like let's budget for that money like that's going to go to them yeah what do you do about like if she's got parents that are like in a similar situation but don't ask for money what you doing that like do you then have to budget for both yeah keep it equal or does no one have to know like that's why it completely depends on your own situation i feel like um you know it'd be great for us all to get to situations where financially we have everything and more covered and and we have lots of people that get to that point and it's such a blessing then the idea that you wouldn't lend

money but if for example there's a shortfall in his parents budget every single month and or hers you don't even have to even it up i think i think it's all about giving tail like if you've got um a really good relationship they're really helpful that they've always helped they've helped with children maybe they've helped you there's there's a point where there's a gap in in in their budget and that's why they're always having to lend money what a lovely thing to be able to help to provide for them tiny bit of income no judgment just and it doesn't have to be evened up because that life isn't all about that sometimes um but but i always think if it feels right it probably is right your gut is so good on stuff like this so if it feels like they're in the right place and they're doing the right things but there's a bit of a a gap then see if you can come to range where actually

you just help them out regularly it's a little bit of a top up of income i'm not recommending that i'm just saying that might feel like the right thing to do it's happening anyway yeah why are we messing around with shift the feelings it sounds like it's not it sounds like they they're using it to live a nicer lifestyle and that's just not going to live in the living beyond the means yeah so for them they need to learn how to manage it how you broach it. I don't know. Imagine asking your children for money every month to try and, you know, like, you've been in a position of, like, responsibility for all those years and then the coin's flipped.

Well, some people aren't bothered, are they, to ask to borrow money? You know, like, it would really kill me to go and ask someone, can I borrow money? But other people, it's just like, can I lend some money? Like, and lots of money as well. I've known family members lend a lot of money to other family members and just got us one-offs as well just as a habitual yeah yeah it was just a thing it was accepted yeah i feel like definitely if anyone's listening

to this and that happens to them share with us like how does it make you feel if someone asks you for money have you been in a position where you have to borrow money and and what does that feel like because it's the family and friend thing where possible we should just not do it it's it's put so much stress and strain on relationship there shouldn't be money swapping hands where possible and it should be like a massive place of necessity so if you've been there let us know what it's like yeah this is a really good community one I've just finished my bi-weekly budget and tracking my net worth for the first time ever I have a positive net worth I'm so excited to see it grow as I increase my savings and pay

off my student debt fantastic I saw this graph it's very pretty oh did you yeah yeah that's a good thing about a lot of people don't do the net worth because they think it's just for rich people and it so isn't. It's your tracker. It's the journey that you're going down. And when you pay down debt, that graph goes up. You don't have to have investments building. You don't have to have savings building. No, no.

And the idea that someone that's so common that you start off with a negative, which is real smack in the face when you do that calculation and you realize that actually you owe more than you own. But that's quite a humbling moment to be like, I at least want to break even that the same as I owe is the same as I have. And that's where she's got like past that point and into a plus. And it starts small and you've got a 1000 net worth,'ve got 2000 you've got a 10 000 and then eventually you know you will be on the path to much much bigger figures and and high net worth um equal stability like even if yours is different to mine as long as it like the as long as that gap grows the amount you have and the direction that it's moving in like laura said it's not about the value it's like the

trajectory of it like where is it going to every month since I started financial my net worth has grown because I've followed you know

good money habits and what not sometimes it's not about the number but the fact that she's gone from she's tracked it and even when she was minus

because loads of people just go I'm just not going to track it because I don't want to see it because it's going to hurt where you can see and then you'll wish that you could

yeah then you can see where you come from so now her progress up here she started down here it's just going to look it's going to look amazing it already does I've seen it

but I can't wait to see what it's like in 12 months time very exciting if you'd like to send your community win then head to the community in the app or email it to

thevault atfinancial.com. Okay, this is a hefty dilemma. You can't pay the inheritance tax. Hi there, I've been a financial community member for a while now and I'd love to get your perspective on this. I'm one of three siblings who have recently lost our mum. She was a widow and left no will, but she wanted us to all have equal shares in her property. But we're currently struggling to figure out how to pay the inheritance tax. Our mum owned a cafe and owned the building,

which is worth 450,000 pounds. We've been trying to keep the cafe running as a family business. My sister lived with our mum in the family home where she is comfortable. This house, although quite run down, is valued between 300 and 400,000 pounds. our brother and his family have lived in a property my mum owned rent free for the past 10 years this property is valued at approximately 250 000 pounds

both my sister and my brother wish to continue living in their respective homes we are quite worried because none of us have the funds to pay the inheritance tax how do we go about this firstly three siblings losing their mum like what she's kind of blessed them with assets that's a wonderful i know one thing i'd say is she's doing really well definitely and obviously she was widowed so they've also lost the dad so what a lot to juggle as it sounds like she's the organiser. I bet she's the eldest. Yeah. Definitely.

Yeah. So maybe the eldest. Well done. We're the youngest. Sorry that you're having to sort everyone else's life out. We're the youngest siblings. But so the, I mean, when some of this comes into probate and how it works in the UK and so if it's different to where you're from,

the high level more is the inheritance tax you get some allowances and so when you are having someone who's dealing with your mum's estate and it will be a probate lawyer and honestly like you should at that level of estate you should be seeing a lawyer about this um but there's certain allowances we get so we kind of get 325 000 pounds per person When you're passing the residence as part of that, it ups to £500,000. And you also, if it was dad that passed away before mum, then you'll get his allowances as well. So there could be a situation here where they actually get a million pounds allowance, where they don't pay tax. We've said this before, only 5% of people pay inheritance tax in the UK because of these really big allowances. And so don't stress firstly, because you'll be able to

see a lawyer and see where you get up to. So then you then pay at the moment, the rate's 40% of inheritance tax, but it's over and above that million. And for the value she was talking about, you're up there. And so on that basis, you need to look at like what the value of the estate is divided by three and everything that's over and above a million would be taxed at 40% and you have to all come up with a way to pay it. Now, just because people want to stay in houses that they've lived in doesn't mean there's an entitlement to, because it was your mum's property. It wasn't theirs and it forms part of the estate. And so it may be that if people want to stay in those homes, they get a mortgage on the homes to cover the amount. It

might even be a loan at that level. And again, we'd never advocate taking out loans, but this is a situation where you want to stay in that house and you've got an asset. So it's kind of like a mortgage. And so explore that, understand from the lawyer how much tax is going to be paid per person and what do those people have to do to kind of get that out the property? Because if they can't, they'd have to sell the property. You don't have a right to stay in a home. As far as I'm aware, all the allowances I've ever seen, you don't get to say, but it's my home, can I stay in it and not pay inheritance tax?

You have to find a way to pay it. So I think you definitely need to take advice on that bit and come up to a solution between siblings. The interesting one, though, what do you think about, what does she say about the cafe business? Because there's the freehold. Yeah, so the mum owned a cafe and owned the building as well, which is worth about £450,000.

And they've been trying to keep the cafe running as a family business. Do you think there's pressure there to do that? She's saying trying to keep it running. I feel like it's also really important we don't feel pressured to run mum's cafe. It's different if it's your thing and you were part of it.

Do you agree? Yeah, if you weren't in the decision making part of that. If it was just a pipe dream from the mum that like, oh, we'll keep it in the family or you feel guilt like a lot of people feel guilt when family members pass away that they need to keep the spirit alive by taking on certain tasks that that person was doing or a business that they built not letting it go because so much judgment isn't around family businesses that get passed down and then they're not there one day and everyone's like oh the sun ran into the ground like you've heard that that type of terminology before so i think trying to avoid that but i feel like we've spoken to a few community members whereby

certain family members are living in certain properties of the people who've died and obviously they don't want to move they've created a very like not cushy life for themselves they might pay rent to the family member or whatever but trying to remove a family member from a home is always going to get someone's back up with the business if that's an option and to kind of park it and like leave it as the mum's legacy i mean i can't imagine having to run her business when she just passed away as well like unless it was something that they're really invested in um I think selling the business is an option as well because we've not talked about the value of the business we talked about the value of the freehold and yes again whilst there's inheritance tax but that the business

could be worth the enough cash to pay pay the inheritance. There's value in a business. And that's the mathematical answer. But yeah, the more sensitive answer is don't feel pressured to do something or run a business just because your mum did because we're all our own people. And it could be the making of you and it could be growing into something really wonderful. But if it's not, then don't feel pressured to do it.

But that could help with cash so any final words i feel like families and money this episode has been about families and money and i just would recommend people talk about it a bit more and i also feel like the more you have your financial shit together it helps make those more delicate conversations much easier because people aren't desperate people aren't in in they've got cash if they need to pay for things like inheritance tax which like as i've said minority of people actually end up paying um but also making sure that when you're navigating situations like that a financial advisor or a um a lawyer and or both in this scenario

just like you're dealing with a lot of money and i think lots of people especially if you're not from money or you're not used to that amount feel like it's a lot to pay for but it's the advice is to help you know optimize that scenario and then you're paying for an expert to come in and it can they can take away the emotional side of it as well which is like invaluable that's all for this episode the vault is now closed just a quick disclaimer the vault is just a chat around life and money topics and we are not giving financial advice