Debt Killed My Dad. Learn from His Mistakes - and Mine.

Worried elderly man
According to his death certificate, my dad died of myocardial infarction, otherwise known as a heart attack.

His health had been deteriorating for some time, so it wasn't a total surprise. He gained weight and was diagnosed with Type 2 diabetes. He had two bypass surgeries -- one triple, one quadruple. It wasn't hard to understand why he had heart problems. His diet was unhealthy; he didn't get enough exercise; and he was constantly under stress.

We thought there wasn't much any of us could have done. In retrospect, there was one area where I might have been able to help, though at the time I didn't think about it in those terms. His financial health deteriorated more than his physical health, and that was one of the primary sources of stress.

It Wasn't His Heart Alone That Killed Him -- It Was His Debt

My dad racked up credit card debt faster than a NASCAR driver at Daytona, and he never could get his spending habits in check. Just as you can spot the indicators of heart trouble, there were plenty of signs something was wrong with his finances.
He took cash advances on one card to make payments on another. He took out a second mortgage just to make minimum payments on his credit cards, all of which had interest rates in the 20 percent to 30 percent range. He constantly worried about how he would scrape together enough money to pay his bills.

I saw the stress of his debt weighing on him. I have no doubt much of the reason he gained so much weight in the first place was because he was gravitating toward unhealthy comfort food to help him forget the stress, and the emotional drain from constantly worrying about money robbed him of the initiative to exercise.

One of my biggest regrets, which I shared in my book "Soldier of Finance," is that I never had the courage to confront my dad about his debt. I think somehow I believed things would just work themselves out. They didn't.

If you know someone who is struggling with debt, there are signs that you can watch for -- and things you can do. Here are three indications that they are headed for unnecessary and dangerous stress.

1. They're Constantly Fretting About How They Will Pay Bills

You can tell when it has become a problem for someone you know. For one thing, it creeps into their conversation. They begin making comments that allude to their desperation. Watch for other signs. I can remember walking into my dad's house and seeing a list of credit card debts next to his computer. It was clearly on his mind. Worry is difficult to hide.

2. They Use Credit to Pay for Credit

If someone is using one credit card to pay the minimum payment on another, or taking out a cash advance on a card to make a payment, there are multiple problems. First, making minimum payments doesn't usually reduce the balance on a card in any significant way. The lion's share goes to paying interest. By using another card to make the payment, you're only adding to your total debt, making future minimum payments even higher. It's a no-win cycle.

3. They Frequently Borrow Money -- Sometimes From You

When they ask, it always sounds like an opportunity for you to help. The loan will solve their problems and take the pressure off by allowing them to consolidate their bills into one payment, which will allow them to return your money to you. The problem is that it never works out that way.

I once loaned my dad $8,000 to help him pay off some debt. Not only did he run up new debt as fast as he paid off the old, but when he realized that he couldn't pay me back, he took out a life insurance policy with me as the beneficiary. Instead of eliminating debt, he added another monthly payment.

If a close friend or relative exhibits these symptoms, there are things you can do. Here are three suggestions to get you started:

1. Gently Confront Them With Your Concerns

Do your best to keep from sounding judgmental by emphasizing that you are concerned about the stress their financial habits put on your relationship, and more importantly, the danger to their health. It won't be easy, but if you really care about them, be honest with them.

2. Stop Enabling

When my grandmother passed away, both my dad and I inherited some money. True to form, dad wanted to borrow my share to pay off his debts and planned to pay me back in monthly installments. My girlfriend -- who later became my wife -- confronted me the way I should have confronted my dad. "It won't help him, and it won't help you," she said bluntly. She was right, and I knew it. It was the first time I ever told my dad no, and it was the hardest thing I ever had to do, but it had to be done, for his sake and for mine. Learn to say no. Don't even agree to co-sign a loan. You'll only add to the problem.

3. Offer Real Help (Not Loans)

This might be as involved as sitting down with them and helping organize bills, develop a plan for debt reduction and help them stick to it. But at the very least you can introduce them to a financial adviser to help them get things under control. Above all, offer your encouragement and support. Changing lifelong habits is never easy, but it can be done.

I wish I had spoken to my dad early on. I never did, but I believe I have learned from both of our mistakes. I hope you will, too. Don't wait or sit back silently, hoping something will change. Become an agent of change. When you see the warning signs, speak up.

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my friend's step-mother makes $87 an hour on the computer . She has been fired for six months but last month her pay was $15410 just working on the computer for a few hours. Get the facts


September 08 2014 at 7:57 AM Report abuse rate up rate down Reply

This guy is a CFP (Certified Financial Planner) . Trying to sell his book. The dad story sounds made up.

September 07 2014 at 1:30 PM Report abuse rate up rate down Reply

but Washington rewards spending and debt via the tax code and punishes saving and investment the same way. what to do?

September 03 2014 at 8:03 AM Report abuse rate up rate down Reply
In My Theory-Opinion

Good article, nothing against that, I bamkrupted twice with 13 credit cards as a private pilot for 9 years to keep on flying (had to quit in 1996). Third time around with high credit rating and clean record now, know better, scale back and budget better.

Lord have mercy on his dad.

August 30 2014 at 10:39 AM Report abuse -1 rate up rate down Reply
King Troy

Very good article. I am sorry about your father.

August 28 2014 at 2:11 PM Report abuse -2 rate up rate down Reply
Retired And Happ

The lesson to be learned here is NEVER help family/friends out financially!! It happened to me twice, once with my mother and once with my sister. I loaned $32,000 to my mom at 8% interest and didn't get it back until after my parents divorced and my dad was stuck with paying me back. As a result, my mom and I didn't speak for a long time until she was on her deathbed dying of lung cancer. With my sister I co-signed a loan for $25,000, me as the primary with the agreement she would pay back the loan. Well, she defaulted, and I ended up stuck with paying back a little over $20,000 of it back. We didn't speak for almost ten years, and it's still strained even after a recent telephone conversation.

As the saying goes, whenever you loan money to friends/family, consider it as a gift. Then you won't be disappointed when, not if, they don't pay you back.

August 28 2014 at 8:58 AM Report abuse +1 rate up rate down Reply

Unfortunately, many people have found themselves in debt through no fault of their own. I was a responsible person, paid my bills, put down 25% on my home, and had sterling credit. Then the Great Recession happened, I lost my job, could not pay my bills, could not sell my home or refinance it as it was now "underwater". Long story short, I had to walk away from my home, and default on several credit cards. Any income I had went towards putting a roof over my head and food on the table. Ultimately, I had to declare bankruptcy to get a fresh start to get the collection agencies off my back. Now I pay cash for everything, only buy what I need to survive, and drive a 13 year old car. I don't know if or when I will be able to retire. Thankfully I am reasonably good health and have once again found work, though my salary is nowhere near what it use to be.

August 27 2014 at 3:32 PM Report abuse +5 rate up rate down Reply
1 reply to RMS's comment

you can thank both parties in Washington for a manipulated economy where everything is distorted.

September 03 2014 at 8:01 AM Report abuse rate up rate down Reply

You all are assuming that the debt occurred with frivolous spending. What if the debt was due to a medical problem (paying for heath care is expensive without insurance) or from a job loss at one point? It is very hard to dig out of debt once this occurs without declaring bankruptcy. Did he buy groceries with his cards? Why are his cards having such high interest rates? I am only in agreement with solution #3. But there was an article about cutting expenses a couple of days ago in this forum. It said that you can only cut spending to a point and that increasing income has a better result to get out of debt. I suspect that your dad was in over his head and the only thing that would help would be from adding additional income AND cutting some expenses AND getting credit card consolidation to lower interest rates or declaring bankruptcy. Too bad. I can only be sympathetic, unless his spending was downright irresponsible.

August 27 2014 at 12:33 PM Report abuse rate up rate down Reply

One --- Debt did NOT kill your Dad. His own bad decisions about his personal health and his personal finances did.

Two --- Your parents are adults. Maybe they are making bad decisions, but that still does not give you the right to step in and take over their lives. If they are deep in debt, give them Dave Ramsey's book --- "Financial Peace". And that is ALL you do. No cash loans, no lectures, no treating them like little kids with your advice on how to change their lives to be more like YOU, etc.

Three --- Money consciousness is like a ladder. Most people never get beyond the first rung of the ladder --- which is viewing money as a big pile of cash that SHOULD be spent on whatever they want to spend it on. They go from one pile of cash to another (AKA known as living from one pay check to the next check). This is how they live their life. Thinking money is just there to be spent to acquire more "stuff". It's all they know. This mindset is what got your Dad deep into debt. (When he ran out of actual current available cash, he resorted to spending "future cash" that he had not yet earned --- buying on credit.)

This is how the majority of the population lives their lives. Why??? Because they never learned to look higher up on the ladder. The second ladder step is realizing that money is a tool that can be used in many different ways --- not all of which involve spending to get more stuff. You can also "spend" in a different way --- by saving and investing --- and there are many approaches to doing this.

The third step of the ladder is realizing that Debt (and its' twin brother Poverty) go hand in hand. Being in this situation is very often the result of excess spending on entertainment --- in all its' many forms. Most people think they are ENTITLED to be entertained every waking moment. And they fuel this addiction by spending constantly. Which leads to debt. Which keeps people in endless poverty. It's a vicious circle.

The fourth step on the ladder is realizing that money isn't just a pile of cash waiting to be spent. It represents freedom. Freedom which will give you more life options. Not just more stuff.

When you have climbed this high on the ladder, you start to realize that there are a lot of ways to achieve financial freedom. But, the first choice always has to be breaking the chains of spending addiction. (One way to know that you are making progress is realizing that, when you get your tax refund, your first thought isn't": "What can I buy with this extra money??" It's: "What is the best way to save and/or invest my tax refund?")

August 27 2014 at 11:59 AM Report abuse +1 rate up rate down Reply

Obama, Pelosi, Reid , the Fed,and all democrats, please take note

August 27 2014 at 11:42 AM Report abuse +1 rate up rate down Reply
2 replies to jdykbpl45's comment

Once again, you are promoting misinformation. When President Clinton left office, there was no debt, and in fact, there was a large surplus. Then, GWB took office, and the debt began to rise based on two wars, which were never paid for before President Obama took office, and uncontrolled spending. It's truly ignorant people, like yourself, who continue to vote for politicians who only care about themselves and the remaining 1%'s.

August 27 2014 at 12:23 PM Report abuse +2 rate up rate down Reply
7 replies to msw368's comment

you are correct. they are to blame. totally. but we elect them and then re-elect them. we are pretty stupid. sadly.

September 03 2014 at 8:02 AM Report abuse rate up rate down Reply