The right thing may be wrong

The Denver Post - - BUSINESS - By Kristi Sul­li­van Kristi Sul­li­van, CFP, is the pres­i­dent of Sul­li­van Fi­nan­cial Plan­ning LLC, a Den­ver-based Regis­tered In­vest­ment Ad­vi­sor.

Any­one who reads self-help books is fa­mil­iar with the idea that “should” is the dirty word of the 2000s. Thoughts like “I should love to ex­er­cise and be 20 pounds thin­ner,” or, “I should be a stay-at-home mom,” or “I should be a work­ing mom” drag you down and make you see your life through the lenses of oth­ers.

“Should” can be just as dan­ger­ous to your fi­nan­cial bot­tom line. Let’s look at some ex­am­ples where “should” needs to make way for com­mon sense.

“You should re­fi­nance your mort­gage to a 15-year loan.”

With to­day’s in­ter­est rates hov­er­ing near 3 per­cent for a 15-year mort­gage, ev­ery­one from ra­dio per­son­al­i­ties to your barista is telling you that you must re­fi­nance so you can pay your loan off early.

I am a huge fan of the no-mort­gage re­tire­ment. How­ever, even with a lower in­ter­est rate, a 15-year mort­gage comes with a higher pay­ment than the 30-year one you cur­rently have. What if you lose your job or have a large and un­ex­pected ex­pense? That 15-year mort­gage could come with a pay­ment that you can­not make. What if, in­stead of re­tir­ing that mort­gage early, you end up los­ing your house be­cause you are un­able to make the higher pay­ments?

How about just pay­ing twice as much on your mort­gage within the 30-year loan and di­rect­ing the ex­tra to prin­ci­pal? The ef­fect will be al­most the same. You’ll pay the mort­gage off much ear­lier than 30 years. How­ever, if you en­counter bumps along the way, you can al­ways scale back to the min­i­mum pay­ment on the 30-year loan un­til things are look­ing up again.

“You should drop ev­ery­thing to care for your ag­ing par­ents.”

I know your par­ents are great peo­ple and sac­ri­ficed a lot to raise you. How­ever, if you in­ter­rupt your ca­reer to cook, clean, bathe, at­tend med­i­cal ap­point­ments, wran­gle with in­surance com­pa­nies and other­wise act as care­giver, there are long-term reper­cus­sions.

Here are some po­ten­tial pit­falls to an in­terim ca­reer as care­giver:

• Your So­cial Se­cu­rity ben­e­fits will be lower.

• Your re­tire­ment nest egg will be smaller.

• Skills and pro­fes­sional net­works could be­come rusty and reen­try to the work­force dif­fi­cult. • Your health could suf­fer. • The re­la­tion­ship be­tween you and your care re­cip­i­ent may be­come strained.

• Your mar­riage and re­la­tion­ship with your own kids might suf­fer.

If you are think­ing that I am a cruel, money-is-ev­ery­thing fi­nan­cial per­son who would leave my par­ents out to be eaten by wolves when they be­come in­firm, don’t worry for my mom and dad. There is an­other way.

Thanks to our ag­ing pop­u­la­tion, there is a new group of pro­fes­sional care­givers in so­ci­ety. For a fee, they can help you with med­i­cal pay­ments, find­ing in-home care, nurs­ing home shop­ping, driv­ing to ap­point­ments, bill pay­ing and more. A pro­fes­sional can quickly and ef­fec­tively han­dle care­giv­ing ac­tiv­i­ties that might take you sev­eral hours. This al­lows you, beloved daugh­ter or son, to re­main gain­fully em­ployed, men­tally ful­filled and en­joy a more pleas­ant re­la­tion­ship with your par­ents.

“You should pay any amount for your child to get a good ed­u­ca­tion.”

The av­er­age young adult is grad­u­at­ing with $37,000 in debt for an un­der­grad­u­ate de­gree. Since many are grad­u­at­ing with no debt, that leaves plenty with a tab of $80,000 or more. With­out a med­i­cal or ad­vanced de­gree. Where were their par­ents when these stu­dents were mak­ings these fi­nan­cial choices? Un­for­tu­nately, they were prob­a­bly cosign­ing loans and sab­o­tag­ing their own re­tire­ments.

Lis­ten up, par­ents. If you haven’t yet learned to say “no” to your chil­dren (“No, you can’t have the lat­est iPhone,” “No, I won’t pay $200 for your blue jeans.”), start be­fore the col­lege ap­pli­ca­tion process. Ju­nior wants to at­tend Far­away Pri­vate Uni­ver­sity for an English de­gree he can get an hour from home for half the price? The an­swer is, to quote Meghan Trainor, “No.” Or, “Yes, but you have to pay for it and I’m not pay­ing off your loans be­cause if I do, I will have to move in with you be­cause I can’t af­ford my own re­tire­ment.” Some­thing like that.

Peer pres­sure wasn’t pro­duc­tive as a teenager, and it’s no bet­ter for adults. Don’t let the “shoulds” of the world stand in the way of mak­ing sound, long-term fi­nan­cial de­ci­sions that are best for you.

A Uni­ver­sity of Texas stu­dent at her grad­u­a­tion in Dal­las wears a mor­tar­board with the words “Debt free” to cel­e­brate her lack of col­lege debt. Kevin Yang, Uni­ver­sity of Texas at Dal­las file photo

Caring for ag­ing par­ents comes with many pit­falls. There is an­other an­swer to giv­ing up your ca­reer: You can pay a new group of pro­fes­sional care­givers to do the job in­stead. Think­stock

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