(Money Magazine) -- Getting old brings a host of changes. Achy knees. Way more time to play bridge. And, occasionally, the tendency to make unwise money decisions.
For example, Mom insists on keeping the obscenely expensive membership to a country club she can't afford and never visits, or Dad digs into his retirement stash to shower diamonds and vacations on a girlfriend half his age. You're left watching your inheritance dwindle even as you struggle to pay your kids' tuition.
The direct approach -- asking your parent to stop spending like Donald Trump, already -- is likely to back-fire. Who wants his child telling him what to do? It will also make you look like even more of a gold digger than Dad's new squeeze.
Economists have a remedy. Years ago three of them -- B. Douglas Bernheim, Andrei Shleifer, and Lawrence H. Summers (the guy who now advises President Obama) -- wrote a now classic paper called "The Strategic Bequest Motive."
After analyzing reams of data, they concluded that bequests are really trades. People generally want something in return for making them -- namely, time and attention. For example, studies show that children who frequently call and visit their elderly parents tend to inherit larger amounts than those who don't.
So the best way to stop your folks from frittering away their money is simply to shower them with love and devotion.
|Overnight Avg Rate||Latest||Change||Last Week|
|30 yr fixed||3.90%||4.01%|
|15 yr fixed||3.01%||3.13%|
|30 yr refi||3.98%||4.12%|
|15 yr refi||3.08%||3.23%|
Today's featured rates:
Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More
Uber just raised another $1 billion in funding, which values it at nearly $51 billion. More
Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More
You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More