(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||3.95%||4.01%|
|15 yr fixed||3.10%||3.12%|
|30 yr refi||3.97%||4.04%|
|15 yr refi||3.14%||3.15%|
Today's featured rates:
"This is my worse nightmare," wrote the CEO of AsiaAir after Flight 8501 went missing on Sunday. More
According to data from Google Trends and GrubHub, Chinese food remains the most popular type of food order on Christmas. More
With rents expected to continue to rise faster than incomes, many Millennials may finally start looking to buy homes next year. What they will find are much more favorable conditions. Here's what to expect in 2015's housing market. More