One of the best things about visiting the relatives is all the sweet sweet gossip about people I don’t really know.
Here’s a cautionary tale about money, weddings, relatives, and 12 months same as cash. My FIL shared it on the long car ride back to the airport.
Cast of characters:
John: DH’s relative
Marsha: John’s fiance (now wife and former childhood sweetheart)
George and Martha: Marsha’s parents
FIL: DH’s dad
John and Marsha graduated college (with debt loads) and decided to get married. Martha was delighted because she had always dreamed of having a fairytale ceremony for her daughter, even though, as a checkout person at a big box store, Martha expected John to pay for that dream (this is an entirely other story, but Marsha says that if she ever divorces John she will never get married again because the first wedding was so stressful).
The one thing that George and Martha said they would pay for was Marsha’s fairy-tale wedding dress. We don’t know the exact numbers, but it was a great deal more expensive than my $200 prom dress. John and Marsha bought it under 12 months same as cash with a 24% interest rate after that. Not reading the fine print, they didn’t realize the rate was retroactive if the dress was not paid off in that time frame. But, they figured the interest rate wouldn’t matter because George and Martha were going to pay the bill in full as soon as it was due.
FIL suggested that John and Marsha pay the monthly installments on the bill directly to the company, even without the interest, so that it would be all paid off within a year. Then they could just take George and Martha’s money for the dress and put it in a savings account at the 12 month mark. (I piped up here and said, they could even just pay it into a directed savings account so they would have that lump sum at the 12 month mark, FIL agreed that would have been fine too).
Well, you can probably guess what happened. George and Martha didn’t have the full amount for the dress at the 12 month mark. John and Marsha didn’t either, because it hadn’t occurred to them that Marsha’s parents wouldn’t have the money on time. The 24% interest rate kicked in and they were on the hook for a lot more money than they had planned (and it took a while for John to figure out why they were being charged retroactively).
George and Martha eventually did send the check for the original amount, but John and Marsha could have bought an entirely new prom dress and more with the amount of interest they had to foot themselves.
Now maybe George and Martha wouldn’t have actually paid for the dress if John and Marsha had paid the bill first, so maybe that behavior was optimal and the extra money was just the cost of commitment to the relatives. But it’s still a good idea to have a large enough emergency fund to cover for when other folks, especially relatives, don’t get their payments in on time.
Additionally, always read the fine print and be very careful with anything that is “X days same as cash.” Companies lose less money than one would think on those deals.
And that’s a cautionary tale from my FIL.
My FIL also wishes us all to know (courtesy of an entirely different relative) that if you don’t show up to work, it is difficult to keep a minimum wage job.
Do you have any fun bits of wisdom you’ve picked up through family? Any good gossip? Ever had a problem with folks not following through on a monetary promise? Someone else force their wedding preferences on you?