You have to think of this not as a person that is bad with money, but as an addict. It is situations like these that bankruptcy was created. Someone that cannot pay their debts goes to a judge who liquidates their nonexempt property and their debts are settled.
I also have a Chinese wife. She comes from a single mother family as her father died when she was young. They came to America and thought that everyone uses debt to live. Her mother did not speak English well so she has never had much work but she and her siblings have supported the family. She told me that in Chinese families all the money the family makes is given to the eldest of the home.
Unfortunately, they decided to buy brand new cars and a home before I started to date my current wife. They would also spend one or two thousand dollars a month on groceries and shop with abandon for clothing. Their excuse was that they are getting things on sale so they should buy lots of clothing. When I met my wife she had so many clothes that they would end up giving a way old items that she had never worn.
My first year living with my wife, she wanted to give her mother money because she could not afford her taxes. She gave her mother $8,888 for good luck. That was too much money for us to give up.
Some people become addicted to spending money. My wife's mother never bought things for her but bought them for the whole family. She wanted them to feel good and buy their love. It is pointless to give more money to people like this. It is like giving a drink to an alcoholic thinking that it will sober them up. They may be in less pain now but it is just going to come back sooner or later.
I understand the situation of Chinese families. I think it is OK to give a little money to her mother each year around Chinese New Year, but not enough that it hurts us.
The way that I explained to my wife is that if we give her mother too much money she will feel comfortable and then go out and buy things she still cannot afford. It will just make matters worse because what is going to happen is that she is going to file for bankruptcy. Not only that but since she handles all the money, her unmarried brother and sister will also file bankruptcy. The home they live in will be foreclosed and hopefully no other bank will lend to them again.
If this happened I told my wife that I would not hesitate to lend them moral support or even let them stay in our home or another home we own. Instead of being in overwhelming debt, I had no debt when I married my wife. We are paying off her student loan debt. If we are in a good position then we will be able to help our entire family be well off. They may not own their own house, buy thousands of food, or drive the fanciest car; but they will be loved and cared for like decent human beings.
Remember that boundaries must be set, but if you are in a good financial position you will be able to help and advise your wife's in-laws when the time comes.
