• Saturday, March 02, 2024
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BusinessDay

Helping your parents navigate their finances

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For most people what they are today can probably be attributed to their parents. They raised you, loved you, taught you right from wrong (hopefully), and introduced you to so many things in life and expose you to so many opportunities. And maybe they even taught you one or two things about finances when you were a kid.

So what happens when you find out that the people who taught you right from your childhood down the aisle at your wedding haven’t saved enough for retirement? How can you help your parents without hindering your own finances?  Here are ideas that can assist you in helping your parents to navigate their retirement:

Experts say, you need to make your position clear, if your parents are coming to you for help, they may have certain expectations. Before agreeing to anything, sit down with your spouse if you’re married, and decide how best you can help them without risking your own finances, though some men may go against this idea or some people may say why they would need to discuss about their own personal finance with their spouse before giving money to their father or mother even siblings, fine! If that is your perception. The most important thing is that you need to do your financial calculation first, before giving out any kobo to anybody which will definitely help you in your household budget. After you’ve settled on a course of action, clearly communicate to your parents exactly how much you’ll be able to give out. Make sure to establish the ground rules from day one to avoid misunderstandings down the road.

Also, if you think you have extra money to prop up your parents’ post-retirement lifestyle, first, consider your own family’s needs. Have you paid off your own debts? Do you have an emergency fund? Are you saving enough for retirement? How much do you have saved to put your children through college? You should have your own household’s financial ducks in a row before you consider helping anyone else so that you don’t Put Your Own Household in Jeopardy.

You can as well help them set up a Budget, while your parents may only be hoping for monetary assistance, you should start by helping them set up a budget and how to stick to it. It’s often easier for an outsider to look objectively at expenses and see where money can be saved, so walk through their monthly budget with them to see what cost-cutting options your parents may have overlooked.

Giving them a credit card may seem like the easiest solution, but it could also be the most harmful. If overspending occurs, it’s your financial well-being on the line. If you complain it may put extra strain on your relationship.

In all likelihood, they spent lots of time, money, and energy on helping you become who you are today. Be generous as you can and don’t expect anything in return.

Mind you, don’t stop saving for your retirement too, which is very important. Make sure to keep setting aside as much as you can for your retirement, even while you help your parents through theirs. While the immediacy of your parents’ financial troubles may seem like the most urgent matter at hand, you can’t stop investing in your future. Otherwise, you might find yourself in a similar situation down the road. So if you have a hard time saving for your retirement, do it for your children’s sake. Someday, they’ll thank you.

By:  Tiamiyu Adio