Balancing your financial needs with those of your kids and retired parents
Adults in their 30s to 50s are sandwiched between the pressures of providing for their children and for their senior parents. Add to these their personal financial pressures, and the task of providing and caring for yourself and for other family members becomes very challenging.
If you are feeling the pressure to provide for your immediate family and yourself, the best ways to balance these competing interests are, first, to identify everyone’s needs and, second, to communicate these needs, your capacity to provide, and other options to help you meet the needs of those of your loved ones.
Identify personal needs
The first step in balancing your children’s, your parents’, and your financial needs should be to identify your personal needs. Assess your situation. Are your personal needs being met by your current income? Do you have at least six months worth of emergency funds? Do you have a retirement plan? Can you monitor your cash flow?
Once you have answered all of these questions, and you still have enough left over to provide for your children and aging parents, you can assess their situation and do your best to provide.
Identify kids’ needs
Having children costs a lot of money and effort. The money for your children primarily goes to their care and education. As parents, you are the main provider for all of their needs. Before helping out your parents financially, consider first your children’s needs because they would have fewer options to go to.
Some strategies to help you pay for your children’s needs include putting up a flexible spending account dedicated to paying child care and educational expenses without the money you put up being counted as taxable income. Reinvest whatever you save from the tax bills to future expenditures such as college funds.
Identify parents’ needs
Before committing to helping out your retired parents, ask them first their specific needs, their situation in life, and the options that can help them go through retirement years. Senior adults can have multiple sources of income including social security, investments, pensions, assets, and even employment income for those who has not retired yet.
Communicate openly with your parents on the status of their assets. Lend a helping hand on taking care of or managing their assets when the task gets overwhelming for them. The government also has the Medicaid program which can help senior citizens who can not afford long-term care.
Ways for others to help
Taking care of your children’s financial needs is your and your spouse’s responsibility. It is not customary for other people, like your siblings or cousins, to shoulder the burden of providing for your child’s care and education, except in extreme circumstances. Taking care of your parents, however, can be shared with your siblings.
Discuss among your siblings the best way to care for your parents. Those who have the financial capacity should have a majority share of providing for their financial needs. Those who are closest physically to them should be the ones to run errands or do chores. Communicating effectively with them can provide the ultimate care and comfort for your aging parents.