Managing your finances can be quite tough when your elderly parents are dependent on you. If you want to support someone, you have to be on a formed foot.
If you need to take on debt to take care of your parents, you will not be able to support them longer.
The first thing is to analyse your financial capacity. You must have enough resources to meet your expenses as well as your parents’ needs.
It does not make sense to financially support anybody if you do not have spare money.
Sometimes you get ready to help your loved ones even though you cannot because you do not want to spoil your relationship, but your emotions should not come in the way if you do not want to suffer from monetary problems.
Before you support anyone financially, make sure that you are capable of doing so. This blog tells how you can do it.
Create a budget
Just because you want to help your elderly parents financially does not mean that your finances are ready.
Leaving aside the love you have for them in your heart, you should look over your current finances to see how much you need to make ends meet and if any money is left with at the end is enough to help your parents financially.
This is why you should create a budget to control your finances in a better way to help your parents when they are struggling.
Having a budget can help you achieve your retirement goals while helping your elderly parents.
Before you start sending money to them, you should create a budget and check how much you need.
This will help you set the right limit that you can send to them.
Since you have your parents’ responsibility now, it becomes more important to create a budget to ensure that you are not overspending.
Discuss early before problems become too big
If you suspect that your loved ones have some financial problems, you should ask them sooner rather than later.
Do not take it casually if you want to nip it into the bud. It is not surprising that people look for solutions when they are in dire need.
It can be difficult to tackle the problem if it has become too big. Set up a time to talk to them. Make sure that they are completely comfortable talking to you about their financial condition.
Do not force them even if you know there is a problem. Try to persuade them to keep you in the loop if they need any financial help.
Let them how worse it could be if they do not share a problem with you. Tell them how it is important to deal with the problem before it becomes too big.
Try to be diplomatic because they might get upset if you straightaway get to the topic.
Create an emergency fund
While taking care of your loved ones, it becomes more crucial to have an emergency cushion. Even though you are financially strong, you should have an emergency corpus.
You can come up with an unexpected expenditure at any time, and you must have some funds set aside to meet them.
Although you can take out loans for bad credit online in case of emergency, it does not mean that you will not put aside money for a rainy day.
Experts suggest that you should save at least six months worth of your living cost, and since you are supporting your elderly parents, it should be a 12-month worth of your living expenses.
To ensure that you consistently keep contributing to your emergency corpus, you should look over your expenses.
Try to cut back on variable expenses and discretionary expenses. Whatever money you save by cutting down on your expenses should be transferred to the emergency corpus.
Before you agree to help your parents or any relatives, make sure you have already set clear boundaries.
You should have set the limit of money you can bequeath to them. Do not forget that the limit may change over time.
For instance, you have got a baby, or you have lost your job. You may need more money this time, and you will not be able to keep giving the same amount of financial help to your loved ones.
Ensure that your loved ones do not have any problem with new adjustments when your financial situation changes down the road.
Do not neglect your own needs
Supporting your elderly parents financially does not mean that you will compromise with your needs.
It may sound selfish, but you need to prioritise your needs; otherwise you will run out of money and start borrowing money. This will badly affect your finances. You will likely fall into debt.
When your elderly parents are dependent on you financially, you should take stock of your expenses. Make sure that you will have enough money to meet all of your regular needs while taking care of your loved ones.
Do not forget to include unforeseen expenses and your futuristic planned expenses like buying a car and buying a mortgage. It does not make sense to financially support someone when you are unable to make ends meet.
The bottom line
If you are to take care of your elderly parents financially, make sure that you have enough money to manage your needs along with theirs.
Although this financial support does not need to be eternal, you should still be careful about your needs. Otherwise, you will end up chasing online lenders to borrow money to fund your needs.
A rule of thumb says that you should balance yours and your loved ones’ needs. Sometimes your elderly parents may have financial problems just because they are being unable to manage money. Try to find out where the problem and fix it.
Give them a helping hand. However, before that you will have to politely ask them share their details with you. They might be awkward to discuss everything with you. Do not force them. If you approach them diplomatically, they will surely do it.
Description: If you have to support your elderly parents financially, make sure you have done your homework to see how much help bequeath to them.