1. What is your financial status?
If you are in the early stages of your career and living independently, you probably won’t have much money to spare, but if you are professionally established, you will have more disposable income. The extent of your spare income should decide the financial support you offer to your parents. If you are forced to take loans to achieve all your goals, you will end up like your parents seeking support from your children. So, ensure that you first take care of your own retirement before you agree to help them. However, instead of blatantly refusing to help them, you could offer alternatives. These could include managing their finances more efficiently to generate more income, either by investing in better instruments or monetising unused assets. You could cover them under your employer’s health insurance to relieve them of their medical expenses.
2. What is your parents’ financial condition?
Are your parents facing genuine financial stress because they have exhausted their funds in raising you and enhancing your career, or are they simply seeking a better lifestyle at your expense? If it is the former, you should try to help them in every way possible as long as you are not falling in a debt trap. If, however, it is the latter, do not offer money without first securing your own finances. Even if you have to refuse at the cost of upsetting your parents in the short term, do so.
3. What help do they want?
The type of financial aid your parents need will determine how you support them. If they require help with their daily household expenses, you may need to alter your budget to create provision for another outgo. If, on the other hand, it is a one-time big expense, you may have to dip into your savings or even take a loan. In such cases, it is better to hand over this amount as a gift instead of giving it as a loan. Make sure, however, that you have the ability to repay the loan if you take one.
4. Have other siblings been involved?
If you are not an only child, but your parents have singled you out for help, it may be a better idea to involve the other siblings. Have a family meeting and come to an arrangement whereby the financial support needed by your parents can be shared equally, instead of you taking on the entire burden. It is also better to have written agreements about the shared financial transactions involving other siblings.
5. Are you married?
If you are married and your parents ask for hep, it may be better to involve your spouse in all the decisions. If you help your parents secretly or against the wishes of your spouse, it will upset your family life as well as your finances. So rope in the spouse before helping parents.
If you have a wealth whine, write to us…
All of us have been in a financial dilemma when it comes to relationships. How do you say no to a friend who wants you to invest in his new business venture? Should you take a loan from your married brother? Are you concerned about your wife’s impulse buying? If you have any such concerns that are hard to resolve, write to us at etwealth@timesgroup.com with ‘Wealth Whines’ as the subject.
Disclaimer
The advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.
