Posted by Mike Smith :: November 2, 2007 @ 7:03 amAt a time when many adults are struggling with their own personal finances, they may be faced with expenses from the generation before them as well as the one after.
Traditionally, parents have been financially responsible for themselves as well as their young children. With increases in life expectancy they are now finding themselves more likely to be providing for an aging parent as well. It’s not just that seniors are living longer either -- health care costs are increasing at an alarming rate. This is causing retirement savings to be used up more quickly, leaving seniors in precarious financial situations. After years of providing for their children, they may be left with few alternatives other than asking for their kids to return the favor.
If you have children and parents who are both financially dependent on you, there are some things that you can do to ease your situation.
Get Your Own Finances in Order
Whether it means following the budgeting ideas or other advice on the Lending Club blog, refinancing your credit cards with a P2P loan, or simply staying on top of your spending, you need to be in control of your own finances before you’ll be able to help others.
Kids Come First
While it may be hard to turn your parents down when they need help, you have to make sure your children’s basic needs are satisfied first. Your parents are likely partially responsible for their situation and may have to live with those consequences if you’re unable to help them. They may be able to rely on other sources of help, from siblings, the government, or their own financial reserves, but your children are completely dependent on you.
Teach Your Children Well
By teaching your kids about money, you’ll be able to cut them off from support earlier. While your aging parents may continue to depend on you for the rest of their lives, the time will come when your children will become self-sufficient. By teaching them about personal finance and exercising good financial habits yourself, your children will be better prepared to fend for themselves. I’m not suggesting that you cut off your young children, but certainly once the kids move out of the house, they should be responsible for their own financial matters with the possible exception of education expenses.
Break the Cycle
Tough financial times may leave you with little choice but to cut back on your own retirement savings. Try to avoid that route if at all possible. By continuing to fund your own retirement, you’ll be helping to ensure that you won’t burden your children in the same way that your parents may have burdened you.
No one wants to turn away a parent in need. With financial discipline, appropriate priorities, and careful planning, you can at least make the best of a difficult situation and hopefully prevent it from happening again. Leave us a comment about other ways you’ve found to deal with this situation.
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