Written by Olivia Bailey
Finding yourself in a situation where you need to take care of your parents while looking after your own family at the same time can be a real body blow to your finances. Without careful planning and some good fortune the consequences to your future can be worrisome. You might feel you need to put your retirement plans on hold while under such budgetary strain, but there are ways to balance the books and keep your goals on track.
Here are some suggestions to organize your finances to cope with immediate financial pressures and plan for current and future expenses. Consider this an overview of some of the financial challenges you might face and some tips on ways to find the cash you need now and in the future.
Plan ahead to stay ahead
The odds are in your favor you will live to an older age than previous generations, which is great news in one respect, but presents a financial challenge when you try to plan your finances to have enough money to live out your golden years in comfort.
Add in the additional complication of looking after one or both of your parents who are over 65 along with the financial support you need to provide for your children and you can see why this scenario makes saving for your own retirement seem like a bridge too far for your finances.
There is no question that you want to provide support for your parents and children when they need it. The trick is to organize your finances so your own future prosperity and comfort is not thrown into question.
When it’s time to pool your resources
If you find you need to provide for your elderly parents, both emotionally and financially, the subject is not open to debate for most of us who assume that degree of responsibility without a second thought.
The financial consequences of such commitment can be significant. Your own financial situation can quickly deteriorate unless you find a way to pool your resources to reach a solution that provides the help they need and makes the most of the money available in the family pot.
Attitudes towards money have changed in recent generations but elders often have an ingrained reluctance to discuss their finances even with their children. However, it makes a lot of sense to try and overcome this barrier by addressing key issues like estate planning, medical insurance, current income and expenses, and any other relevant finances to gain an accurate insight into their financial position and future financial security.
Perhaps you can find a way to persuade them to downsize from their existing property, for example, to something more suitable and cheaper. This could help ease their own financial burdens and in turn relieve the pressure on you.
Explain to your elderly parents the value of an in-depth look at their finances. A thorough review could be beneficial and may result in a greater annual income than they currently enjoy, which would reduce the burden on your finances at the same time.
It is always a good idea to explore all the possibilities and options as part of the potential solution that could help everyone. It could even lead to a situation where you pool your resources and combine your finances to provide a way forward that works for everyone.
Getting them through college
College is a major financial event for parents. If you are struggling to find money to meet all those college expenses, there are some options to assist with your efforts. You can find a college near home where they can go so they don’t have to move out and you won’t have board and living expenses.
Don’t forget to check what financial aid you might be entitled to or whether your child might be able to get a scholarship.
It is a challenge to get young adults through college without racking up huge debts. But if you can plan and prepare and somehow stay on top of things you will have negotiated one major financial hurdle without putting too much of a dent in your retirement plans.
Lower your monthly commitments
If you are paying off several credit card debts each month as well as loan repayments, it might be worth looking at consolidation as a way of making your debts more manageable. It could make sense to find out before you apply whether this solution could work for you.
Sit down and work out your current monthly budget to see where your money is going each month. Find where you can cut back on some outgoings that could then go towards your retirement plans.
Putting your feet up might seem a distant dream at certain times when your finances are under so much pressure, but you can and will find a way to see it through and enjoy your own retirement at some point.
Olivia Bailey writes about a range of personal finance matters in her online articles. When not typing up a new article she’s busy with everyday family life, raising 3 kids and keeping home for a hubby.