Helping Your Parents Out Financially

Helping Your Parents Out Financially

They say it’s part of the cycle of life. Your parents braved your dirty nappies, scraped baby food from the kitchen floor and listened to you howl all night long. Now you might be needed when your parents get older and you’ve started a family of your own.

Helping Your Parents Out Financially

Helping Your Parents Out Financially

Parental support can take many forms. It might mean taking your mom in when she can no longer care for herself, or paying the bill at an assisted living community. And if your parents, like so many others, are victims of this dwindling economy, you might need to step in when they run out of retirement income.

A Sensitive Issue

If your parents are anything like mine were, they don’t like to ask for help. They loathe the idea of appearing vulnerable to their children and they don’t want to admit they’re in a jam. This is why you must bear the burden of sensitivity.

You might be in a position where you know your parents need help but they haven’t actually talked to you about it. This can be painful because, much as you love them, you don’t want to insult them by offering assistance.

Think about how your mom and dad handled problems with you growing up. Did they jump in the second they noticed you had a problem, or did they want for you to come to them? You might want to take a page from their book and approach the situation in a similar way.

Working the Finances

If you are in a position to offer financial support to your parents, you’ll need to decide where that money will go and how much you can spend. If you fail to think rationally, you’ll wind up broke yourself and then you can’t help anyone.

Talking to a financial adviser is the best way to prepare yourself to provide financial support to your parents. They can help you determine what assets to liquidate and how much you can afford to give on a monthly basis. Consulting a professional will take some of the personal feelings out of the equation, which will ensure you make smart decisions.

Choosing a Course of Action

This is also the time to explore multiple options. If your parents want to maintain their independence, you will have to figure out how you can support two households. If, however, they are amenable to taking up residence with you, or if there is another option (selling their home or taking out a reverse mortgage), you will need to work with that.

When retirement runs out, parents often feel like they are completely helpless, and this might be the case. But by exploring options with them, you can give them back some of the control and allow them to help themselves while you offer support.

Many financial experts advise against selling a house. However, a reverse mortgage on a house your parents own might free up some cash and give them a much-needed cushion. Keep in mind that predatory lenders often take advantage of the elderly, so stay involved in the process and help them choose a lender they can trust.

Making Room

It might be necessary to take your parents in, at least for a short time, while they figure out their finances. If this is the case, you will need to discuss the issue with your family and create a welcoming environment for the duration of their stay.

Single guys might find it is cheaper to move into a larger place and bring their parents with them rather than paying two mortgages or two rents. If you have a family yourself, you will need to find out how your spouse feels about the situation and discuss the issue at length.

Helping your parents out financially is an admirable mission, but make sure you are taking care of yourself in the process. Consult professionals and consider your options before jumping into a decision.