5 Easy Ways to Put Your Parents Finances in Order without Going Broke

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Perhaps everything you’ve got in life you owe it all to your parents, and you love them for this. You deeply care for them. And nothing will stop you from doing anything in return including helping them financially when the occasion calls for it.

If money management is not your parent’s strong suit, don’t worry. You can figure out ways to help them financially without stressing yourself emotionally or even going broke.

If they are fully dependent on you, try and come up with a system and process that allows you to help them while keeping your finances in order. How to do this?

Keep your communication lines open

In other words, make sure to communicate with your parents before you make a decision to help them financially. Your intentions to help them may be well intended but this is not a one-man decision.

What if they don’t want any help with their financial situation? So start a conversation with them first. Money is a sensitive issue and it gets more complicated when it comes to family.

Before you bring in an objective third-party like a financial planner to go through their financial situation and assess where the problem is, make sure you have a sit-down with your parents and let them decide if they need help in the first place. This will help especially if your parents feel you’re trying to show them what to do or embarrass them entirely (which is not the case).

Once they agree to your helping them you can then employ the use of a financial planner to strategize and create some plan based on their financial needs.

Knowing that they need your support can help you create future plans on your part – achieving your objective to help them without going broke.

Prioritize your finances first

Before you can step in to help your parents financially, you must understand your own finances first. Know your limits to how much you can help. You don’t want to go broke while helping your parents. You can start by setting up a savings goal for them. You can then decide on a figure or amount that you can give them on a monthly basis.

For instance, you can set up a fully funded emergency fund for them where you take the amount of your earnings and set aside for them to accomplish your objective. While doing this remember to save up for your retirement as well. Be on track with other payments, too.

Just because you’re putting money aside for your parents does not mean you stop saving or taking on debt or loans – life has to move on. So, while you think of them, you have to think of yourself and your family, too. If everything goes on as planned you can consider increasing the amount you give your parents, but it is not necessary. Prioritize your finances, for now, start paying dues , monthly bills and unpaid realistic loans installments on time to avoid further hassles..

Set up separate savings account for them

To have a great insight into how your money is doing, separate your funds from theirs. Create separate savings account for your parents. This will help you prioritize your finances by creating a boundary that you can stick to.

If their accounts run dry and you don’t have enough money to help them, you don’t have to deposit money for them. No this is not a mean move. It is about financial planning and prioritizing what is important at the time. And also to make sure you don’t go broke while trying to save your parent’s financial situations.

Setting up a separate saving account for your parents ensures your financial goals remain unchanged. It helps you decide what to budget on without interfering with your savings, emergency fund savings, or retirement savings.

You can have a set amount of money each month deducted from your earnings automatically. For example, you can have a contribution of $100 deducted from your earnings every month, and then steadily grow the amount in their separate savings fund.

These contributions may seem small but over time they can help meet their needs rather than having you come up with thousands of dollars on the spot to help them.

If your parent’s financial situation stabilizes, you can consider saving the same amount of money each month you used to say for them, but this time for future investments. Putting money to work is a lot better than just saving them for future use.

Ask others to chip in

If the weight of helping your parents financially becomes too heavy, you can ask your relatives or siblings to contribute. You don’t have to shoulder the burden alone. Ask for assistance from your close relatives to help fund your parent’s savings account funds.

Taking the initiative to bring more people on board to help your parent’s financial needs will make sure your financial goals are not affected over time, and that you don’t go broke. One thing you should remember: assistance doesn’t have to come in the form of money.

You can ask relatives to help with cleaning up the home or taking care of their living arrangements. This will come in handy. Tidying up their compound by cleaning their yard is not only necessary but also brings value to them. It also ensures you don’t go broke while trying to save the ship as you don’t have to pay someone else to do the job.

Employ proper money management skills

Before you plan on saving up money for your parents or helping their financial situations, you have to decide how you want your money to be spent. Managing your money is the first step to ensuring you don’t end up broke while trying to help them.

So instead of giving your parents money and telling them what to do with money, instead pay their utility bills and other expenses directly. That way you will have control of your money.

Alternatively, you can employ the use of a financial planner to indirectly plan their finances like managing their finances altogether or budgeting for their retirement.

Also, you can take up an insurance policy for them to meet their medical needs. This could save you so much in healthcare costs for them in the long run. Medical costs can be expensive and can cripple your finances in ways you can’t imagine.

Final Words

It is important to start a conversation with your parents before offering financial assistance. It allows them to understand why you are doing this for them, and what to expect before you start setting aside money for them, or planning their finances.

Sometimes it is not your call but theirs. Once you communicate with your parents on how you going to help them, remember to prioritize your finances and know your limits to how much you can help them otherwise you may end up broke. Set up a separate savings fund for them and ensure to ask your siblings and other relatives to contribute if the burden gets heavy.

And before you can hand money to your parents make sure to decide how you want the money to be spent. Managing your money is the first step to meeting your financial goals and ensuring your cash reserves don’t run dry while offering financial support to mom and dad.

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