How do I financially support my parents and still take care of my own goals?
It’s not uncommon for adult children to financially support their parents. In fact, the U.S. Census1 reports that as recently as 2020, 4.3 million American adults were providing $17.5 billion in voluntary financial support to their parents. Additionally, Pew Research2 reports that a third of young adults say they helped their parents financially in the past year.
If you’re among the people helping your parents in this way — or if you think you might someday — there’s a delicate balance you’ll need to consider. Providing support is noble, but you don’t want to put your own financial goals at risk to do so. Here are a few tips that can help you navigate this situation.
Establish budgets — for yourself and your parents.
If you haven’t done so, build a budget for your household as well as your parents’ household. Having a firm understanding of both sets of finances will help you understand how much support your parents might need, while also helping you know how much you can spare without causing financial headaches for yourself.
When building these budgets, be sure to add in a line item for unexpected expenses. Health care issues in particular can develop quickly and add up fast, so it’s best to be as prepared as possible.
If you need some help building a budget, here’s a handy guide.
Help your parents reduce expenses.
One of the benefits of budgeting is that it can help identify areas where your parents can lower their own expenses to help their money go further. Sometimes the key to financial resilience is downsizing. For example, your parents may be in a house that is too big for them or costs too much to maintain. Or they may still own two cars when one will suffice. On a smaller scale, they may be subscribed to services they don’t use.
Offer to help them with the downsizing if need be. Depending on their health, they may need help with things like finding a realtor, packing, or selling a car. These can be areas where you’re able to help them improve their financial outlook without involving money.
There are other, simpler ways to help keep their costs down as well. You could invite them to dinner more often, or bring them meals, to help reduce their grocery bills. Driving them to appointments saves on gas and vehicle maintenance. If you’re handy, you can offer to help with basic home repairs. Over time, these small favors can really add up.
Invite your parents to live with you.
This solution isn’t for everybody, of course. Your parents may highly value their independence, or you may simply not have enough room in your home to accommodate more people. On the other hand, there can be a lot of upside to having your parents move in. It frees them from all the expenses of maintaining a home and makes their lives much more affordable without adding much to your own budget, aside from perhaps food and a few extra household supplies.
Setting money issues aside for a moment, sharing a house with your parents also offers an opportunity to reconnect with them and gives you more ability to help them in many ways. You can run errands for them, help them manage doctor’s appointments, and even play a more active role in helping to protect them from fraud. And none of these extra benefits impact your own bottom line.
If you do give money, establish ground rules.
It’s important to set some limits if you decide to provide direct financial help to your parents. Establish a set amount — one that you can afford within your own budget — and stick to it. It may also make sense for you to pay bills or buy things for them yourself. If you do give money, make sure you know how they are spending it and that they are handling the money wisely. Keep in mind that even if your parents were very responsible with money earlier in life, they may struggle more with financial decision making as they age. The more involved you are, the more you can be sure your parents are getting the most benefit from your support.
Helping parents while also keeping your own financial future on track can often be tricky. The good news is that if you use some common sense and are able to help in a variety of ways, it’s possible to strike the right balance and keep both households in good financial shape.
