If you are someone that takes care of your parents or family members financially, then you are aware of the financial strain that can sometimes come with it. Juggling your finances to stretch far enough to cover everyone's needs can be tricky.
Here are some handy tips to use when it comes to helping your parents without using money.
Before we start
It's important to understand that your financial situation is different from the next person. Being honest with yourself and your parents or family members on what you can afford can make the journey of financially planning smoother. It is crucial to speak to a financial advisor who will be able to find a healthy solution that is suitable for your circumstances.
Evaluate the current situation
Money can be a sensitive topic, especially when it comes to discussing it with your parents. However, when both sides are transparent about their financial situation it can make for better understanding and finding a way forward. Knowing their income, expenses and any debt they may have can give you a realistic picture of how you can assist them. Financial planning can help you map your way forward.
The discussion of downsizing may be a difficult one to swallow, but if it is pushing you and your parents into the red financially, then it is time to downsize. Look at ways in which you can cut back on spending. You may have to talk about downscaling their residence and decreasing their current expenses. In some cases, co-living arrangements with family may be beneficial.
Create a sustainable budget
Looking for ways to cut back doesn't necessarily mean that they will have to live on close to nothing to make it through. Instead, you could help them assess their current budget and look for ways in which you can find a more affordable version of products that they love or compare your way to better options that can work for a sustainable budget. It is also beneficial to reassess their budget every 2-3 months to see what is working and what isn't to help reach a place where everyone is comfortable.
Covering emergency expenses
If you do not have an emergency account set up, try setting up one. Having an emergency account can help you cover those unexpected expenses that come up, especially as your parent's age. Set an amount of money aside that you will be a comfortable contribution every month.
Have the necessary policies
Being a breadwinner to people who rely on you financially means that you always need to be thinking one step ahead. Therefore, having policies such as life cover, funeral cover and a will can be beneficial to ensuring that they are taken care of even when you are no longer around. You can do the same thing with these policies by finding one that is affordable and comes with features that are beneficial for you and your family. If you are not sure how much life insurance you will need, you can make use of our life insurance calculator that will give you an estimate.