Monday, July 21, 2014

Money Monday:Family and Money

Much has been made about my generation. As millennial's, we graduated right before the great recession. We had our degrees, student loans, and idealistic aspirations. We were ready to light the world afire.

Then, the bottom dropped out. The economy sank, plans changed, and the lives we thought we were going to lead suddenly seemed out of grasp. Suddenly, millions of us moved from our college apartments back to our childhood bedrooms. We were called the boomerang generation, and were accused of taking advantage of our parents. We took jobs we didn't want (I myself worked as a substitute teacher, hotel maid, and at a day care) and eventually made it out of the nest. It took a bit longer and life looked a lot different than we wanted. But, after slogging through, we made it out of the nest, and made it on our own. 

Now, however, the tables have turned. Our parents are moving into the next phase of their lives, retirement. Their careers are coming to a close, and they are reworking on their own budgets to see if they have saved enough money. Its a scary thing to quit work and live on your savings for the remainder of your life. Many baby boomers are realizing that retirement may be a little harder than they imagined. They spent so long taking care of their kids, that for some, they neglected to take care of themselves. 

So now, the question becomes, is it the child's responsibility to help the parent financially? In Eastern cultures, it is very common for multiple family generations to live under the same roof, or next door to one another. Western culture is one of the few that encourages such extreme individual independence.

Forms of help 

Family loans. Children can loan parents money for a variety of reasons. To help pay off high interest consumer debt, car purchases, or cover medical bills. 

Monthly subsidy. A fixed amount may be given to the parents each month to help cover household expenses. 

Household merging. For thousands of years this has been common, but its becoming more and more popular in the US. Parents are now moving in with their child, their spouse, and their grandchildren. The parents pay a very low rent, and part of the monthly bills. In addition, they often help with child care and household chores. 

Gifting. Another way for children to give back to their parents is to buy the things they need. Groceries, clothing, lawn care and taking care of other necessities are some other ways children and give to their folks. 

Money and family can be sticky situations. There is something called the "powdered butt syndrome." That means, if they powdered your butt, they don't want to hear your advise or thoughts on money. Though the discussion may be tricky, it is a necessity. 

The best thing families can do is to be open and honest about their financial situation as early as possible. As always, the great thing about personal finance is that you have the ability to change your situation, no matter your age.

Are your parents getting to retirement age? Do they have a plan? 






4 comments:

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Kay B said...

I don't think my parents are where they need to be but they have about 9 more years to go til full retirement age. I have a really good relationship with my parents so I would want to do anything in my power to take care of them just like they took care of me as I was growing up. My parents sacrificed a lot to give my siblings and I everything they could and so part of me feels like I owe them (but a debt that I want to be able to repay if I financially can).

Brooke said...

I'm sure you've read about my dad's "reFIREment" but they seemed to have manage everything well. he's only 63, and things are working out for them. my mom plans on retiring around age 62 (3 more years for her)
Jay's parents, however, are a decade older than mine and still working. partly money, partly because the drawback of being a workaholic means you have no other hobbies. thankfully its a profession suitable for a 73 year old man.