Helping Mom and Dad during tough times INQUIRER.net
March 03, 2009
(This is part of Take Charge of Your Money , a partnership between INQUIRER.net and Citibank to help readers handle their personal finances well.)
Question: Both my parents are already in their 70s. Although they do not have any more major obligations since all three of us children are already married with families of our own, I somehow see the struggle they have financially. How can I best help them given my limited funds? I am not able to support them fully since I am also taking care of my family’s needs. – Myra
Answer: It’s good that you are concerned with your parents and how they are coping at this time in their lives. It’s challenging enough to be at their age, likely retired with no income and living on their savings. But add to this the present effects of the global financial crisis, and they may be in even tougher times.
Since it is their finances that you are worried about, you have to put away any discomfort you may feel, and go sit down with your parents. Find the right time and gently talk to them to gauge just how they are doing financially. Tell them that you would like to help but would need to know some facts so you can act accordingly.
Here are some guide questions you may ask your parents: 1. What are your usual expenses monthly? 2. How are you able to pay for them? 3. Do you have any savings or investments? How much return do these give you? 4. Do you have an emergency fund? If so, how much and where is it invested? 5. Do you have any debts? If so, name your creditors and the amount you owe them. 6. What are your other assets? Are these in your name? 7. Do you have any receivables from other parties? How much do they owe you and when do you expect payment? 8. Do you have life and health insurance?
Your parents may be worried, so let them know that you understand where they are coming from. Reassure them that you are willing to help, although you will not be able to extend full financial support given your family’s needs.
After they have answered your questions, suggest ways they can handle their money better. Here are some suggestions: 1. Encourage them to make a budget. Have them write down all their usual expenses monthly so they can see at a glance how much they need to live on every month. Tell them to prioritize those that are important (examples: medicines, medical checkups) and minimize spending on what are not essential. In effect, teach them to distinguish between needs and wants and prioritize needs. 2. If they still get regular income, ask them to save at least 10 percent of their income for future needs. 3. In case their income is not enough to pay for all their expenses, go over their expenses and help identify those that can be cut down. 4. Talk with your siblings so you can share the responsibility of paying for some of your parents’ expenses. For instance, you may be able to share the cost of groceries or medicines, or the services of a driver or house helper. 5. If you see that they are in debt, encourage them to look around and sell any idle asset whose proceeds can be used to pay off the debt. 6. If people owe them money, find out if they are exerting effort to collect on these debts. Help in collection efforts if you can. 7. If all their savings are kept in a savings account, encourage them to consider putting some of these that they will not immediately need in a time deposit so it will earn more interest. In view of recent industry developments, look into the stability of their bank as well. 8. If they have life and health insurance, go over the policies and review with them the features. They may not know, for instance, that certain medical procedures may be covered by their insurance. If their life insurance policy has a return of premiums benefit, it may be a good time to avail of that now so they can use the funds for their needs. 9. There are a few insurance companies that offer limited health insurance to the elderly. Find out more about these products and avail of them for your parents if they sound good. 10. Help them get their financial papers in order, from SSS, GSIS and PhilHealth records to bank documents, investment instruments, and insurance policies. Remind them to keep these in a safe but accessible place. 11. Bring them to a financial adviser, or to money management seminars so they can get further tips on how to handle their finances. 12. Surprise them with a treat. They may not want to spend on fancy dinners, vacation trips or even new clothes. Treat them once in a while to show them your love.
By extending both financial help and assistance in managing their finances, you may be able to help your parents enjoy their remaining years. Do it while there’s time.
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