Parents, of course, love their children. They care for them throughout infancy and childhood, into the difficult teen years and through college. They provide support and guidance. If they can, parents help pay for college. However, sometimes parents get so wrapped up in caring for their children that they forget to care for themselves.
This might manifest itself in a lack of sleep or overeating because of stress. A good parent can be a much better parent if she takes time to also care for herself and still does the things she enjoys, eats healthy foods and exercises. Likewise, parents also neglect their financial health. Perhaps he diverts more money than he can afford to college savings at the expense of retirement. Perhaps he pays for a child’s traveling sports team membership when the money should really be going for other needs. While it is important to give your children your time, attention and financial support, it is also important to take care of your own health, both physically and financially.
As new parents, there are financial responsibilities you must give priority to.
Responsibilities For Parents Of Young Children
-A will and trust.
It is vital that you have a will and trust to outline who will care for your children in the event of your death. You must also assign someone to make decisions should you be unable to. There should be directions detailing where the money you have will go and how it should be used. If you were to pass without this document in place, your assets may go into probate which can take a long while to resolve.
If you die, your family loses not only a spouse and parent, but they lose all of your income and your earning income in the future. If you don’t have life insurance, your family could struggle for years with the loss of your income. My dad died when I was 15 with very little life insurance in place. My family struggled financially after his death because we had lost the primary breadwinner. My mom has never had it easy financially, and as she nears retirement, she is woefully unprepared. She will be living on a shoestring budget in retirement, in part because she didn’t enter the work force until she was 40 and she didn’t have life insurance to help her with the loss of my dad’s earnings.
Responsibilities For Parents Of Adults
As your children grow and your financial situation improves, there is less need for life insurance. Once you reach your sixties, you may think many of the financial concerns of parenting are done. By now your children should be on their own and financially independent. However, at the age of 60 on, a new batch of financial issues creep up that you must address.
-Long term care insurance.
No one likes to think of their demise, and they don’t like to think about languishing in a frail condition where they need constant help. Yet, we see many people we love do not die quickly but instead suffer with declining health over a course of several years. Long term care insurance, while expensive, can help your family members better take care of you. If you choose not to get long term care insurance, you are choosing the very real possibility that your children will eventually either have to put you in a subpar nursing home or pay money out of their pocket to help pay for a very expensive, quality care facility.
Suze Orman once stated on her show that her mother decided against long term care insurance even though Orman was going to pay the premiums for her. Her mother didn’t want Orman to waste her money that way. Now Orman’s mother is in her nineties, and Orman is paying far more for a quality care institution than she ever would have paid for a long term care premium. Luckily, she has the money to pay, but most typical Americans would face a financial struggle.
-Have an adequate retirement.
While your child might be angry with you in childhood for not funding his desire to join the traveling hockey league because you are funding your retirement instead, chances are in later years, he will be glad that you gave your own finances priority. As a parent, if you retire with less than adequate funds and are not willing or able to get a part-time job, your children will likely feel obligated to help you financially. Some may say there is nothing wrong with this because parents invested their time and money in their children; now it is time for the children to return the favor. However, when you may need financial help in retirement, your own children are probably trying to fund their retirement in addition to taking care of their own children financially. It can be the beginning of a cycle that will continue for generations.
We parents love our children, but sometimes the best way to show that, in addition to time and attention, is to take care of our own financial needs so that our children don’t have to.
7th December 2011