How to Care for Financially Unstable Parents

March 2, 2023

How should you approach helping financially unstable parents? In this highlight, Bo and Brian give some insight on how you should approach a situation like this and make sure this situation doesn’t hurt you financially.

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A cardiac RN has a question, ‘we are in the messy middle. One of our four sets of parents is financially unstable. It’s likely they’ll need assistance from us in the future. Any advice on how to prepare so we don’t get totally financially derailed?’

So, you know, what do you do if you’re someone who’s been financially responsible, made good decisions, you’re in the messy middle, so I’m assuming that means you’re somewhere in that 30s-ish range, you probably got some kids, you got a mortgage, you got job commitments, you got things pulling you a thousand directions. Oh, and by the way, you know your parents maybe haven’t done everything that they should do. How do you account for that, and how do you plan for that?

I don’t know if there’s a right academic answer to that because every family situation, every family circumstance is so unique, and it’s hard to make difficult decisions, especially when family’s involved. Because I’ve seen it a lot of times where, in lieu of someone building their own financial independence and saving for themselves and funding their emergency reserves, just like we talk about parents who do economic outpatient care to their kids, we’ve seen kids who will actually do economic outpatient care to their parents. And what all that does is it’s keeping two different families, two different generations on rocky financial footing, and that’s just hard because I don’t know the right answer.

Well, let’s take the emotional stuff out. It’s actually like all things, I think you have to look at this like a good financial plan and create a plan of action because if you wait, this time is not your friend. This is going to be something much easier if you tackle now than it will be five years from now because you at least can go ahead and make steps today that could be beneficial in the long term because this is no different. Having a special needs child that will probably never live on her own, I have to, that’s a huge financial obligation that just, you know, most people are saving for one retirement, and then my family, we have multiple retirements we have to save for. And I think it’s the same thing with the cardiac RN, is that if you have a parent that doesn’t, they love you and they brought you life, but they’re just financially, you look at them, you go, “holy cow, how do they make all these mistakes?” And that’s one of the things I hate as you get older because, as a kid, you’re taught to respect adults and stuff, and then I remember getting to the age where I realized, “man, a lot of these adults don’t have it figured out.” I mean, remember, the majority of the population doesn’t have it figured out.

Maybe now, you have to save 30 to 35 percent of your money. I won’t know that until you actually start putting pen to paper and creating the plan. Go ahead and make those assumptions and write it out. That part you can keep to yourself. You don’t have to let them know that you’ve created a plan for them. Moving to the basement or sending them out for economic outpatient care for the parents – that part you just plan accordingly and put it in motion because it’s better to focus on that today than it is 10 years from now. Maybe that money could grow and help you with this heavy lift that you have.

The second part that I don’t want you to keep a secret, though, is maybe you can, in the meantime, try to figure out how to mitigate this person’s behavior. You know, talk to your parents about, “Hey, what’s some good financial decision-making that you can be doing to be more financially independent? Is it consumption? Well, hey, you can get out of debt.” We just talked about how there’s nobody better at getting people out of debt than Dave Ramsey and others. You can use resources like that. Maybe they just don’t know how to save and invest. Introduce them to some of our content where we talk about index Target retirement funds, where you just talk about how much you can save and then when you need it. Start working on their behavior. And those two things are a two-prong approach. Hopefully, we’ll come into an intersection where if you do it right on the second part, the public part where you’re sharing and trying to get them to be better with the skill set, hopefully, it makes the intersection point easier on you on what you’re having to do with the heavy lift of saving in the background.

I hate to put it on your shoulders that way, but sometimes, those of us with the skill set of deferred gratification, the ability you’re in a great career, so I know there’s going to be earning potential there. That great responsibility is unfortunately going to probably fall on you more than you probably wanted to. And that’s why you also need to start that conversation with your spouse so that there are no ill feelings about that as well. And it’s okay to say no sometimes. Obviously, you know your family, you know your dynamic, and you know the need, right? If someone needs to eat, do what you can do to help that person eat. But if someone is ready to stop working and they’re ready to ease into retirement, but they don’t have a mechanism to do that, it might be one of those things where they need to keep working, they need to keep going to their job, they need to keep earning an income. Don’t feel like just because it’s family, you have to say yes because that might not be setting you up for long-term success if you’re a part of that cycle.

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