When Is the Right Time to Set Money Aside for Caring for Parents?

Transcript

Let’s move on to Rakesh’s question. Rakesh says, “Okay, is it okay to put money aside for caring for parents after saving enough for retirement and kids’ education? What step should we do that on if we’re following the Financial Order of Operations?” I think this is a great question.

Yeah, it is a great question. So, I’m going to answer the first part very easily. “Is it okay to… with money?” Well, it doesn’t matter what the “…” is because ultimately, money is nothing more than a tool that allows us to do the things that we want to do, to do the things that we value. So, if one of the things that you value is being able to care for your elderly parents, and that’s what you want to use your money to do, that’s totally fine. Someone else does not need to dictate to you what is right or wrong for you to do with your dollars because money is nothing more than a tool.

Now, where we come in is when people say, “Hey, I want to do this, but I also want to retire, and I want to provide for my kids, I want to do this.” Well, then we have to start talking about opportunity costs and how there is a trade-off because we have a scarcity of resources. So, you might not be able to fund all of those goals. So, the question, “Is it okay to put money aside from my pay to take care of my parents?” Unequivocally, yes. If that’s one of your goals, that’s okay. Now, where should it fall in terms of the financial order of operations depends on where it is in terms of your goals, and that’s the part I’ll let you speak to.

It’s going to be step number eight. I mean, it’s back to—you know, we tell you, and I love how you ask the question because you’ve obviously a financial mutant, and you recognize—you’ve already let us know, “Hey, I’ve prepared for my future.” So, you’re in Step eight when you have already funded your retirement. You’ve got the 20-25 percent, you’ve thought about the three-bucket strategy. Now, you’re at that place where you can now make decisions beyond just the basics of, “Hey, what type of car do I drive? What do I want to do with my money?” And I love this one because this is a very noble thing that you’re doing. I mean, I’ve talked about this on my own journey, having a daughter with autism is that I have to save not just for my retirement, but I have to save for her retirement. But then, I was also on a client call yesterday, and I had a client, and she was sharing with me that she had helped out a loved one, and she was kind of bashful about it, and it made me sad a little bit because I don’t want people to be scared to tell me when they’re doing things with their money because it is just a tool that you’re helping. And I had to tell her, I was like, “Look, I’m so happy you’re helping this loved one out. You are obviously so blessed and you’ve done so well with your discipline, recognizing the three ingredients of wealth that you actually use discipline to create this amount of wealth. If you can pay it forward in a positive way to help people who obviously—you know, you’re on the shoulders of your parents, that’s glorious. I mean, that is as generous. That’s abundance mindset. There is nothing wrong with that. So, I want to commend you for being generous and helping people you care about because I think that’s powerful.”

Now, I will flip the script a little bit with young people because you talked about your parents. I think you should shower your parents. I mean, like I went and saw my mom this weekend down in Georgia. She didn’t pay for anything. I’m like, “You get Mom dividends. You get Mom dividends for the rest of your life at this point.” I think paying it forward to your parents, load them up because they brought you life. I think for kids, though, you do need to be careful. Load them up, obviously, on education and other things, but make sure you don’t give too much too early to where you take the joy of life away from them. That’s something that I struggle with living in an affluent community is that I see people loading their kids up with fancy cars and other things. I’m like, “Oh, what is that kid going to aspire to when they get to success? Or will they even aspire to have success when they’re driving around their parents’ used G-Wagon and people are, X5, BMW?” I’m always like, “Well, it’s six years old. It’s a used X5.” But yeah, that’s still an X5. Do we really want to give our kids a BMW X5? So, just make sure you keep the excitement for life for your kids. That’s not your question because you’re focusing on, like, the parents, load them up. But I think that needed to be heard. Good for you, Rakesh, for being willing to do that. For more information, check out our free resources.