Isn’t your duty to support your family in need? But can you do that without risking your own future? Yes, certainly you can. Keeping that in mind, Best On-Call Financial Advisory Portal, MoneyMindz.com share some tips for when and also how to help a loved one while protecting your own financial future:
Start Preparing to Provide Help Early
When it comes to funding higher-education, most parents want to help their children financially. But providing such assistance to children can also impact your own retirement if not planned properly. Therefore, starting an education fund early in your child’s life with a small amount of money allows you as the parent to continue to fund your retirement at a higher rate.
Review Your Bottom Line First
You should go over your budget and financial picture before saying yes to a loved one’s request money. It is in fact important to discuss your income and expenses as well as the family member’s financial request for support to a professional financial advisor. You can ask these questions to yourself: Are you able to pay your own bills and consistently put money into a savings account? Do you have extra money that you might otherwise have available for free spending?
Don’t Shortchange Your Retirement
You shouldn’t dipp too significantly into your retirement funds, or decreasing your contributions, in order to help family members. “And while college lasts for about four years, retirement could be 30 years or more,”. “Taking from your retirement nest egg or cutting down on your retirement contributions could mean your child will foot the bill in the future. A good rule of thumb is to make sure you’re not paying more for your child’s college education per month than you are saving for your retirement.”
Share the Financial End of Caregiving Among Siblings
When it comes to supporting aging parents, location can play a big role in who provides the assistance in large families with multiple children. “Typically, the person who is physically closest has to do most of the work… However, this could eventually cause a rift between siblings if the need increases over time,”. “A good way to keep things from becoming unfair is to share the financial end of caregiving equally or in a way that makes sense between family members.”
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