A report by The Caring Advisor reveals that a third of Millennials are laying plans to financially care of their aging parents and that, on average, they’ve put away about $3,100. That’s not enough, though. Nearly 1 in 3 shared they’d take on another job if it calls for it. Whats more, the millennials surveyed said they haven’t even began to seriously put thought around what it would take to financially support their parents due to their own money concerns.
Shazia Virji, General Manager of Credit Services at Credit Sesame, the first platform to provide free access to consumers’ credit scores, says there’s a good reason for the worries.
“Individuals who support their parents financially as they age have an added layer of pressure when it comes to reaching their own financial goals, especially during a high inflation environment like the one we’re in today. The emotional and financial stress that comes along with being the primary financial support system can be daunting.”
Fortunately, there’s hope.
Virji shared tips for millennials concerned with taking care of their parents, particularly as a recession looms.
Be open and honest
“You want to ensure that you’re not foregoing your financial goals, since achieving financial security will help you be more independent as you yourself reach retirement age. Have conversations with transparency and respect.
Ask questions: Ask your parents if they have their estate planning documents in order. On the financial side, it’s important to know how much liquidity your parents have from retirement accounts or other assets, as well as understand any debt that they’re currently responsible for paying back.”
“There is no need to put your financial goals on hold. Planning out your financial goals in advance is a good first step, so you understand the timeline and commitment required to get there. If you’re saving for a big purchase such as a home, there are tangible steps to take immediately that can help prepare you financially for that purchase down the line, while still lending support to your parents.”
Maintain healthy credit
“By understanding the fundamentals that go into having a healthy credit picture, you can set yourself up for financial success while also balancing the needs of your parents. Pay your bills on time, spend responsibly on your credit cards, and keep your credit utilization to 10% or less for the best potential credit scenario and 30% or less for a good credit scenario. By showing lenders that you’re responsible with your credit, you set yourself up for success, regardless of when you decide to take action on your financial goals.”