Don’t Depend on : Parents for
Emergency Fund & Children for Retirement
Fund

After reading the post’s title, I’m sure many of you are going through some pretty terrible emotions right now. Many of you will likewise be afraid about your lack of financial competence. If, however, that is not the case, you are a fortunate person who is doing well. You are capable of managing crises without the assistance of your parents. Furthermore, you’re well on your approach to building a retirement corpus that will save you from having your kids for post-retirement needs.

However, if you consider your kids to be your backup retirement plan in case of financial problems and you do rely on them for support, I can only offer you one piece of advice.

You must take immediate action to address it. It would help if you acted on this right now.

Something is wrong if, despite your age, you still have to ask your parents for money to get through financial problems, whether you are young or middle-aged. Is it not? When I refer to financial crises, I do not mean using parental funds for investments (although this is typically done by those looking to purchase real estate or other property).

I’m referring to situations when you frequently find yourself short of cash at the end of the month, find yourself unable to make complete and timely credit card payments, miss loan EMI payments, etc. It’s okay if these things occur sometimes. However, if these incidents happen frequently, you may be certain that something is wrong. You are either not adequately budgeting your future spending or your expenses are surpassing your income needlessly. Things may soon get out of control. I have witnessed it occur with my wealthy pals. They make good money. But practically speaking, they’re still broke.

One of the first things every young person (or anyone who hasn’t done it yet) should do is create an emergency fund. Keep in mind that emergencies will not wait till you create emergency funds

Getting three to six months’ worth of expenses (including EMIs, if possible) might be a decent goal for this fund. Doing something can sound difficult. And I won’t hold back in this situation: starting anything new is not simple. It is considerably more challenging when an individual has a spending habit that exceeds their income. However, it is necessary and the proper thing to do.

Furthermore, don’t base your financial planning assumptions on the possibility that your parents may support you financially in an emergency. Take the responsibility in your hands. Over the last few decades, your parents have already done a great deal for you. Why not use them right now as your emergency funds?

That has to do with asking parents for assistance with living expenses.

What about your retirement plans, though? How are things going for you? Do you have any doubts about it? Or are you aware that your situation is not good? To be honest, I have no clue what to say if your vision of retirement is that your sons and daughters will take care of you throughout your non-earning days.

All I can hope for is that your kids behave as you would want. Because it will be a really frightening situation if they don’t.

If you are not investing properly for your retirement, then that can be the worst thing you are doing for yourself. Plain and simple.

You have complete trust in your kids, I’m sure. However, doing nothing on your own is an assured way to get into trouble. I may be incorrect in this assessment, but if all of your income is going toward your kids’ college tuition and marriage rather than into retirement savings, you are doing things completely backward. Read Saving for Retirement vs. Future for Your Children. I know that being a parent is your prime responsibility.

However, aiding your elderly self in the future when you have “zero” active income is also important. There is no excuse whatsoever for you to not take every possible step to guarantee a comfortable retirement.

Understand that retirement is a once-in-a-lifetime event. Also, loans are not given to you for retirement.

To summarize, you are not being fair to yourself or your children if you believe that your children are your retirement fund. And you must act quickly to address it. You must act on this right now.

Perhaps it’s time to get your act together and make a solid financial strategy. I understand that you cannot concentrate on only one goal i.e. retirement. Our economic lives are multifaceted, with several goals vying for our income and savings: buying a home, saving for retirement, traveling, caring for elderly family members, and so on. Thus, do yourself a favor and establish yourself a good financial strategy rather than investing haphazardly here and there and ending up with a directionless portfolio that goes nowhere.