The Financial Advice Your Parents Gave You Is… Outdated. Here’s What to Do Instead (2024)

FAQs

What would be some of the financial challenges of being a new parent? ›

Many living expenses may increase, including grocery, clothing, transportation, health-care, insurance, and housing costs. You may also need to account for new expenses, such as child care, or adjust your budget to account for a decrease in your income, if you decide to become a stay-at-home parent.

Have an Honest Conversation. It's important to have tough conversations with your parents as they age. If the impact of their financial decisions is becoming a problem, sit down with your parents and siblings to discuss your parents' financial situation and how you can help.

Adult children who ask parents for money should plan for the meeting as if they were going to the bank for a loan, financial planners say. Don't just say you need money. Spell out exactly what it's for. Show that you have a well-reasoned plan for how to spend it.

In the United States, each state has its laws requiring children to take care of their elderly parents. In 30 states, an adult is liable for their old parents' care after they are unable to care for themselves. However, the statute establishing this filial obligation has never been implemented in 11 of these states.

Unexplained Bank Withdrawals or Charges. One of the most evident signs that your aging parents may struggle with their finances is unexplained bank withdrawals or charges. This could signify forgetfulness, confusion, or even financial exploitation.

Parents and caregivers should be alert to these warning signs that children are struggling with the stress of the family financial situation: changes in eating patterns; changes in sleeping patterns; increased clinginess or whining; regression, or a return to behavior characteristic of a younger child; increased fear ...

A: In most cases, if you are 18 years old and legally an adult, your parents do not have the right to take money that you have earned, even if they pay for your phone and related expenses.

Thirty U.S. states currently have filial responsibility laws that obligate adult children to support parents if they can't do it themselves. Filial laws require children to provide for parents' basic needs such as food, housing, and medical care.

And as uncomfortable as the thought is, asking family for money might be the right choice for you. The good news is, asking family for help doesn't have to be an awkward affair. In fact, a 2021study we carried out revealed 58% of over 75s actually enjoy helping out financially.

The key is to be calm, firm, and direct. Your number one goal has to be to create a plan that works well for everyone and gets your parents headed toward a better future. It would be best if you establish some conditions, such as financial transparency, to ensure you don't end up enabling their bad decisions.

Are you obligated to help parents financially? ›

Specifically, California Family Code section 4400 (“FC 4400”) states that, “Except as otherwise provided by law, an adult child shall, to the extent of the adult child's ability, support a parent who is in need and unable to self-maintain by work.”

A good financial plan—both for an elder and yourself—should include: A monthly budget with income and expenses. A budget for large capital expenses over a three-to-five-year period. A review of health insurance plan(s) for what is covered and what is not.

For example, people expect young adults to cover bills like cell phones, credit cards and car payments and insurance by age 20. But other costs, like health insurance and student loans, are not expected to be handled solo until age 23.