they are financially dependent on you, it can be tricky to cover all the bases. Below we will look at what you need to consider to make this work.
Deal with Expectations Upfront
Your parents may be under the illusion that you are living a golden life and can provide comfortably for them. However, the reality may be very different. Let your parents know how much you can afford to send them so that they are prepared for anything they need to do to make ends meet. It does not help to allow them to foster unrealistic expectations, or you will soon find yourself in financial trouble and unable to help them at all.
Start by looking at all the sources of income your parents have and what they need to get by. Work out the basic amount you need to supply to keep their heads above water. Check your own finances and be honest about your own unexpected expenditure like car maintenance and repairs.
If your parents are still to retire, estimate how much their own resources will cover their needs and what you will have to supplement. Make sure that your parents are clear about the monthly amount you can give them, whether you are able to provide annual increases for cost of living, and what additional expenses you can cover. Their health may deteriorate as they age, so consider if their home country provides free medical care or if they need insurance.
Get the Rest of the Family Involved
If you have siblings, are they in a position to contribute to your parents’ care? If so, you should not have to foot the bill alone. Even if each sibling provides an unequal portion, they should all provide according to their means. This will also prepare you all in the event that the financial circumstances of one of you changes.
Secure Your Own Finances
You should avoid going in with an overly optimistic amount that you can contribute. Take the time to thoroughly assess your own needs and what unexpected financial expenses may come to light. Look back over your expenses for the past two years. Unless you are able to cut back on something permanently, what amount do you actually have leftover for luxuries that you can forego?
Don’t commit to an open-ended agreement. Have a specific amount worked out and convey this clearly to your parents. Tell them when and what extras you may be able to help with and what they need to cover by themselves. If they are in a dire situation, you may have to cut back somewhere on your personal budget, but this should not get you into financial difficulty. Instead, go in with a smaller figure initially and see how well your budget survives before increasing the monthly commitment.
Tax Deductions
In some instances, you can claim for your parents on your income tax as your dependents. This would require them to be USA citizens, living in Canada or Mexico, or resident aliens. Here is how to identify if they qualify.
Practicalities
Distance will not prevent you helping your parents financially as you can send money online to them very easily. Determine the method that you will use and set this up. Thereafter, you simply have to complete a monthly transaction.
Your parents will welcome whatever assistance you can provide.
