Life Begins at 40*

I just watched the movie This Is 40. The movie is a good representation of how life is for middle-aged, middle-class families. It shows both the simple joys and difficulties of living in this generation.

What really struck me the most was the fact that Pete, the main character, was still giving money to his father in spite of all his financial problems. You see, Pete’s father, a senior citizen with no source of income, got a new wife and had three children with her through in-vitro fertilization. When Pete’s wife, Debbie, found out that he was still giving money to his dad, she became angry. Unfortunately, this kind of thing does not only happen in movies.

Sadly, such a scenario is quite common in the Philippines. In fact, I personally know some people who give a certain amount to their respective parents monthly. This is despite their being ordinary employees. Imagine the strain this arrangement is putting on their finances, especially when they start having children. In the financial planning-services industry, we jokingly—or morbidly—refer to them as “the sandwich generation” and the kind of setup mentioned above as the “Pinoy retirement plan.” This kind of plan or setup goes on and on as a vicious cycle. Because the sandwich generation is already setting aside money for their parents, they, in turn, find it difficult, if not impossible, to save for their own future. To alleviate this problem, let me give you a few suggestions.

First, you have to lovingly and honestly talk to your parents about your financial situation. This would include telling them about your dreams and vision for your own family. Make it seem as beautiful as you can. Normally, parents would always want the best for their children. Second, make your parents understand the importance and necessity of having an emergency fund, which I discussed in one of my previous articles. Conversely, many adults are also guilty of making their parents the source of their emergency funds. Third, impress upon your parents the indispensability of preparing for retirement by setting up a retirement fund. You can even respectfully use their own situation as an illustration if you don’t think it will be offensive to them. Fourth, and this is the most difficult part, is to tell your parents that in view of the foregoing, you would not be able to regularly send them financial support anymore or at the most, you would need to significantly reduce that support by at least half. Finally, help your parents think of ways to earn extra income, no matter how modest it can be. It can be a small sari-sari store, a business franchise, a consultancy job, insurance sales, or network marketing. Surely, if you have extra funds available, you can even provide your parents the capital required for investing in these new ventures along with the necessary guidance or retraining.

The point is, although it will not be easy if you do not possess the necessary skills to do it, preparing for one’s future does not only benefit the one preparing, but also his or her loved ones. In reality, it is very difficult for children to resist giving their aged parents support if they can see that the same are experiencing financial difficulty. So, even if the parents don’t demand it, the children could not help but provide financial support. Nevertheless, after all that has been said and done, there are really certain unavoidable instances and situations where we are left with no choice but to support our parents, such as untimely death of the primary breadwinner, critical illness and the like. In any case, the best thing we can do for ourselves and for our children is to adequately prepare for all foreseeable contingencies, especially loss of income. Remember, it is a better sight and feeling for parents when they know that their children are arguing over them because the children want their company rather than being passed around for being such a huge burden.

The assistance or guidance of an expert finance professional, such as a registered financial planner, is invaluable in preparing a suitable retirement or comprehensive financial plan. Attending seminars and trainings, such as the upcoming Financial Fitness Forum on March 30 at the Bayanihan Center, Pioneer Street, Pasig City, can help open your mind to things you never thought possible.

*This article was originally published in Business Mirror on February 22, 2016 but was updated to reflect current dates.

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