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In a blog published many years ago, I said that I was lucky that my parents didn't ever ask me for money.
If you are new to my blog or do not remember, here is the link to the blog:
How did AK achieve financial freedom?
However, I have also shared in my blog in recent years that I was providing my parents with financial support.
Sounds contradictory to what I said many years ago?
Well, my parents didn't ask me for financial support.
I offered.
The thing is if we are blessed with good parents, they usually try not to burden us, their children.
They might just tighten their belts or make some pocket money doing some part time work.
If we are good children, we wouldn't want to see our parents do that.
They have labored to provide for us children till we became independent and, in their golden years, it is our turn to make sure they are at least financially comfortable.
I believe that this is the least we can do as children.
Anyway, the catalyst for this blog was something I read online.
The author asked how much money did people give their parents?
He said he gave his parents 10% of his salary monthly.
The amount was $400 a month.
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| Source: theindependent.sg |
The blogging bug bit me when I saw that.
If the author's parents were relatively well off and he was just giving them a monthly allowance to express his filial piety, I think his method would be OK.
Method?
Yes, setting aside a fixed percentage of his monthly pay to give to his parents.
Otherwise, it seems pretty arbitrary to me.
It's like saying,
"Hey, don't say I don't give you any money, OK?"
Don't get me wrong as it is better than not giving any money at all.
It would be more meaningful, however, to find out what our parents' needs might be financially and if we could do more to help.
Also, simply giving parents money might not always be the best way to help them.
Helping them pay recurring bills might be a better idea, especially if we want to make sure that the money is being used properly.
Some people are just not very good with money.
Both the giver and receiver would have peace of mind this way.
Hopefully, not having to worry about recurring expenses, our parents would have sufficient resources of their own to take care of their daily expenses.
Otherwise, we might have to provide financial support to defray their daily expenses too.
Then, it might also be a good idea to set aside an emergency fund for our parents, especially if they do not have one.
Things do go wrong like they sometimes do and unexpected expenses do pop up.
Being prepared for a rainy day or, worse, a storm is never a bad idea.
So, what about me?
Well, I don't set aside a percentage of my passive income to give to my parents.
I also do not give them money monthly but I do give them relatively generous red packets on Father's Day, Mother's Day and their birthdays.
That's the only cash I give them.
I can hear some long time regular readers asking questions now.
Yes, in a blog which I published in August 2022, I revealed my updated budget.
In that blog, I said I would be setting aside $48,000 per year from my passive income to provide financial support to my parents.
Most of the money would go to helping them pay recurring expenses and the biggest ticket items are H&S insurance premium, property maintenance and property taxes.
Up until recently, recurring expenses also included mortgage payments.
Thankfully, the final housing loan was fully paid in 2H 2022 and I paid the legal fees to discharge the mortgage as well.
To be honest, $48,000 per year has quite a comfortable buffer as the amount I set aside for parental support was $40,000 per year before.
So, what about the amount in excess of annual red packets and paying recurring expenses for them?
Well, I could increase the size of their red packets henceforth.
However, being a worrier, most of the excess would go into the emergency fund I have set up for them.
I have blogged about the importance of having an emergency fund and how mine was big enough to cover 24 months of routine expenses not just for myself but also my family.
However, I have not blogged about how our emergency fund should also keep pace with inflation, if my memory serves me right.
If we have set up an emergency fund a few years ago and if we have not looked at it since, maybe, it is a good idea to check if it is still as robust as before.
If you are new to my blog or need a refresher, read:
So, how much money am I giving my parents in percentage terms?
Well, this number is going to be different from year to year since my passive income is going to be different each year.
My passive income for 2022 totaled S$205,999.
$48,000 is about 23% of that total.
To be sure, I am not telling anyone how much money they should give their parents.
I am definitely not saying that I am 10x better than someone who gives $400 a month or $4,800 a year to his parents.
We most probably have different circumstances and, in some cases, quite possibly, very different circumstances.
However, instead of asking how much money are you giving your parents monthly, perhaps, the author of the article which was the catalyst for this blog should be asking are you giving your parents enough money monthly?
I am going to take shelter now.
Just talking to myself, as usual.
Related posts:
1. Inflation, passive income and my budget.
2. 4Q 2022 passive income.
Bloggy Award
11 comments:
Good morning AK. Nice read in the morning during my train ride and thanks for sharing your thoughts. I think this is a question many have in their mind. By the way, which article are you referring to? Can share? 😆
Hi EX,
Good morning! :D
I provided the link to the article closer to the top of this blog.
It is under the screenshot of the article's title, bold black words in a white box.
Below that box, I provided the source of the article.
Hello morning AK,
It was a refreshing post, and a fresh break from the recent posts on personal investments. Other than making sure parents are financially comfy, also important that they have the social and emotional support from us children. Spending time regularly, chatting with them etc is something they would treasure.
Hi Yv,
I used to blog about such matters quite regularly.
Those days, my blog attracted a larger audience and also a greater variety of readers.
Quite often, I would get flamed.
Then, Facebook decided to be mean to me and that provided the catalyst for me to back away from blogging.
Took long breaks and spent more time gaming online. ;p
Glad you enjoyed the blog. :D
OK, logging off for now as I am bringing my mom out to lunch. BBL.
Hi AK,
thanks for sharing your thoughts on parental support in your retirement. You are one of the few that consider it, and I find your talks to yourself useful. Growing my income portfolio to include parental support is also a priority for me.
Money is already a touchy subject on it's own. It's hard to talk about it. lucky for me, my parents have accomplished the noble goal of being the last sandwich generation. They don't count on me for expenses, but I still give them money in the form of a big CNY red packet. I shall not share how much, just that it's enough for a few overseas vacations. It's fun money for them.
My parents have been sparse with details on how they handle their retirement funds. I'd prefer to do CPF top ups instead for tax relief, but they have not been agreeable. so cash it is. Seems like they want to retain agency over how they handle money, so I can only respect the boundaries. I often worry about scams or calamities befalling them, so I have to be ready to support them in the worst of times.
Hi zhenling,
As a worrier, I know what you are worried about.
Like you, I am worried that my parents might become victims of scams and, to drive the point home, I told them how a close friend's dad became a victim last year.
His dad kept telling him he would never fall for scams and that he was too smart for scammers.
Well, as it turned out, scammers were smarter than him or he wasn't that smart, after all.
His bank account was drained dry.
From your description, the red packets you give your parents are similar in quantum to what I give my parents.
OK, I know. Secret. Shh. ;p
As for doing CPF top ups, my mom is doing that by recycling the money CPF pays her monthly back into her RA on a yearly basis. I stunned like vegetable. O_o
Like your parents, however, my dad prefers to have cash in his pocket.
Recently, I convinced a friend to use some of his CPF savings to top up his mother's RA to hit $60K.
This means getting higher interest income, of course.
However, it also means he doesn't have to worry about giving his mother any monthly allowance anymore as her CPF pays her a much larger sum monthly now. :)
wah how does ur mom's CPF recycling work? pls share I'm curious.
Hi zhenling,
It is quite simple, really.
My mom has the Minimum Sum required for her age cohort in her CPF-RA and is under the Retirement Sum Scheme (RSS.)
Since she is in her 70s, CPF-RA pays her monthly and under the RSS, she gets quite a bit of money every month.
As she stays at home most of the time and doesn't spend a lot of money, she uses most of this money to top up her CPF-RA to hit the minimum sum again in the new year.
Apparently, she has been doing this for a few years now. O_o
OK, I went to dig up a blog from 2016:
Mom stunned at what happened to her CPF-RA money.
ROFL. ;p
I think for most Singaporeans, it is very uncomfortable to talk about money. that's why there is so much guesswork between children / parents as to how much is enough. I enjoy reading your articles, glad to see more articles from you lately!
Hi gagmewithaspoon,
I am glad you enjoy my blogs. :D
Yes, I have been quite busy moving money around in the last few months with interest rates so much higher.
Since I didn't get to be lazy as an investor, might as well do a bit more blogging too. ;p
Unfortunately, you are right on the topic of money.
Maybe, parents and children should attend "Evening with AK and friends" together and we can all have candid discussions.
Tear down the walls! ;p
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