Your ability to spend, whether it is for yourself or your parents, will depend on several factors. Among others, it will be decided by the size of your salary, the financial status of your parents, whether you stay independently or with them, and the kind of relationship you have with them. Irrespective of any of these factors, the first point you need to keep in mind the moment you start earning is to start saving. While it is natural to celebrate your newfound financial freedom by splurging on yourself, your family and friends, it is crucial to follow this important financial principal: save first, spend later. No matter how minuscule your salary, start saving at least 10-20% in simple savings instruments. Spend, on yourself or your family, only the amount you are left with after saving.
The next step is to prepare a budget and follow it religiously. If you cannot reconcile your income and expenses, you will be in no position to regulate your spending. Now let us consider the factors mentioned earlier. If your parents are financially comfortable and don’t need your support, you can retain your salary, buying them gifts occasionally or as per your or their desire. If, however, you are staying with them, it is best to discuss with them and start contributing a fixed amount monthly towards household expenses, whether they require your financial support or not. This will help avoid any feeling of guilt on your part about contributing towards your own living expenses.
It will also remove any ambiguity about how much you spend randomly on grocery or other household items with your money. If, on the other hand, your parents are retired with limited income or are financially not too well-off, it is best to come to an arrangement after discussing with them about how much you can help support the household expenses given the constraints of your salary. If you have a minuscule salary, your contribution in the above cases may be reduced significantly, but at least it will assuage any feeling of remorse about not supporting them at all.
If you are not staying with them, but living independently in the same or a different city, you can again send them a fixed monthly amount depending on their financial needs, and buy them gifts when you visit them. It is also important that you first take care of their basic needs before buying gifts. Secure them by buying medical insurance or making better investments for them, instead of random gifts like clothes or gadgets. Remember that your ability to contribute will increase over the years with your seniority, so do not fret about whether you are doing enough to help them. On the other hand, give equal weightage to your own financial security by saving and investing first.
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All of us have been in a financial dilemma when it comes to relationships. How do you say no to a friend who wants you to invest in his new business venture? Should you take a loan from your married brother? Are you concerned about your wife’s impulse buying? If you have any such concerns that are hard to resolve, write in to us at [email protected] with ‘Wealth Whines’ as the subject.
Disclaimer: The advice in this column is not from a licensed healthcare professional and should not be construed as psychological counselling, therapy or medical advice. ET Wealth and the writer will not be responsible for the outcome of the suggestions made in the column.