Remittances and Black Tax 2: Dealing with and Living with Black Tax

Remittances and Black Tax 2: Dealing with and Living with Black Tax

Now that we know that there are historical reasons behind black tax –  YOU  can  STOP blaming yourself or feeling let down by your parents. Anger and guilt can do a lot of harm to the soul.

First step: Develop an understanding of your financial responsibility

Before you even have the big talk with the family about money (these rarely end well) do your math. If your family expenses are not fixed, then try to go over your spending over the last few years – itemize each expenditure and cost, for example:

  1. Health care for mom $200 every month or 6 months
  2. Rent for the parents -$200 every month
  3. School fees for your baby sister and or  niece $1,000 a year
  4. Agriculture inputs for gogo $300/year
  5. Groceries for the in-laws $500

Even if you are married, I would suggest doing this first part individually, then comparing your numbers and expenditures. You can decide on a plan together later.

Second Step: Evaluate each expense and prioritize 

  1. Is this a necessary expense? If I do not pay for it, will it ruin someone’s life?

One of our favorite married couple mentors sat my husband and I down and asked us this question. Is this an expense that we need to be taking care of? Are you the only person who can take care of your niece’s tuition? What is the situation with the parents? If they are not late, are the parents in a position to make part payments for this expense or another?

  1. Rank the expenses in order of importance

You cannot cover every expense. You have to be honest with yourself about what you can afford and what you need to be paying for. If an expense is sinking you into debt, cut out other expenditures. You are the only one who can tell you an honest story about what it is that you can afford

  1. Cut out any frivolous expenses

My husband and I realized that we were paying for a lot of things that we shouldn’t have been. I also spoke to my therapist because one time I was feeling overwhelmed, and she said – people will never stop asking for money. You have to say no. I no longer give people cash for leisure trips. I cannot afford to pay for every church trip or kid’s school trip. I also no longer provide start-up funds for business projects because as my therapist gently reminded me – I am not a bank.

A lot of diaspora friends have lost a lot of money to half baked ideas that sink your money. But this is something that you need to decide for yourself.

  1. Decide if you are giving someone a loan or a gift.

Third Step: PLUG IT INTO THE BUDGET

Now that you know your black tax/remittance responsibilities plug the numbers into your budget and treat that number like any monthly bill. If the money you spend ranges from let’s say $100 to $500 then you want to set aside maybe $250 each month. THESE FUNDS ARE NOT PART OF THE EMERGENCY FUND. You know you will spend this much so set it aside.

If you are consistently going over budget, you will need to adjust some things in your budget to make this bill fit into the equation.

FOURTH STEP: Family talk (only and only if you need to)

If possible, you may want to have an honest conversation with your family about how much you can afford to give them each month.  I will write a separate post with a step by step guide on opening up this kind of conversation. It does not have to be a big thing, and not everyone in the family needs to know your plans. I discussed my ideas with my mom, and that was it.

LIFE HAPPENS:

Because life happens and sometimes, we need to spend a little more – I keep what I call a Zimbabwe emergency fund. I put in $30 a month in one acorns account just for this and minor emergencies.

I do not have a foolproof plan for dealing with back tax, and I still get shocked once in a while– please share your tips for a remittance/black tax survival.

Remittances and BLACK TAX – PART 1

Remittances and BLACK TAX – PART 1

Do you FINANCIALLY support your parents?

Do you FINANCIALLY  support family e.g. siblings, aunts, uncles?

Do you get FINANCIAL  support from a family member?

Do you send money to someone monthly or a few times a year?

If you answered yes to one or more of the above then you should read this post on remittances and black tax.

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Some Background

I have been working on this remittances and black tax series for a long time. Black Tax has become a buzz word/phrase since Trevor Noah’s book, but the concept of remitting money back home or supporting parents, siblings, and extended family has a long colonial history. In this first post, I will trace the historical nature of black tax in our communities, particularly for those who come from settler colonies like Zimbabwe and South Africa. The same historical factors are also at play in many marginalized societies around the world.

Most people think of black tax and or remittances as a burden. I get the mental image of someone pushing a heavy load that gets passed on from generation to generation. This mental image is not entirely wrong if we consider the political and historical factors that have made it difficult for most racial minorities or indigenous people to build wealth- even many decades after the end of formal slavery or colonialism.

I do not discount the role of bad financial habits in failure to build wealth, but mistakes and poor habits alone do not explain why millions of people remain in poverty. A lot of hardworking people in the diaspora have good habits, but the weighty responsibility of providing financially for immediate and extended family makes upward mobility a little bit harder.

Colonial Legacies

If you follow me on social media (sorry) or even speak to me for a minute, you will know that I absolutely love Tsisti Dangarembga’s Nervous Conditions. I have dubbed it my book for every condition. So, when I first started thinking about remittances, I thought back to a comment one of my students made when we read the book for class. She said – dang babamukuru was taking care of everyone! But something else that struck me and we know this to be true is that the best profession for black folks in colonial Africa was to become a teacher. Then maybe a lawyer who spent most of their time defending activists against brutal dictatorships. Babamukuru, like many folks in his generation who were also gifted academically, understood that the success of black men (forget women) had a limit. I am quite lucky that I have older parents – my mom had me in her mid to late 30s (which is not old!) but quite atypical. My older siblings are between 12 and 17 years older than me. Most of my peers have younger parents. I also had a guardian who was born in 1926 Rhodesia – he was brilliant – taught me to read a newspaper at just 5 years old – but like many his generation for a long time the best he could do was become a teacher.

There is nothing wrong with being an educator – the problem is that in settler colonies or even in the U.S black people were told that this was the limit. If you have not yet read Hidden Figures, please do so. Black people were also told where to live and how to live. Black people lived in reservations where the land was often arid and agriculture not nearly as lucrative. Families worked really hard to send one or two kids to school. Those two kids, if they were lucky, would manage to get a job in the city, and it became their responsibility to take care of their parents and fund the education of their younger siblings.

The discriminatory housing structure in urban areas also fed into black tax. The black areas were designed to accommodate single men. You can probably see how this type of structure also damaged families. Young couples lived apart from each other for months with the husband working in the city while the wife and kids lived in the village. The men working in the town would often travel back home at the end of the month with gifts and goodies not just for their growing families but for everyone because their success was everyone’s success.

In the 60s and 70s, black people would slowly start moving into the urban areas -mostly into high-density parts of the city. My parents bought their first house in Mabvuku in the 60s. In the 70s they would move into a rental in the new leafy suburbs. My father says they were evacuated within 24 hours when the landlord came for a “check-in” and found more than 20 people in the house. He had assumed that it would be my parents and their 3 children (I wouldn’t be born until after independence – lucky me). My mother has a different recollection, but she also agrees that the house was packed. My parents are the oldest siblings in their respective extended families, so their MANY young siblings (and cousins) had joined them in the city. This NEVER CHANGED much to my distress.

My parent’s story is the story of many of your parents and maybe grandparents.

Independence – UHURU! We are FREE

Just kidding not really-in some ways the economic structures would positively change after independence but not that much. The biggest employer in Zimbabwe and many post-colonial states was the government. The post-independence era should have eased the financial burden on those coming of age in the 80s, but it was not so easy. Indeed, many could now support their parents in the village with less hardship, but it remained the responsibility of older siblings (often raising their own kids) to send the younger ones to school. Life was not too expensive back then, so it was manageable until…

Wait a minute – the WAR was not over – Ghukurahundi

As most families moved on from war and began rebuilding their lives, our friends and families in Matabeleland continued to live in the thick of war. Breadwinners died, young men and women fled home before they could finish their studies. Many of the orphaned children would never enter the mainstream economic system. And thus, many in Matabeleland remained in poverty and black tax has real and long term implication for those who have made it.

ESAP- Hello World Bank 🙂 Structural adjustment programs

I have a lot of respect for the hardworking people at the World Bank. I worked there for a few months and left with a lot of new insight on what the Bank does well and where it fails. ESAP was a total failure.

By the 90s my parents had been living in Hatfield for over a decade. My parents were elders in the neighborhood and often adjudicated various issues, including marital disputes. Being the only kid in the house at the time, I was always included (not quite but I could hide behind sofas pretty well- I can hold my breath for a long time) in the discussions. One time, this girl came to report that she had had her ear beaten off by Mai Nhingi whose husband she was having an affair with. It was a bloody affair – literally.

During ESAP, as our government was forced to adjust the economy, a lot of people lost their jobs. There are some valid reasons for why the Bank forced Zimbabwe to do this, but the damage was intense. Quite a few people in Hatfield, which was once home to some of the first black middle-class families, lost their homes. It was sad. When a single person lost their job, the domino effect was felt all the way into the rural areas. To make matters worse, we also suffered a bad drought that season.

When it rains, it pours -HIV?

As if things weren’t already bad – HIV was like drought, ESAP, please hold my beer! I disagree with a lot of the western literature that claims that HIV was a rural disease. People became sick in urban areas and died at home in the village. In Zimbabwe alone, more than 2 million people died. Many of them were young, educated, metropolitan, professionals, and BREADWINNERS! Their children became the responsibility of their siblings or aging parents. Whatever pension or life insurance benefit, most of them left was eroded by inflation in the 2000s.

POST-2000- Land reform, Murambatsvina, 2008

The reason we know that land reform was just about ZANU PF is that the leadership did not crunch the numbers. While much of the conversation has focused on its impact on white farmers, it was the majority of black folks who suffered. Farm workers who did not have an economic safety net and those who lost their jobs as various industries that benefited from agriculture shut down. No doubt land reform was needed, but the focus back then was to bolster ZANU PF not benefit the masses. Just as with the war veterans $50 000 payouts. A reasonable economic position would have been to build homes for war vets and provide free education for their children + health care and support small business initiatives.

Murambatsvina displaced over 700 000 urbanites. May I recommend the Audacity of Hope for a good read on this. Many of those displaced were breadwinners. Many people lost access to ARVs – many children dropped out of school.

Each cycle of political violence would reduce the number of breadwinners, and weaken the socio-economic fabric. The few who managed to emigrate would find themselves shouldering the financial burden for those who were left behind.

USAP is one of my fav scholarship support programs in Zimbabwe. Please donate to edmatters because they do good work and Rebecca Mano is amazing. At some point, it became the rule that siblings of former USAP students could not apply to the program. The brilliant idea behind this proposal was to get new families into the system, and one hoped that those siblings now situated in America would help their younger siblings apply. This would not happen in a relatively stable economy. We would not expect a 21 year old to shoulder the financial responsibility of their parents and their siblings, but this is our reality.

I could go on, but you would stop reading- come back for part two.

 

 

 

 

So how much will I actually take home?

So how much will I actually take home?

When I got my first full-time job, I was excited by the salary bump. Our graduate school stipend was just $15,000. I have discussed this before …

A friend was asking if there is an easy way to calculate your take-home salary and there is. You could ask payroll, but in my experience, they tend to get annoyed by such questions.

Here is what you will need to use online take-home pay calculators

  1. Cost of pre-tax contributions towards health, taxes, life insurance, retirement,  commuter plan, etc. Most of these are detailed in your benefits package Image result for benefits package health care
  2. Post-tax contributions: Other retirement contributions or work lunch etc

Once you have the numbers, you can use this handy tool to calculate your take home

https://smartasset.com/taxes/hawaii-paycheck-calculator#q=take%20home%20ca

 

I played around with taxes in different states – Hawaii is lovely but those taxes – oh my

 

Moving Expenses

Moving Expenses

New Faculty Hire friends (like me) or anyone moving for a new job -just a reminder that “for tax years 2018 through 2025, the deduction of certain moving expenses is suspended for nonmilitary taxpayers”(IRS). Employer reimbursements/allowances will be taxed as income, so plan accordingly.
Image result for moving cost
For example – let’s say you get a job in CA and you’re moving from GA- If the Uni gives you $20,000 moving allowance the $20k is considered taxable income. So if the tax rate is 35% you only have 20k-(35% of what you need) for moving – this is important for avoiding future financial stress. Ask your employer if they will gross up. 
Here are some costs to consider related to moving DIY or hiring a moving company
* IMPORTANT: Do not be the friend who asks friends for moving help unless you are in grad school or undergrad. Moving sucks – unless folks volunteer do not do it. 
  • Moving companies tend to charge anywhere between $115 and $200 per hour for packing and any moving help
  • You may have to pay extra for boxes – I was recently informed that if we do not have the original box for our TV, we will need to pay $25
  • You may have to pay extra  depending on the set up of your new home so you will need to have all that information ready before you sign a contract with a moving company
  • If you are going the DIY route compare costs of various companies UHAUL, PENSKE, and some car rentals, e.g., the enterprise now offer moving trucks
    • You want a truck with moving rails
    • You will want carts * spend the extra $ your back will thank you later
    • Get a truck one size up than what you think you need
  • Car Movers – If you are moving from one end of the country to the next, it might be cheaper to have your car shipped. Then you can fly to your new home. Do the math on gas and fatigue + lost love if you will be spending 20 hours in the car with your family.
  • Storage- depending on your situation, you may need to store some things. Costs range from $50 to $200 per month depending on size and location
 
https://www.irs.gov/publications/p521#en_US_2018_publink1000203444
Immigrant Professional- RETIREMENT IS COMING- ARE YOU READY?

Immigrant Professional- RETIREMENT IS COMING- ARE YOU READY?

RETIREMENT IS COMING

SOURCE: GETTY IMAGES

ARE you thinking about retirement? I know it sounds crazy if you are in college, in your 20s or like me in my early 30s. But no matter where you are on this journey you should be thinking about it. If you are in your 40s, 50s or 60s maybe retirement feels a little close, and you are feeling worried. Worry not – as long as you start planning today then you are not late or too early. Depending on where you are- your strategies will be different.

TARGETED AUDIENCE: Everyone with a special focus on the immigrant professional. You probably asked yourself-what the heck is a 401k anyway?

NOTE: This post is about regular retirement goals (after 60). I love the FIRE movement (Financial Independence Retire Early), but I am not sure that is for me. I have however learned a lot from the movement, and I encourage you to read as much as you can from them. FIRE folks aim to retire as early as 29 or 39. To meet those goals they live on less than 25% of their income and make so many sacrifices.

SO HOW DO I GET STARTED?

Bonus disclaimer: To prepare for this post I had two phone calls with financial advisors from our retirement management fund- you can call anytime and its free (double check to be sure), I also spoke to my bank then two financial advisor friends who donated their time. The advice was pretty consistent across the board which made me feel confident to write this blog. I have also been reading a ton of books, blogs and I LOVE reddit. However, there is a lot I do not yet know so please correct me and share knowledge from your experience.

How much do you need to retire? It depends on your current budget– you will need about 85% of your current income in retirement. Some advisors say this amount may even be too little because retirement lifestyle can be expensive.  Enjoying retirement might include traveling more (without company reimbursement), and I don’t know about you, but when I am home, I eat more and shop more. At the same time, you may already be living a debt free life – No mortgage and no debt! PAY OFF THAT DEBT! BUT our kids might need more financial help, so there is that –

BEFORE we get bogged down with numbers, let’s think about the different ways available to us to save for retirement. Younger readers- I wish I had started saving in college or early 20s. You are at the best stage to start saving. I promise 🙂

Dave Ramsey, Nerd Wallet and a whole bunch of other money smart people say you should put at least 3% of your income towards retirement. However, 15% is better – but since many of us are still starting just putting something is good. My very first full-time job did not offer me an employer match or contribution so after doing my budget and looking at my debt I could only contribute $100 each paycheck. I worked that job for two years; the employer fund had great returns. I recently checked the account in preparation for this blog and my very small contribution has grown to $6,000. Just this quarter alone I made gains of $745 – YAY! I anticipate some losses in the next few years, but I am sure it will bounce back.

SAVING FOR RETIREMENT WITH EMPLOYER-SPONSORED (pre & post-tax) PLAN 401/403/IRA

  1. 401 (k) or 403(b) This is a pre-tax invest plan offered but employers. Breaking it down:
    1. Safe harbor Some employers put in money into your account whether or not you make any contributions. This is called a safe harbor contribution. These are rare but quite common in higher education. Yay to academia. The various schools I have worked for have each offered anywhere between 3 percent and 9 percent just because I worked there.

So, let us say Chipo earns $50 000/year and my employer safe harbor is 3% – each year her employer will put in $15 000 annually into her retirement plan. This is an additional benefit to your salary.

If Chipo does not add anything else according to this  401(k) calculator, she will have  $232k for retirement at the age of 67 with a 6% rate of return.

  1. Employer Match: A more common plan is one in which the employer says if you put in at least 3% of your income, we will also put in 3% this would be a 100% match. Nice. So, you put in 3% and get 3% in free money- a lot of young people lose out on this benefit because they do not put in the minimum required to get the match. Others say they will match up to 3% so if you only put in 1%, they will put in 1% if it is a 100% match.

Back to Chipo with $50 000

3% self-contribution  will be $1500/year

3% employer match $1500

Assuming a 6% rate of return starting at the age of 33 with $0 savings so far, she will have $445k in retirement. By putting in just 3% of her income, she has doubled her retirement funds.

  1. My fav situation is when you have both the safe harbor and the match. The lingo is a bit complicated- you can read more here. At a few universities, the contributions look like this

Your employer  will invest safe harbor   3% regardless of what you put in

Your employer  will then match up to 3% of your investment

You will put in 3% into your fund

Nice! Under this plan, you will get 9% invested towards retirement.

 Assuming a 6% rate of return starting at the age of 33 with $0 savings so far, she will have $697k in retirement. This is the BEST!

Benefits of a 401(k) fund

  1. Tax benefits: If you max your pre-tax contributions to the allowed amount for 2019 which is $19 000 for those under 50 and an additional $6,000 for those over 50.

You will only be taxed on (annual income-tax contribution). This includes an employer contribution.

  • You will have to pay taxes after retirement – this is when a ROTH 401(k) might look a bit more attractive.
  • How do I know what plan is best? Let your budget inform you. There are seasons when you want to reduce your tax bill by contributing more.
  1. Shelter from creditors- Most plans offer creditor protection.
  2. Employer matches and contributions – discussed above. Most employers do not contribute to post-tax contributions.
  3. Secret: You can withdraw for certain things with no fines. For example, you can withdraw money towards your first home payment up to $50k and for a medical bill. I am excited about this option (my financial advisors were too). Most of us do not have access to family loans for that first house or substantial medical bill, and this is a nice option to have. You will pay yourself back with interest, and you may lose out on returns during the time the money is out, but you can also avoid ridiculous interest rates. It could be a win-win with the right kind of research and planning. -plans differ on this so please do a double check.

Downsides of a 401(k) fund

  1. Taxed at withdrawal – you could be in a higher income tax bracket at retirement
  2. You can only start withdrawing at age 59.5.
  3. Fines for early withdrawal for unspecified reasons.
  4. Some plans have high fees. Do check with your retirement plan about the associated costs. I received a tutorial from TIAA to understand my fees, and so far I am happy with what they offer. Almost every fund has fees so you should not let this derail you too much.

A Roth 401(k)

With the Roth 401(k) you get can still contribute the same max of $19,000 but after tax. This means that when you withdraw your money in retirement, you will not owe taxes (except on the interest). This is a good option if you are in a position to pay a higher tax bill- probably great for younger folks who may have lower responsibilities early on in their career.

HSA – HEALTH SAVINGS PLANS

SOURCE: GETTY IMAGE

 

This is a little-known secret. It is a great tax-free way to save for future health expenses during your healthier years. Your employer offers you two or three health care plans. One has low monthly payments and higher out of pocket (HIGH DEDUCTABLE). There is usually a max for what you pay out of pocket with either plan so you will not be entirely stranded. This plan allows you to add $3, 500 for an individual and $7, 000 for out of pocket costs. Some employers will also contribute to this plan – some make a 50% contribution which is very nice. The money will grow with interest. You only need to use the funds for health care expenses, and they roll over from year to year.

Your plan will give you a list of what is approved.

I set aside $500 for our family of two the first time I played around with this. I have been able to pay for co-pays, acupuncture herbal tea, some cold medication. I have a debit card linked to the account. If the purchase is not approved, it makes a huge BING sound lol.

Keep your receipts. You can ALWAYS submit for reimbursement.

Other things with health care: Check if your plan covers things like a gym membership, yoga- you can tell I love yoga. I go every day for two hours when I can. The costs can add up quickly.

POST-TAX CONTRIBUTIONS

401(K)

Same as pre-tax but after you have paid your tax bill. For 401 the max is still $19,000. This is an option if your employer does not offer after tax.

 

Roth IRA

In contrast, Roth IRA contributions are made with after-tax dollars. That is, they don’t reduce the amount of your gross income, or your tax bill, the year you make them. The tax benefit you get comes at retirement, when you don’t owe any income tax on the money you withdraw from your Roth IRA—because you already effectively paid it, back when you contributed.

If you withdraw after the age of 59.5, then there are no fees associated with the withdrawal or penalty. This means you get access to your money a whole decade earlier than with traditional 401k.

Summary 

PRE-TAX – You reduce your annual tax bill by however much you put into the pre-tax plans. You will pay tax in retirement.

401(K) elective deferral plans – you can put in up to $19,000 for 2019.

HSA- If you have a high deductible health plan  you can put in $3,500 for an individual and $7,000 for a family

POST-TAX

IRA: this is the more popular plan-you can contribute up to $6,000 per year

 

 

 

DISCLAIMER: MoneyProfessor is my personal blog. I provide general information – not professional or financial advice. Opinions and representations on are my own. I am not providing financial advice or legal advice on my blog. I am only providing general information. You should consult a professional before making any financial or legal decisions.

 

 

Financially Planning to Care for Elderly Parents (or parents in General)

Today’s post was unplanned. I was thinking of finishing up a series on remittances and black tax but something a friend said has been nagging me. I had written to ask if White Zimbabweans/Africans also deal with black tax. In her response, she shared that she and her siblings were starting to discuss post-retirement help for their aging parents and grandparents. Like most parents in Zimbabwe, they too have lost their retirement and their pension is no longer worth much. My friend shared that her parents were able to assist her and her siblings through college allowing her to graduate without any college debt.

Caring for parents is not black tax

While my mom did not pay for my college, she did invest a lot in my early education. I believe this set me up to get full scholarships for college which also allowed me to graduate without debt. My parents in law also did the same for their 5 boys. Perhaps it is that I will be spending a bit of time with my mom in the next few weeks or that I am seeing that my young girl is no longer so young and I would love to see her work less, travel more, do more fun things and relax. My mother as I have mentioned many times was a trader and has worked really hard her whole life. In fact, this month marks the first time that mom has been able to take a week off from work. Imagine that!

I am sure you have many feelings about your parents as well and perhaps like me you are also beginning to think of how you can support them towards retirement. I have been asking myself how I can financially include care for my mother in my financial planning. I am lucky that my mother lives in a country with some type of pension fund for the elderly, but that amount is very little. My mom and I have many open money conversations, so I feel confident knowing what she needs on a monthly basis.

The list of the ten best countries to  live for the elderly does not include any African countries.

So, for those of us with parents on the continent or other places with less secure pension funds we will need to start planning earlier in order to be able to support our parents. We really want to be in a place where we can provide care with a lot of love and very little strain. Most parents are also a little reluctant to discuss these issues because talking about money is hard and it is probably harder if we feel like the people, we love and cared for  think we have become a burden. So, do be gentle and kind, in your thoughts and in the conversation when you are ready to have it.

What are some things to think about as we plan to care for our parents?

  1. Food, utilities and other everyday expenses: Do your parents have enough finances to cover everyday finances? How much is their budget for food and utilities?
  2. Health Care: If your parents do not have health insurance through work or the state you want to make sure that you get on this ASAP
    1. Do they have any prescription medications that they need regularly? What is the cost for that? Is this something that they can afford without your help if not, have you included their care in your monthly budget?
    2. Those of us with parents who insist on working will need to very vigilant here. Our health care plan for mom in law includes good orthopedic shoes because she refuses to REST!!!!
  3. Life Policy/Insurance: You want to make sure that you have some life coverage policy that includes your parents if they do not already have one.

 

  1. Mortgage/living arrangements:
    1. Is their home paid off? If not, what is the monthly mortgage/rent payment is this something that they can afford without getting into debt or will you need to assist them?
      1. A dear friend dealing with this told me that it is really important not to abruptly move parents simply because we think place B will be cheaper. As people get older their community is really important, friends and a shared history go a long way in keeping a healthy mind and healthy heart. When I had this conversation with my mom, I realized the importance of her being near her church, volunteer centers, small jobs and friends. Mom’s weekly lunches with friends and singing in the choir keep her calendar somewhat full and this is critical.
    2. Do you need to make any modifications to their home? When my dear late grandmother was getting on, we had to change the bathroom and bedroom furniture to accommodate a supportive bed and wheel chair. Even in the U.K. which has public health care, this is something we had to pay for. My grandmother in law whom I adore is no longer as fit as she once was. She still loves to hike up the little Masvingo hills to do her farming – this gives her much pleasure but strains her back- we have been investigating walkers that can get her up and down. If you have any suggestions send them my way – PLEASE – we love that she loves farming, but we love her more than the yummy goodies she harvests.
  2. DEBTS – You will want to know if they have any outstanding debts that have to be taken care off. It will be awful for the parents to lose their home over small amounts that you could have helped cover
  3. TRAVEL- Parents and seeing their grandkids is a whole mission. While my husband and I do not yet have kids, I have 9 nephews and nieces and my mother would like to see all of them. Obviously, those with children will need to cover the cost of travel for the parents – if this is you then you will have to decide how often you will want parents to travel or to go and see them and the associated costs. If your parents live with you, they may still want to travel to see the other kids or go on social trips. In our case, we have tried to budget for travel to the US for both sets of parents over the next few years. DO NOT FORGET TRAVEL INSURANCE!
  4. WILL & OTHER ESTATE PLANNING
    1. Do they have a will? This is not an easy conversation to have but it is important.
    2. Do they have an up-to-date durable power of attorney for finance?
    3. Do they have an up-to-date durable power of attorney for health care?
    4. Does their health care power of attorney contain a health-care directive that spells out their wishes for life-prolonging care?

Planning with siblings

If you have siblings, you may want to sit down as a team and discuss these issues. I know that this is not always possible because of family dynamics. In an ideal situation, you may want to divide the various responsibilities amongst yourselves.

LOVE FIRST

Remember that this conversation (even when you have it with yourself) must come from a place of love and thoughtfulness. Tell your parents that you love them as often as you can.

DISCLAIMER: MoneyProfessor is my personal blog. I provide general information – not professional or financial advice. Opinions and representations on are my own. I am not providing financial advice or legal advice on my blog. I am only providing general information. You should consult a professional before making any financial or legal decisions.