The Cost of Unprepared Children (Business Mirror August 2022)

FINANCIAL literacy has been one of the main subjects that has to improve in the Philippines. Over the past years, it has been the same household dilemma: the idea of not speaking about money truths during family meals, as well as discussing financial planning even before marriage and even as a casual topic among families.

I joined the financial services industry in 2012 and I have encountered parents having to argue with Millennials and Gen Z children on how to manage their finances. However, I have encountered Millennials and Gen Zs who are now much more adept to financial planning because of the availability of information both offline and online and are now more active in discussing financial matters with their elders. But what is the cost of being prepared for your own finances without considering that you have aging parents?

I am fortunate that both of my parents were able to prepare for their retirement. But is it only retirement that is important?

My father, who has been hypertensive since his early 20s, eventually had diabetes mellitus at age 55 and an enlargement of the heart and prostate condition at age 60. My mom also had a heart condition at around age 40 and later on diagnosed with breast cancer at age 63. My father passed away due to cardiac arrest in May 2021 while my mom passed away in April of 2022; their passing away only 11 months apart. Imagine the stress and lifestyle they had in their younger years.

I remember my dad took an early retirement at age 60, spent a portion of his retirement for house improvement.

As a financial planner, I was able to find a way to discuss financial matters with my father who also wanted to get into business using his retirement fund. I told my dad that he needs to focus on his freedom and use his retirement fund according to the kind of lifestyle he desires during retirement. But if he really wants to get into business, I urged him to use only a portion of his retirement fund because retirement fund is meant for retirement and not for business.

However, during retirement, there are still bills to pay—utilities, Internet and landline connection, water—and food and other fixed expenses that will not stop even if a person retires or get sick.

A few months after my dad’s retirement he started to have severe prostate and cardiac issues, not to mention several visits to the emergency room, check-ups, laboratory work-ups and as well as angiogram and angioplasty that cost close to P1 million for an hour procedure. His monthly maintenance medicine cost P18,000.

So imagine how far his P14,000 SSS pension can go? Fortunately, my brother and I always talked about how we are going to help our parents in terms of augmenting their needs.

As adults with aging parents, a back up plan is still recommended because nowadays the cost of hospitalization is way higher than before because of inflation.

You are fortunate if your parents were able to set a side something for their health and retirement; it’s also a plus if they have a health and life plan. But from my personal experience, due to our parents’ severe conditions, my brother and I had to take out our savings and other investments because our parents were one or two hospitalizations away from going bankrupt.

As preparation, get a life insurance and health plan for your parents the soonest possible time. Since they are aging, be aware as well that it might be costly but there are a lot of available programs in the market today that are cash-flow friendly.

Also, given the time and opportunity, open an account specifically for assistance for your aging parents. As Filipinos, despite majority of our population going through the sandwich generation, we cannot afford to not care for our aging parents.

Another option is to speak with a financial planner as to how your aging parents will distribute their income, especially when they retire so that the retirement income will still earn enough to upkeep their lifestyle and lifespan. Regardless of the fact that they are aging, you also have a life to grow end enrich with.

Aside from money, being prepared also covers mental and physical preparedness. Things like who’s going to go with your parents during check-ups and procedures or who is gong to be with your parents if there is a hospital confinement. Who’s going to take care of your aging parents after hospitalization? Are you willing to be with them every day knowing that that their strength is not the same as when you were only 5 years old? Not to mention the leaves you have to take if you are currently employed. And, depending on your family’s situation, you might also want to run the cost of hiring a caregiver.

Being unprepared children costs more than you can imagine. My challenge to you now is prepare now while you have the best moment with aging parents.

Life is short and, before you know it, you are also an aging parent.

Jendee de Guzman is a registered financial planner of RFP Philippines. To learn more about personal-financial planning, attend the 96th RFP program this July 2022. To inquire, e-mail info@rfp.ph or text at 0917-6248110.

Link to business mirror article:

https://businessmirror.com.ph/2022/06/06/the-cost-of-unprepared-children/