The good news is there are sound, proven strategies that can help. If you take the time to budget and explore all your options, you may find it’s easier than you expected.
Automatically fund realistic goals
You can only fill others' cups if yours is full to begin with. Spend time focused on your own financial well-being so you can help other family members.
The best approach is an organized one. Review your current monthly spending and create a reasonable budget that includes funding your retirement and emergency savings accounts. Determine how much of the remaining money can go toward other financial goals, like college savings and the care needs of an aging parent.
In an ideal world, you’d have the funds to reach all of your goals, but for most people, that’s not the reality. Whatever you can invest, do so with automatic savings and investment contributions so your money grows without you having to think about it every month.
Consider all of your resources
Any money you save on taxes can be invested toward your financial goals. In that way, many retirement accounts work double duty. Invest in traditional and Roth 401(k), 403(b), 457 and IRAs to reap tax benefits while saving for your future. For a child’s education, look to a 529 plan as a potential option. Consult a tax professional for personal guidance on minimizing taxes and maximizing savings.
While you might not get a federal tax break for your parents, the government does offer valuable assistance Opens in new window. Tag-team with other family members to research options and create a workable plan.
Consider supporting your family by identifying other avenues for aid like low-interest federal student loans Opens in new window. Your employer may have a scholarship program for your graduating senior or offer valuable financial planning for your aging parent.