The common goals in anybody’s financial plan revolve around saving for retirement, buying a house and funding children’s higher education and marriage. In the above cases, the goals are planned for. Uncertainties such as medical or vehicle repair expenses are also planned for through insurance. But there may arise some contingencies or financial emergencies that could turn your financial plan upside down.
Parents becoming dependent
A participant at one of my sessions, Priya, shared her unique situation with me. She is the only child of her parents and all was well, till her father suddenly had a stroke and became bedridden. While there was medical cover, it was inadequate to meet the medical expenses. Generally, I find that health covers for parents are in the Rs 5-10 lakh range and this amount is not sufficient for larger illnesses. As with most Indian families, her mother was not aware of their finances and it took some time for Priya to figure out all the investments and get herself added as a mandate holder/nominee. This was done since her mother is also not in good health.
Now came the more challenging part. The parents have their own home, but need to be supported financially, as the income from their investments is not enough to manage their expenses. Expenditures have shot up as they have a full-time caretaker, which not only means his salary but also his living expenses. Add to this the bill for the ongoing medical treatment. Priya is taking care of all the additional expenses, but this means she is no longer having enough to save for her financial goals.
Thankfully, she has a supportive husband, who doesn’t have a problem with her supporting her parents and is not cribbing about having to take on their family expenses alone. Also, they are debt free and hence do not have the burden of EMIs.