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How to Cope with the Responsibility of New Dependents

Any number of situations can leave you responsible for unexpected dependents – whether they be aging parents, grandchildren or nieces and nephews.

While unexpected caregiving presents some unique challenges, it can also be rewarding. Here are some considerations:

Update your financial goals. When you assume responsibility for new dependents you take on both lifestyle adjustments and additional financial obligations. A financial advisor can be a valuable resource as you plan for a new set of financial goals.

Look into financial aid for college early. People raising second families may find their dependents eligible for financial aid that wasn’t there for their first set of college-bound youngsters. Estimating the aid you’ll receive will help you plan for your share of the costs.

Consider different investments for various goals. Your new financial goals probably have different time frames and cash flow requirements. Investing money in separate investment vehicles for each objective will help you select investments suitable for your investment strategies. College for a preschooler, for example, may be a long-term objective that’s best pursued with stocks for growth. If your retirement is approaching soon, you might want to consider investing that portion of your portfolio in more conservative securities.

Maintain control of debt. Your best approach is to steer clear of new debt – especially long-term obligations. Consider what your new family really needs – not just its desires – when making major purchasing decisions that require substantial financial commitments.

Review options for parent care. Keep an open line of communication with parents who need your help. Reassess your situation frequently and involve your siblings in decisions you make on your parents’ behalf.

Don’t forget about yourself. While caregiving is a selfless act, you must continue to look after yourself – both emotionally and financially. You should make sure your retirement plan remains a high priority among your financial objectives.

Despite the challenges, many people raising a second family or caring for an aging adult report feeling a greater purpose for their lives. As your new lifestyle evolves, don’t forget that a sense of humor and a solid financial plan for the future may be the two things you can’t afford to be without.

August 2, 2001

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