Supporting your parents while overseas can be overwhelming. Managing your own finances is demanding enough, especially if you’ve recently moved to the United States.
With honest conversation and careful planning, however, you can support your parents without diminishing your own peace of mind.
Here are four tips to financially help your parents overseas:
1. Manage Expectations
Expectations are everything. When it comes to financial arrangements, it’s always smart to avoid assumptions.
Rather than letting unspoken expectations fester, try to create an open dialogue with your parents and family. For many people, money can be a thorny and uncomfortable subject. That’s why it’s necessary to start the conversation early and avoid stressful conversations down the road.
It’s essential that you develop a clear picture of your parents’ monthly expenses, their various income streams (if any), and the financial gaps that you and your family may need to cover.
It’s also wise to look to the future and get an accurate understanding of your parents’ long-term goals and expectations for retirement. If your parents are currently working, for example, how much longer do they intend to do so? And if they plan to retire, will they move to a new home or country? Or, if your parents are older and have pre-existing medical conditions, when do you expect they might need specialized care?
While it’s usually best to live “in the moment,” this is one of the rare exceptions where looking ahead can pay dividends.
Honest questions will help you manage expectations.
2. Protect Your Own Financial Well-being
It may not always feel like it, but your generosity towards your parents is evident. You don’t need to push your financial limits. That’s why it’s especially important to protect yourself from an open-ended financial commitment.
Be clear with your parents about how much you are able to provide, and take care to defend yourself from needing to be the “hero.”
You can only be a help to your parents—and anyone else—if your financial life is already in order. Once you know where you stand and can confidently fulfill your own financial obligations, you’ll be able to more freely assist your parents.
3. Recruit Siblings (& Extended Family)
If you have siblings and other family close to your parents, consider building a financial alliance with them.
Share the responsibility, and determine what each of you are willing or able to provide.
Even if you have the greatest financial leverage, it’s important to create a team-based approach to supporting your parents. If your career or economic situation suddenly changes, for example, you’ll want to be sure that your siblings and extended family can stay involved while you recover.
Don’t shoulder the burden of supporting your parents alone.
4. Maximize Tax Deductions
If your parents are U.S. citizens, resident aliens, or residents of Mexico or Canada, you may be able to claim them as dependents on your annual tax return.
According to the Internal Revenue Service (IRS), your parents must meet the following criteria to be considered a “Qualifying Relative.” While you can click to view the IRS’ full requirements, here is a brief overview of the rules:
- The person must be related to you in one of the ways listed under “relatives who don’t live with you” (i.e. a parent, father-in-law, mother-in-law, grandparent, etc.).
- The person must have a gross annual income of less than $4,200 (though the combined incomes of both of your parents can exceed this).
- To list your parent as a dependent, you must have provided more than 10% of the person’s total financial support for the year in question.
- Other persons providing more than 10% of the person’s total annual support must agree to not claim them as a dependent on their tax returns (in other words, only one sibling can claim their parent as a dependent).
If you and your parents meet these requirements, you will save significant money on your annual tax returns.
Again, you can click here for the full IRS breakdown on Qualifying Relatives.
At uLink, we are driven to help people support their parents and families. We know how overwhelming life can be, and we’re committed to making it easy to send your love home.
With great exchange rates and fees starting as low as $0, uLink helps you provide for your parents. Whether it’s supporting them financially by sending them money, paying for their bills, or reloading their phones.
Plus, after your 1st, 2nd, and 5th transactions, we’ll send you a $10 gift card to use at your favorite retailers. That’s $30 in gift cards after your first five transactions.
Miles from home — just moments away with uLink.