Saturday, July 31, 2010

With rising public housing costs, don't depend on children for retirement

Children cost a bomb to raise. Major bombshells like tertiary education fees can be easily settled by having them borrow from the bank, not from your own retirement fund. Most people think they are free from the problems of rising housing cost if they already own a house. Not so if you have children.

Going by present trends of rising public housing prices and stagnant middle-class wage growth, by the time our children get married and are ready to settle down, there is a reasonable risk that they may come back to us asking for money to pay for their first house. This is possible even after maxing out the loans that they can take from the bank.

Even if they do not ask for money, what is clear is that parents can no longer rely on their children for financial support in old age if their own children are to be burdened with heavy debts of their own. In fact, parents should be thankful if their children do not transfer part of the debt burden to them by asking for help.

For the good of everyone, children should be educated from young that they should not expect bail-outs from parents when they are old enough to fend for themselves. In fact, they should not only fend for themselves but take care of us as well. Meanwhile, with accelerating inflation in basic foodstuffs and negligible interests rates for our savings, we should not forget our own aged parents who are suffering from rising expenses while at the same time being punished by negligible interest rates in their savings account.
Raise their allowance to protect them from inflation and cut the children's tuition expenses if you have to. This is how I would set my financial priorities.

People who spend a fortune on their children but neglect their own parents are making a gross miscalculation. When their children grow up, they will copy and treat their own children and parents the same way. Then, who's the biggest losers?


  1. In the first place, why did the prices of flats escalate that much? Some parents are benefiting from this hike but may not be their future generation.

  2. Rising asset prices may benefit parents now but will hit them back when children ask their parents for help to buy a home. The main beneficiaries are married couples without children as potential liabilities in such a scenario. However, what is a family without children?

  3. This article has been published two years ago and I can say that nothing but prices has changed. I have read news today: student fees have significantly increased. It would have been better to read about salaries growth, about student loans interest rate drop, about houses prices going down or even about a paydayloan service offering some better regulation. But it ain’t happening, because it would be improvements…exactly something that we do not have, something we so desperately require. So I can make a conclusion: things only get to look uglier and uglier.It is quite dificult to benefit from anything these days. Only government can do this.