More on Spending Practices that will put you in Debt

Can you afford to live the lifestyle of your Parents?


In other countries, children who reach the age of 18 usually move out of their parents’ house and earn their own living.  In our country, children usually don’t leave their parents’ house until they are married.  In many cases, they even live with their parents even after they have gotten married and even when they have children of their own.

There are two points of view in these situations…those of the parents and those of the children.

The parents who keep their children with them even when they are already earning a living and/or have a family may be happy if they can bear the burden of the additional expense.  In some cases, the working children help in the family expenses in which case everybody is happy with the arrangement.  However, this may not be ideal when looking at the long term, if the parents are not able to save enough for the time when they can no longer work.  They will then be dependent on their children’s support and their children may be delayed in preparing for their own retirement.  This may sound ridiculous but remember the principle of saving related to compounding.  “The earlier you start saving and compounding your earnings, the faster you will get to your wealth goal.”

The children on the other hand, whether they continue to live with their parents or live on their own have to undergo three major hurdles.  First is to adjust to a lifestyle they can afford.  If they happened to have parents who could afford to provide them luxury, they have gotten used to that style of living.  Can they afford the same style?  For those who are blessed to have a big income immediately, what luck!  But for the others, they must remember that their parents had a whole life term ahead of them to earn their money.  They are just starting their own life term and have to earn their own future.

Second is not to get into any bad debt.  A bad debt does not bring in any income versus a good debt that either brings income or reduces expenses.  The tendency is to use credit cards to maintain the lifestyle.  Credit card debt, especially if incurred for consumption, is never a good debt.

Third is to remember to save for their own retirement even if they have to help support their parents.

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