In Asian culture, family is the cornerstone of everything, including their approach to finances. For many Asians, financial decisions are made not just for themselves, but with the well-being of their family in mind. This means that they are often willing to sacrifice short-term gains for the long-term security of their loved ones. There is a strong emphasis to care for parents and elders as well as the next generation. In fact, many Asians will prioritize saving for their children’s education or their parents’ retirement over their own personal goals. This selflessness is a key aspect of Asian culture and highlights the importance of family in shaping one’s financial decisions.
It is not uncommon for Asians to take on the responsibility of financially supporting their aging parents, even at the expense of their own financial well-being. This can include providing for their parents’ living expenses, healthcare costs, or even financially contributing to siblings’ education or family emergencies. While fulfilling these obligations is driven by love and respect, it can strain personal finances, limit career opportunities, and hinder one’s ability to save for their own future.
I get it, parents work tirelessly to provide for their children’s needs and ensure they have access to quality education and opportunities for personal growth. In turn, the children feel a strong sense of duty to reciprocate this support by caring for their parents in their old age. The expectation of children to care for their parents and other family members create a cycle of mutual care and support that extends beyond financial aspects, encompassing emotional and physical well-being as well.
I’ve personally witnessed multigenerational households including my own. I’ve also seen those who had to file for bankruptcy because she was a co-signor of her brother’s business that failed. Not only was her credit ruined but she also had to work multiple jobs in order to help her brother pay off some debt. I also know of a couple that’s considering purchasing a two family home to move in with their young adult son. The couple’s logical thinking of course is to help their son with the initial logistics of buying a home and hoping that he’ll take over the mortgage payments. But what will happen if the son decides to move or sell the house?
Goal Setting:
I understand the previous generation really sacrificed a lot for their future generation to hopefully have a better life. Check out this video to hear some examples (It’ll be tough to finish watching dry eyed). And for this, I am grateful and will continue to care for my parents. However one of the goals that my wife and I have are to:
“Retire without the need to ask our kids for help”
It’s not that we don’t want them a part of our lives, quite the opposite. I just know the added stress one has knowing it’s their responsibility to take care of elders. Wanting the spend time and care is drastically different then NEEDING to spend time and care.
So by having this goal in place, it really drives our focus to finding ways to get there. For me it means:
- Build financial literacy – budgeting, forecasting, etc
- Spend on what’s truly needed or make us happy – it doesn’t matter what your W2 says. You cannot build wealth if you spend more than you make. Simple math
- Grow the retirement funds – We’ve written about the power of compound interest and the Rule of 72. I don’t claim that money solves all issues, but heck certainly helps a lot
In my humble opinion, having my kids know that they don’t need to support my wife and me when we’re older is a greater gift than us spending our life savings helping them buy their first houses.
