The Ultimate Parenting Sin: Not Saving for Your Retirement

Like any other parent, I love my children a lot. However, unlike many parents of today, I actively choose not to indulge my children. This is not because we cannot afford these expenses. Rather, it is a conscious effort that my husband and I are making to avoid going overboard with trying to meet every whim of our children. Instead, we are choosing to prioritise our retirement.

By doing this, not only are we preparing financially for our golden years, but also giving our children the chance to learn first-hand the importance of savings and judicious spending. In fact, research from a study suggests that parents can play a role in the retirement financial well-being of their adult children by helping them develop retirement savings values.

Why retirement specifically? Because I believe that one of the biggest parenting mistakes any parent can make is to not plan for their retirement. 

Do Not Ignore Your Own Financial Needs

I had a comfortable childhood. My siblings and I have been fortunate to have such loving parents, who made sure that all of us had everything we needed and more.

Maybe because they both led difficult lives themselves that they were on a mission to ensure that their children – my siblings and I – did not have to go through the same hardships that they had faced. My parents toiled hard to give us the best they could in life.

However, in doing so, they neglected their own needs and ended up not planning for their retirement. This now means they have no savings and are mostly dependent on my siblings and I for much of their financial needs. While we are happy to help them out financially at this stage of their lives, it does undeniably add weight to our own financial responsibilities. It has also made me realise the urgency of planning for my own retirement so my husband and I will not be financially dependent on our children in our later years. 

Review Your Spending to Minimise Unnecessary Expenses

I admit I was guilty of having splurged on unnecessary clothes and toys for my son when he was an infant, one of my biggest parenting mistakes. He is the first-born of my two children and this was probably the reason, both my husband and I were overly excited to prove ourselves as the best parents. But to whom? Our child was too young to understand anything!

Children outgrow clothes in no time during their growing years, which means buying expensive and branded clothes only adds up to wasteful expenses. Similarly, once the novelty of a toy wears off, children start playing with nick-nacks lying around the house.

The expensive clothes that we bought for our son were hardly used twice or thrice. Same for toys, as he would prefer playing with cartons and boxes at home once he was bored of something new and shiny.

By the time our daughter was born, we had become wiser and stopped wasteful expenditures. So, even though it is within our means, we do not buy everything that our children demand or choose the most expensive options for them. Instead of focusing on material things, we emphasise on experiences and spend quality time with them. For instance, when our children were still toddlers, we would just play games or go for a stroll in the nearby park every evening. We also encouraged them to look for options that were more creative and less costly. Similarly, when it came to toys, instead of buying actual toy castles, we upcycled boxes or cartons lying around at home to help them make their own castles.

This has allowed us to enjoy the best of both worlds – strengthening the bond with our children and saving money that can instead be used to secure our financial future.

Inculcate Good Financial Habits in Children

I believe it is important to take care of our own financial security first as it will help to rationalise the demands of our children and also teach them the importance of saving. A survey found that six out of 10 parents jeopardised their retirement plan and savings in order to help their kids pay the bills. However, research has suggested that if parents do a good job teaching their children about money, these children are more likely to have healthy financial behaviours like saving and budgeting. Moreover, it will enable them to make do with less – which can come in handy when they face the ups and downs of life on their own in future. It will also teach children the art of problem-solving and encourage them to think out-of-the-box.

Having said that, it is not to say that you should not indulge your children at all. Occasional treats to celebrate their achievements or significant life events and special occasions such as birthdays definitely call for some indulgence.

Exploring Varied Parenting Philosophies

While I do advocate for a balanced approach between fulfilling children's needs and preparing for retirement, it's important to acknowledge the diverse parenting styles that exist. Some parents, driven by a desire to provide immediate joy or to compensate for what they lacked in their childhood, might focus heavily on meeting every demand of their children, which could be seen as one of the biggest parenting mistakes in the long term.

This approach, while well-intentioned, might inadvertently lead to situations where parents have no retirement savings, placing unforeseen burdens on both the parents and children in later years.

On the other hand, there are parents who believe in the philosophy of providing the best for their children, regardless of the cost. They might prioritise education, extracurricular activities, or material comforts, with the hope of giving their children a head start in life. While this can offer short-term benefits and satisfaction, it may not always translate into long-term financial stability for the family.

This approach underscores the need for a well-thought-out parents' retirement plan that balances present-day desires with future security. Understanding that there isn't a one-size-fits-all method of parenting, it remains crucial for parents to consider the potential consequences of their financial choices, particularly in how these choices impact their ability to sustain themselves in retirement.

Plan Your Retirement as Early as Possible

I may come across as a strict parent who does not believe in giving my all to her children but together with my husband, we make every effort to provide our children with a stable and happy atmosphere at home, which we believe will help them to blossom into responsible adults.

Not planning early for retirement is one of the worst parenting mistakes you can make. I believe that prioritising my retirement plan will be beneficial for my children in the long run. 70% of youths in Singapore foresaw downgrading their lifestyle in the future to care for their parents. This included settling for a smaller home, or giving up driving a car. However, if we have our own savings to tap into when we are old, our children will not have to fund our monetary needs. They will be free to chart their own course in life with no ‘parental support’ strings attached.

I think all parents should start planning their retirement as soon as possible. If you have yet to start your planning journey, check out Income's insurance savings plans and start saving for a financially independent future in your golden years.