I cannot overstate how sensitive this topic is, and how long we’ve sat on it.
I’ve spent nights mulling over whether this is worth it to write, and I am certain many people will have plenty to say about the article you are about to read.
Still, we’re putting our opinion out there, in good faith. If you’re interested, you could also check out some of the stuff other people in Singapore have got to say about this.
We hope this is an article that helps you decide what is a fair and reasonable amount of money to give your parents. This shouldn’t be used as justification to give your parents as little money as possible.
Ultimately, we hope both parents and children can approach this topic with respect and appreciation for each other.
It’s not easy to raise a child. Neither is it easy to hand over hard-earned money.
Don’t take each other for granted!
First, let’s talk about our principles when it comes to this topic
Our rationale for this topic is informed by the following principles, which we will delve into deeper later. Here they are, at a glance.
Solve needs before pursuing wants. Money should go to solving the basic needs of both parents and children before they are spent on more aspirational stuff.
Children and parents have a responsibility to each other. The young should look after the old, but the old should also do their part to reduce their burden on the young.
It matters deeply how money is handled. We earn our dollars with precious time. We need to make sure it’s put to good use.
Every parent-child relationship is unique. People are judgy and will be keen to impose their opinions on you. But only you can decide for yourself.
Be empathetic and patient. Parents may see their allowance as a symbol of love, respect, filial piety, gratefulness or even a tool for comparison with other parents. Understanding this will hopefully reduce conflict.
Now that we’ve laid the groundwork, let’s talk about the considerations involved in giving our parents an allowance.
How much do parents actually need?
This conversation would be incomplete without knowing the baseline of what it takes to fulfil one person’s basic needs in Singapore.
Basic needs = must-have.
Anything more = is good to have.
For reference, here are three benchmarks you can use. Note: These don’t take any housing or mortgage costs into account.
BASIC SURVIVAL – $420*. Our (TWS) estimate of the minimum amount to lead an extremely frugal lifestyle in Singapore with little to no comforts. This amount will allow your parents to fulfil their needs for food and water, but probably leave little room for anything else.
GOVERNMENT SUGGESTION – $787 – $850*. This is based on the $750 – $810 your parents will get from the Basic CPF Life plan, with the figure adjusted for 5% inflation in 2022. (Assuming they reached the Basic Retirement Sum.) In our opinion, this is a good gauge of what the government thinks is ‘just enough’ for retired folk.
IDEAL AMOUNT $1,260 – $1,470. According to a 2019 IPS study, $1,200 – $1,400 is what a single elderly person requires to fund their basic needs. This also includes intangibles such as a sense of belonging, respect, security, and independence. It also includes overseas trips. (Figure is adjusted for inflation)
(The same study reported that also an elderly couple needs $2,351, instead of $1,400 x 2. This figure is now $2,468 to cater for inflation
Now, we’ve some context. For your parents to start leading a decent life, the range of $850 – $1,470 is a good place to start.
Just to be clear, this is different from giving them $850-$1,470 a month.
Instead, the idea is that your contribution pushes them towards this amount.
(They might have other sources of money, including work, CPF LIFE, other children, rental income and welfare.)
What is everyone’s financial situation like?
Now that you know what your parents need, we’ll consider if they have the means to support themselves.
Here are three common scenarios people find themselves in.
Parents doing ok, you not doing ok
If your parents are multimillionaires who have abundant cash flows from six rental properties, then any allowance you give them is unlikely to go towards their basic needs.
In all likelihood, you’d be giving them allowance as a form of ‘filial piety or ‘gratitude’. If you’re not in a good financial position, one option is to see if your parents are willing to accept other forms of filial piety; this could be time spent together, or acts of service.
(That said, we have heard of parents who are incredibly insistent on receiving money as a love language, or as some form of ‘tribute.’)
Parents not doing ok, you doing ok
In Singapore, children are legally obliged to look after their parents who are unable to take care of themselves (provided that they have the means to under the Parents Maintenace Act).
We hope you don’t need the law to tell you that apart from a few exceptions, people generally should try to provide for their parents, should they be suffering financial hardship.
Having a clear conscience is important!
Both parents and you not doing okay
This is the classic sandwich generation scenario.
Both parties’ needs are equally important, and they will require a combined effort to overcome. We’ve written previously about this here, but it’s easier said than done.
Our take is that while a child should do their part and give what they can, parents also have a responsibility to support themselves as well. This includes delaying retirement or going back to work.
What is the money being used for?
You may be giving your parents a generous amount of money per month, but if it’s being mismanaged, then that’s a waste of precious resources.
Some might argue that it is none of your business what your parents use their money for; and for the record, we’d usually agree.
However, in cases where the opportunity cost is significant, then this is a valid case for reducing allowance.
For example: Instead of paying off a gambling debt, your parents use said money to get into even more gambling debt.
We’d be more inclined to give our parents more money for stuff that improves their well-being, instead of funding and enabling destructive habits.
Funding vacations overseas are fine. So are physiotherapy and other social activities with friends. On the other hand, funding an addiction to excessive alcohol consumption is not what you want to encourage.
Do note that you should also take into account instances where money is unintentionally squandered; via scams, abusive relationships, giving money to a sibling who manages it poorly etc.
If your parent is prone to these, it might be worth considering giving them allowance in a non-cash form (more on this later).
Giving money you might have invested
One scenario you might potentially feel unhappy about is if your parents simply take the money, and leave it in a fixed deposit, or high-yield savings account.
It can feel like this money is potentially wasted sitting in low-interest instruments when it could potentially be invested.
However, from your parent’s perspective, these could provide them with a sense of security; which contributes to their emotional and mental wellbeing.
Paying for things, instead of handling cash
You do not need to give your parents cash to ensure their well-being. For example, you can still buy them grocery vouchers, and meals, or pay for expenses that add to their well-being.
Are you living off your parents?
Now it’s time to bring you into the picture.
If you’re living with your parents and occupying an entire room (like many Singaporeans do), you are – strictly speaking – taking away from them the opportunity of earning $700 – $2,000, going by 2022 rental rates.
Many of us take living with our parents for granted. I used to be like this until I moved out and experienced the rental market firsthand.
This same concept applies to other ‘services’ your parents may otherwise provide to you: cooking, cleaning, the raising of children, etc.
In my opinion, it is only fair for parents to ask for more allowance if you’re sharing any of their resources. This is pretty clear-cut.
My advice is to check out what are the ‘market rates’ for these labour costs; you might find that your parents are actually giving you a discounted rate, on the basis of blood relations.
Pull your weight. Or move out, if you want to pay less.
What do you ‘owe’ your parents?
This is a touchy one. Many people will judge you for even DARING to ask this question. But here we go anyway:
We disagree with the notion that children owe their parents for the expenses incurred during upbringing.
Certainly, it takes a significant amount of resources to raise a child. These expenses add up over the years.
However, none of this should be tallied and invoiced to a child when they become of age. After all, a child has no say whether or not they enter the world.
Rather, it is the parent who has the financial responsibility and owes their child a basic level of food, shelter, education, love, attention and safety.
By extension, we also disagree with the notion that parents have ownership of their children (and are therefore entitled to a child’s future earnings, like a shareholder).
The quality of parenting you’ve received matters
For some people, their parents have been their rock in life; a haven of love and safety. Others are not so fortunate; abusive or absent parents exist. Parents are people, and people are not perfect.
In our opinion, it is fair to vary the allowance based on the quality of parenting (if any) you have received.
That being said, we think it’s also crucial you take into account intention.
Many instances of bad parenting are unintentional; possibly the results of bad communication, different societal norms, as well as past trauma passed on from previous generations.
We encourage you to, as much as possible, look past these imperfections and break the cycle of hurt.
What is the price of having it your way?
Even if you try your best, there’s every possibility that your parents and you cannot see eye-to-eye about money matters.
Compromise isn’t always possible.
Traditional Asian culture teaches us that it’s a cardinal sin to disobey your elders.
But at this risk of sounding unfilial, we’d like to warn against blind adherence to this. You can always say no, especially in the face of unreasonable demands that hurt your long-term well-being.
(Example: If your parents want you to give them 90% of your salary so they can fund their extravagant lifestyles while you struggle to make ends meet)
That said, we do not say this lightly at all.
To get the ability to say no, you’ll need to break free and become completely self-reliant.
This may mean moving out, paying for your food, and bills and doing your own chores amongst other things. It also means potentially wrecking relationships that are incredibly difficult to mend, with parents that have limited time in this world.
A parting word
Money issues are often complex and difficult. We’ve seen families argue about money over years, even decades – all the way to the bitter end.
If giving in a little is what it takes to maintain peace, then we’ll be inclined to take that route. Especially if it’s well within your means.
At the end of the day, we’d still lean towards being kind, than being right.
As the saying goes, a clear conscience makes a soft pillow.
Stay woke, salaryman.