MANILA, Philippines – Paying off your own debt requires discipline and patience, but paying off your parents’ debt requires much more than that.
On ANC’s “On The Money,” financial advisor Salve Duplito said that while paying off their debt entirely if you have the means is the easiest way, empowering them and teaching them to pay off their own debt will help them keep their dignity.
One way of helping your parents pay off debt is by drafting a debt payment push plan.
To start the debt payment push plan, list down the amount of debt to make you aware of how much you owe.
Then list down your debt from highest to lowest interest, and compute how much you can pay every month.
For instance, if you can pay off P15,000 monthly, spread it out to the loans and use the biggest chunk to pay off the most expensive debt.
On the month the first account is fully paid, add the money that you used to pay for the first account to the payments for the second account until all accounts are paid off.
This method does not only speed things up, it also empowers parents to learn about financial management, Duplito said.
She added that “the Filipino culture of close family ties can be a blessing in personal finance.”
“Helping must be done in a way that empowers, rather than coddles financial mismanagement. Helping must not be done at the expense of your own personal goals, but by keeping lifestyle simple,” she said.