Research shows that more than 70 percent of Asian American, Native Hawaiian, and Pacific Islanders (AANHPI) believe they are expected to care for their parents—which can cause a financial toll in addition to emotional stress. As AANHPI Heritage Month wraps up, we take a look at what this responsibility means for members of the AANHPI community and tips on how best to prepare.

Caring for aging family members is a common scenario in many cultures, especially as our demographics continue to shift worldwide, but AANHPI individuals may feel more obligated due to a strong commitment to extended family. They are also more likely to experience income equality, costly living due to greater concentration in urban areas, and high spending on children and education.  

From housing to daily tasks, the circumstances around the care of a parent or another family member all carry costs, including mental energy, time, and financial sacrifice. Medical care can add up exponentially, impacting desired generational wealth in the AANHPI community. While these discussions are difficult, the best way to ensure a healthy outcome for all is to be prepared. Here are five tips:

1. Organize the financial picture: Before outlining a plan, collect any and all financial information for both the caregiver (you) and the relative. This should include bank account statements, savings accounts, retirement accounts, insurance coverage, and social security information, to name a few. Reviewing all of the pertinent details will help paint a picture to increase awareness for both parties and give you a path forward.

2. Work to solve any gaps: Armed with the financial landscape, next, you can identify what areas of opportunity exist. This evaluation can include reducing spending and increasing savings to address immediate cash needs with an emergency fund, working to pay down debt, or evaluating the current protection plan with insurance needs (discussed below). Improving areas of weakness can help put guardrails in the overall financial plan to prevent catastrophe and aid in your ability to care for loved ones.

A brief note on a protection plan, which is a critical component of any financial strategy and is even more important when planning to care for loved ones: Your approach should expand beyond adequate coverage for the home, automobile, and personal items, also covering life and disability insurance.

In the event of premature death, or, more likely—long-term disability—you may find insufficient income or assets to support loved ones. Review the benefits available through your employer; disability and life insurance are standard in employee benefits packages. You might also consider working with an insurance agent to help with this decision-making. Aim to have at least 60 percent income replacement on both short and long-term disability, and take into consideration future income, debt payments, potential college expenses, and potential burial costs for life insurance.

3. Ensure you and your elder loved ones have an estate plan set up: Similar to an insurance plan, an estate plan is another element that can create a lot of hassle if not set up properly. Fundamentally, an estate plan ensures assets are going to the correct persons and places upon passing. However, it is much more than that.

Most are familiar with the Last Will and Testament, which outlines your final wishes, but it is also important to account for things like financial powers of attorney and healthcare surrogates, including a living will. This helps create stop gaps in the event your elder loved ones become incapacitated and are unable to make decisions. The last thing you or your loved one would want is to leave decision-making up to the courts.

4. Exercise good investing habits: This is true during any phase of financial life, but there is greater emphasis when considering caring for loved ones in the future. You want to have sufficient assets to help cover your retirement, and you may also need to account for additional expenses beyond that if caring for loved ones. Aim to have a well-diversified investment portfolio to help minimize investment risk and maximize return.

5. Consider working with a professional: Each of the actions outlined above are challenging to accomplish, especially on your own. Consider working with professionals like CFP®s, CPAs, estate planning attorneys, and insurance agents to help you along the way. Though members of the AANHPI community tend to be self-reliant and lifelong learners, collaborating with a professional can help you identify unexpected areas of growth and opportunities.

Taking care of a loved one is no small task and is something that should be properly planned for. Consider speaking with your elder loved ones about the possibility of caregiving and lay out expectations. Ensuring everyone is on the same page can go a long way in your efforts to care for your AANHPI loved ones.

The author is not a member of the AANHPI community and does not have firsthand knowledge or understanding of the social or economic challenges faced. This blog is purely based on research and we recognize that this does not address every financial challenge faced by those who identify as AANHPI.

Newfront Retirement Services, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration as an investment adviser does not imply any level of skill or training, and does not constitute an endorsement by the SEC. For a copy of Newfront Retirement Services disclosure brochure, which includes a description of the firm’s services and fees, please access www.investor.gov or click HERE for the disclosures on our website.

AANHPI and Finances: Five ways to prepare for the care of aging family members

Half of Americans say they are stressed by finances [1]. And more than three fourths of Americans have experienced health impacts due to stress [2]. It’s no secret that one of the leading causes of anxiety is personal finance. Money may not be the root of all evil, but it does cause its fair share of tension. May is Mental Health Awareness month, and we’re exploring how mental health and financial wellness are intertwined—and sharing some steps you can take to alleviate financial stressors.

It can be intimidating at times to think about or attempt to manage our finances. Sometimes it seems like the bills keep piling up with no end in sight. At other times, our bank account just seems to get smaller and smaller, and we aren’t sure of a way forward. The stats are telling:

73% of Americans in debt are stressed about money, and one in 20 are fearful they will be unable to pay their debt off, ever! [1]

76% of Americans experienced health impacts due to stress [2]

27% report being so stressed they cannot function most days [2]

Some fairly common “bad money habits” often lead to more stress, anxiety, and fear around money, such as:

Not opening bills and telling yourself you’ll deal with it later

Ignoring one’s bank account in order to avoid the anxiety it causes

Avoiding student loan payments and letting debt get out of hand

Racking up credit card debt (i.e., impulse buying to satisfy a void)

Avoiding investing for the future because of fear of market volatility

If you thought these were just your bad habits, think again. Almost everyone has fallen into one of these traps at some point. Almost all of us are dealing with some form of financial anxiety. 

With that said, let’s get to the good news.

The fact is that, with some intentionality, mindfulness, and education, you might find yourself more aware, in control, and less stressed about that next bill coming due.

One practical step to managing your finances with greater intentionality is to create a budget. If you create a budget and stick to it, you are more likely to sleep peacefully at night. How many of us walk away from a purchase we can’t afford and then end up patting ourselves on the back later because of how good it feels? If you don’t know where to start, consider utilizing free budgeting resources like mint.com or creating a spreadsheet and tracking all or your income and expenses. If you want to pay for something more technically robust, consider a platform like You Need A Budget, Quickbooks, or Quicken. Any one of these can help you increase awareness and guide you in future decision-making.

Next is mindfulness. Consider starting a gratitude practice and making decisions from a place of contentment. Mindfulness is a way to keep one’s focus on the present moment, and often includes practices like meditation and yoga. But you don’t have to become a yogi to be mindful. You only need to keep your attention on the present. By being aware of our thoughts and emotions, we can avoid being overcome by them and can even manage them more effectively. One important thing to be aware of is what we do have in life, not what we’re missing. It is easy to pile up negative thoughts particularly as relates to personal finances. But we shouldn’t forget that very often our basic needs are met, and we have a number of things to be grateful for. Take some time to consider what your values are and identify whether you already have what you’re seeking in life. You might find yourself in a completely different state of mental health, which could aid in your financial decision-making.

Lastly is education. Many of us did not learn about finances growing up (at least in the formal education system). So, we’re left to rely on ourselves, family and friends to put the pieces together. If you feel under informed when making financial decisions, you’re certainly not alone. And knowing that may be enough to ease some of the anxiety. To help, consider free resources like Nerdwallet, Investopedia, or Fidelity. Each has great tips on saving, investing, and how to budget. You could also check out my other blogs discussing financial wellness:

Behavioral Biases and Finance: How Our Attitude Toward Finances Can Impact Our Overall Financial Wellbeing

Financial Literacy Month: How to Control Your Money Instead of it Controlling You

Prep for a Recession: Get Back to Money Management Basics in Five Steps

Additionally, consider working with a professional like a CFP® to help guide your decision making. CFPs are fiduciaries who provide holistic advice on the full scope of your finances and provide cash flow analysis to help you identify areas of opportunity. You can go to letsmakeaplan.org to find a CFP in your local area. Understand that not all advisors have investment minimums, and you can work with an advisor of your preference.

As you can see, mental health and financial wellness are intimately related. Americans in general are stressed about their finances and this is having an adverse impact on overall wellness. But with practical steps like intentionality, mindfulness, and education, there is a path forward that can help us decrease stress and increase our mental well-being.

[1] Bankrate, More than half of Americans say money negatively impacts their mental health, up sharply from a year ago, May 2023: https://www.bankrate.com/personal-finance/financial-wellness-survey/ 

[2] Benefits Pro, Inflation pain: 44% of Americans are living paycheck to paycheck, April 2023: https://www.benefitspro.com/2023/04/19/inflation-pain-44-of-americans-are-living-paycheck-to-paycheck/

[3] American Psychology Association, Stress in America 2022

May is Mental Health Awareness month, and we’re exploring how mental health and financial wellness are intertwined—and sharing some steps you can take to alleviate financial stressors.

How Financial Stress Can Impact Mental Health—and Steps to Achieve Peace of Mind

I recently met with an employee who mentioned he was facing financial hardship and wanted to understand his options to withdraw money from his 401(k).

He unfortunately didn’t have enough in his "rainy day fund" to cover the expense and was considering tapping into his 401(k). While this option would help him cover the hardship, he would have incurred a 10 percent early withdrawal penalty and paid taxes. Plus, the money would no longer have been invested and growing for his retirement. 

April is Financial Literacy Month, an excellent time to consider your approach in this scenario and others regarding money. Will money control you or will you control your money? As much as I would love to encourage you to spend within your means, it’s important that you conquer the steps to learning how to do this while and overcoming self-control bias, including:

A budget is critical. "If you fail to plan, you plan to fail” as Benjamin Franklin said. He was right! Without a plan, you are setting yourself up for failure. To do this, compile all of your inflows (income) and outflows (expenditures) into one place. Then, start separating out your non-discretionary (non-negotiables) and your discretionary spending. Finally, identify your strengths, weaknesses, and opportunities to find a path forward. 

Develop a pattern of behavior for success. Now that you have a budget, then comes the hard part: sticking to it.  Develop a pattern of behavior to set yourself up for success by examining your lifestyle and see if you can identify behavioral patterns that are putting you in a position to fail. Maybe you scroll through social media a lot and have a lot of ads for your favorite items pop up that may cause you to impulse buy. Perhaps instead, you go on a walk or read a book to free up your mind. You may spend a lot of time with friends and tend to purchase unplanned food or shopping items. Make your friends your allies - be upfront with them that you are trying to manage your spending to help you avoid unnecessary purchases. When you head to the grocery store for your dreaded weekly shopping, think about bringing cash instead of a credit card to help avoid items that aren’t on your list. Having a fixed amount available to spend will help you to be more cautious about what you spend it on. 

Find an accountability partner. You can hire one, like a financial counselor or planner, or identify someone who you trust and manages money well and ask them to hold you accountable. A good friend cares about your long-term success.

Avoiding self-control bias can be hard, but it does not have to be. Consider the action plan outlined above to help you on your path to being more financially fit this April. The actions of today can have a profound impact on the results of the future, and you may see results sooner than you think. The next time you find yourself surfing the web or window shopping with your friends, ask yourself what you would like to accomplish and keep perspective to help you make the best decision.   

As Financial Literacy Month wraps up in 2023, Newfront's Michael Forney discusses how to control your money instead of it controlling you.

Financial Literacy Month: How to control your money instead of it controlling you

Financial Literacy Month is celebrated every year in April to increase awareness around personal finances and money management habits.

In honor of this important month, let’s cover a topic that is critical to managing our finances: attitude – particularly, self-control bias.

Self-control bias is a behavioral tendency to neglect long-term goals due to a lack of self-discipline. Put simply, it is your attitude or mentality toward assessing current needs relative to future preparedness.

Self-control bias shows up in the form of prioritization; it’s what we do or don’t prioritize that ultimately affects our decision making and end results. For example, maybe you want to get into an exercise routine, but don’t prioritize it. Or, maybe you have created a beautiful budget tracker, but the newest seasonal apparel at your favorite store throws your budget to the wind. Whatever it is for you, sometimes self-control bias gets in the way of us accomplishing our goals.

There is a ton of prescriptive financial advice out there, such as maintaining a budget or saving for retirement; however, what doesn’t get talked about enough is our attitude and behavior towards finances. Attitude can play a critical role in making decisions and can influence overall financial well-being. Let’s explore ways that you can “master” your attitude.  

Instead of looking at your budget as punishment, consider it a tool to help you save enough for your next vacation! Or, start paying yourself first by setting aside dollars for your retirement so your future self can give you a pat on the back. Budgeting can also help you to be in a position to be generous with your money. There can be a deep level of satisfaction in taking someone out to lunch or giving to a local organization you care about.  Mastering your attitude around your budget can bring a lot of self-fulfillment.   

Ultimately, one of the most powerful tactics to overcome self-control bias is to keep perspective in mind. Perspective can help you to maintain control in the moment and not succumb to your emotions and impulses.

Next time you’re thinking about making an impulse decision to satisfy an immediate need, here are some tactics to consider to maintain perspective:

Ask yourself a few questions – will this expense materially enrich my life? Is this purchase or expense aligned with my goals and vision for wellbeing? Will I look back on this purchase with pride or remorse?

Phone a friend. Having another opinion can help us stay grounded and in alignment with our goals.

In honor of Financial Literacy Month, Newfront's Michael Forney covers a topic that is critical to managing our finances: attitude – particularly, self-control bias.

Behavioral Biases and Finance: How our attitude toward finances can impact our overall financial wellbeing

Behavioral Biases and Finance: How Our Attitude Toward Finances Can Impact Our Overall Financial Wellbeing 

In 2022, we experienced inflation numbers not seen since the early 1980s, geopolitical instability from Russia’s invasion of Ukraine, financial market declines, and the rapid rise of interest rates. All of that has led to increased pressure on wallets and predictions from economists and business leaders that a recession is on the horizon. However, there are some simple steps to take care of your personal finances, whatever the economic outcome.

What is a recession?
While a recession is a general decline in economic activity, it can be more specifically defined as two negative quarters of GDP growth, which we experienced in 2022. Other factors taken into consideration include the labor market, industrial output, and consumer spending.

What can we do about it?
The factors for a recession are largely outside of our individual control, but we can protect our personal finances by returning to the basics of money management. A recessionary period requires us to “tighten our belts” and hone in on spending habits.

Step one: Examine your expenses.
Pull up your expenses from last year with these questions in mind:

On average, how much did you spend per month?

On average, how much money did you make per month?

How much did you spend on non-negotiables (rent, utilities, phone, etc.)?

How did you spend your discretionary cash flow (or “leftover” money)?

Once you’ve identified how you spent your money, identify trouble areas. Ask yourself:

How can you reallocate dollars to be more reflective of your values or goals?

Are there any subscription services that you can afford to cancel?

Step two: Create a budget.
With that evaluation in hand, you can begin building out a plan for 2023 and beyond. Put together a cash flow plan. To do this, list out the following items:

Expected federal, state, and local tax withholdings

Goals (e.g., retirement savings, major purchases, or vacations)

Once you build this budget, stick to it. Consider using an app or software — such as Mint, Personal Capital, or Quicken — to track expenses. Another option is a robo-advisor, which uses computer algorithms to advise you on how to allocate your investments. In some cases, robo-advisor platforms also provide access to a human financial advisor for basic questions. However, if you can afford to do so, it may be best to work with a certified financial planner (CFP), who can provide holistic advice on the entire breadth of your finances, ranging from cash flow and debt management to insights on retirement and estate planning.

It’s generally advisable to have 3 to 6 months of non-negotiable (or essential) living expenses in an emergency fund should you have unforeseen expenses or an emergency. If you have limited needs, you might gravitate toward the 3-month end of the spectrum. Conversely, if you have more financial responsibilities, you may gravitate towards the higher end of the spectrum. It depends on your situation and what is most comfortable for you. Additionally, if you are a business owner, you might hold 6 to 12 months of essential expenses because of your risk profile, particularly as a recession closes in.

To establish your fund, figure out what your discretionary cash flow is going to be (i.e., money left over after expenses). From there, determine what portion you would like to allocate to the emergency fund. This could be a couple dollars per month, hundreds, or even thousands. The more money you save, the more quickly you can build up the fund.

How we save and what vehicle we utilize will be dictated by our specific goals, risk tolerance, and how soon we need to access those funds. Generally, the shorter the time horizon (e.g., 1 to 3 years), the less risk we can afford to take, and the longer the time horizon (e.g., 5+ years), the more risk we can afford to take. Here are some examples:

As the table illustrates, different goals utilize different investment vehicles. An emergency fund may use a basic checking or high yield savings account. On the other hand, retirement savings will likely utilize a retirement account like an IRA or 401(k).

Step five: Take advantage of rewards and benefits.
Just as we may take advantage of cash back or rewards on our credit cards, employee benefits can help fill in the gaps during times of financial constraint. You might have an EAP which can help pay for things like counseling, or you may have a gym membership offering. EAPs might also include financial wellness benefits, such as a financial advisor or student loan assistance. Whatever the case, take advantage of any benefits which can help you save money in 2023.

Simple ways to build better personal financial habits for 2023 and beyond.

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Articles from Michael Forney

AANHPI and Finances: Five ways to prepare for the care of aging family members

How Financial Stress Can Impact Mental Health—and Steps to Achieve Peace of Mind

Financial Literacy Month: How to control your money instead of it controlling you

Behavioral Biases and Finance: How Our Attitude Toward Finances Can Impact Our Overall Financial Wellbeing

Prep for a Recession: Get Back to Money Management Basics in Five Steps

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.css-13o7eu2{display:block;}AANHPI and Finances: Five ways to prepare for the care of aging family members

How Financial Stress Can Impact Mental Health—and Steps to Achieve Peace of Mind

Financial Literacy Month: How to control your money instead of it controlling you

Behavioral Biases and Finance: How Our Attitude Toward Finances Can Impact Our Overall Financial Wellbeing

Prep for a Recession: Get Back to Money Management Basics in Five Steps

Newfront for Businesses

Newfront for Employee Benefits

Newfront for Private Clients

Blog ‍

Connect ‍
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AANHPI and Finances: Five ways to prepare for the care of aging family members