Tips to help your Parents Manage Money
One of the hardest parts about aging parents is learning how to help them handle their finances appropriately. This can be particularly difficult because they spent their adult lives handling their own money and budgets. While this can be a difficult topic to broach with your aging parents, it is an important one, especially with the plethora of scams targeting the elderly.
Assessing the situation
After considering how serious the situation is, you can take one of the following steps to help your parents:
Act as an advisor: One of the easiest ways to help your parents is in an advisory capacity. This may simply mean talking to them about investments or having them call you before they make a purchase on the internet or from phone solicitor. If could also mean that you sit down with them every month to review their bills and accounts to ensure they are not losing money.
Power of Attorney: Your parents must consent to give you power of attorney or be unable to make decisions of their own free will. Getting their consent may be difficult unless they are struggling with their financial situation. If you have power of attorney, you can take a more direct hand in helping them pay off debt and fighting against fraudulent charges.
Addressing your parent’s concerns
Your parents may have a difficult time accepting help with their money because it may feel like an invasion of privacy. As their child, you may have a difficult time looking at their money and finding out about debts, bills and other obligations you may not have known about.
While the financial talk can be extremely uncomfortable, it is also very important. You can help ease the situation by:
Talking early: Address the elephant in the room before he is all the way in. Talk to your parents before they need help. Ask them how they feel about maybe needing your help in the future and how they want you to approach the situation. You can also make the situation less awkward by talking about general finances. Casually chat with them about investments, their retirement etc.
Ask a financial planner to join you: If you do not have a background or education in finances, consider inviting a trusted financial advisor to meet with you and your parents. Not only can they offer sound financial advice, your parents may feel more comfortable talking to a stranger about their finances than talking to their child.
Look for warning signs: If you are concerned about your parent’s financial situation, keep an eye out. Look for behavior that could indicate problems with debt or low funds. They may avoid answering the phone (for fear of debt collectors) or you may notice a stack of unopened bills sitting around the home. If they seem to be giving away a lot of money or simply neglecting their bills, you may need to take them to a doctor.
Teach them: Teach your parents about fraudulent activity targeting the elderly. Bring over newspaper clippings and other material to show them what type of things to observe. Most importantly, take time to show compassion for your parents. This time can be stressful, frustrating and even embarrassing. Let your parents know you love them and want to help.
How do you help your parents with their finances?