How Can I Help My Elderly Parents Manage Their Finances?
Do you ever feel like your aging parents might need some help managing their everyday expenses? Your parents are fortunate to have a child who’s proactively willing to help with this challenging task. Here are some ways you can help your elderly parents manage their finances.
Determine whether they need help
If you notice any of the following, it may be a sign that your parents need assistance with money management:
- Unusual and unnecessary purchases.
- Piles of unopened mail.
- Physical setbacks.
- Cognitive impairment and/or memory failure.
Communicate openly
Before taking steps toward managing or assisting with your parent’s finances, have an open conversation about your current and future intentions. You can share that you are only there to help and that you will not take any actions without their permission, whether before or at the time of need.
Gather information
Next, sit down with your parents and ask these questions about their finances:
- Have you named a durable power of attorney (POA) for finances?
- Where do you keep your financial records and assets?
- What is the name of your mortgage lender?
- What are your monthly expenses?
- How do you pay your bills?
- How much is your annual income?
- What kind of health insurance do you have?
- Have you written a will or a trust?
Establish a plan
Now you’re ready to establish a plan for managing or assisting with your parent’s finances. Be sure to honor their dignity as much as possible. Ask them if they’d like you to take responsibility for one or more of their monthly financial-related tasks. For example, you can pay their mortgage and car payments each month or make decisions relating to their investments.
At this time, consider simplifying their finances in any way you can. For example, if your parents have multiple credit card balances, you may want to consolidate this debt into an unsecured loan and only have to pay back one monthly loan payment. You can also automate as many bills as possible.
Alternatively, you can talk about the future only and have your parents agree to let you manage their money if one or both of them become incapacitated in any manner.
If your parents find it difficult to relinquish this bit of independence, start assuming responsibility for their finances gradually, just one bill at a time.
Taking over the finances of elderly parents can be a delicate and daunting task – however, it is often necessary. Use the tips outlined here to navigate this situation smoothly.
Need more help with financial management? Check out our MoneySmart Tips Blog or read more about managing an elderly parent’s finances on MoneyGeek.
