Your aging parents’ money: How and when to help
Learn how you can help and when it’s a good time to start.
The day may come when your parents can no longer handle their own financial responsibilities, and it might be hard for them to ask for help—even if they need it. But with a sensitive approach, you can work with your parents gradually and make the process as comfortable as possible. Here are some tips to help.
Start the conversation before problems arise
It may be some time before your parents need your help, but start talking now. A constant dialogue will make it easier for you to understand their financial landscape, and you’ll have a better grasp of what your level of involvement may be over time.
These conversations may be difficult, which is part of why it’s important to have them early. For example, consider talking to your parents about who will handle their affairs if problems arise. The National Institute on Aging recommends that parents give advance written consent to a designated family member so that person can discuss a parent’s personal affairs with key professionals, such as doctors, financial representatives and Medicare officials. Without this type of preplanning, privacy laws may prevent important conversations.
Keep the rest of your family looped in
Keep your loved ones informed about what’s going on—especially siblings, both yours and your parents’. Relatives can be important sources of support, and open lines of communication can reduce the risk of misunderstandings. Managing your aging parents’ finances can be a lot of work, but you don’t necessarily have to do it all alone.
“Increase your support little by little if and when it’s needed.”
Go slowly if you can
Instead of sweeping in to take charge of your folks’ finances, increase your support little by little if and when it’s needed. For example, if you’ve taken on the responsibility of writing checks, start by doing it together. This kind of gradual, sensitive approach gives them (and you) some time to get comfortable with the new arrangements.
Help your parents get organized
When it comes to your elderly parents’ finances, it helps to make a list of all their contacts, account numbers and the places they store legal documents such as birth certificates, insurance policies, deeds and wills. Double-check that everything is still valid and up to date, and that all accounts are in good standing. Whether you’re compiling this information or taking note of where your parents have stored it, make sure any sensitive information is in a secure location.
Simplify financial tasks
Once everything is organized, take a closer look at any income your parents might have, such as retirement or savings, and switch those income streams over to direct deposit if possible. This will ensure your parents’ money still makes it into their accounts even if a problem emerges where they are not able (or forget) to make a deposit. Review their household budget and adjust it if necessary, or help them create a new one that works for them today. If paying bills is stressful for them, you might consider setting up online bill pay so things are paid automatically each month. If you’re a Bank of America customer, learn more about setting up automatic bill payments.
Keep your finances separate
It’s not a good idea to mix your finances with those of your parents, even if it seems like a convenient fix. Using your own money to help your parents out can be a slippery slope, and you should always keep your personal assets and funds separate. It’s important you don’t jeopardize your own retirement or savings goals as you work to help your parents.
Know the signs
If you’ve talked to your parents ahead of time, you likely have a plan in place for how to help when they need it. But knowing when it’s appropriate—or necessary— for you to jump in can be a challenge. These signs may be a cue.
- Unusual purchases: Take notice if your parents are suddenly buying things that don’t fit their needs or lifestyle, or if they begin entering multiple contests or sweepstakes. This behavior can spiral out of control quickly, and older people are often vulnerable to scams.
- Piles of unopened mail: A pileup of mail can be a sign that your parents are making unusual purchases, falling behind on bills or entering sweepstakes.
- Always complaining about money: From claiming they don’t have enough money to avoiding activities that they think might set them back, if your parents talk only about money when you’re with them, it could be a sign there’s a problem.
- Physical setbacks: Fading vision can make it difficult to drive to the bank, and arthritis can turn writing checks or addressing envelopes into a painful chore. If you think activities are becoming challenging, it may be a cue they need help.
- Memory problems: Cognitive breaks—from not knowing what date to put on a check to not remembering where to write the dollar amount—can be a major indicator that you may need to step in and help.
If you’ve started the conversation early, you’ll know what to do when these signs emerge. If you need help, there are a number of resources available, including the National Institute on Aging and the National Alliance for Caregiving.