How to help your aging parents with their finances
‘œTo this day, I still don’t know my father’s income.’ ‘“ Cooper Smith
My parents have always been very private about their finances. That said, in high school, I learned how much money my dad made on an annual basis and over the years he continued to be open about the amount. He turns seventy soon and still works full time as a real estate appraiser. Even with the ups and downs in real estate prices, his income has been fairly consistent during the last ten to fifteen years.
But that’s about as much as I know. Everything else has really been off limits. For example, how much debt they carry, how much they have saved, the value of their life insurance policies (or if they have kept these current), the amount they still owe on their home, what other investments they have, what measures are in place to make sure my mom cared for if my dad dies first, or what happens when my dad can’t work anymore.
We’re all in the dark: all means me and my three siblings. I’ve asked and no one knows any more than what I’ve gathered. Quite frankly, I probably know the most because I share a lot about my personal finances with my parents and tend to pick up things about theirs in the conversation. I’ve made my own conclusions and those conclusions worry me.
I’ve tried being more direct with my parents and I get brushed off. I’m sure they understand my intentions are well-meaning, but they both have a sense of pride and perhaps, discussing their financial state seems like role reversal. I get the sense they’re not ready to relinquish control. It’s not like I want to get involved and start balancing their checkbook’¦ I just think at this stage their adult children should be more in tune with the numbers and the plan in place. Or my fear is that they lack a plan and we could offer some guidance.
There was a really good guest post recently at Consumerism Commentary about How to Help Your Parents With Their Finances:
Most parents will never admit to you that they need help keeping track of their finances. Admitting help is a sign of giving in and succumbing to their elder age and for many seniors is a hard pill to swallow. Down the road it may be a necessity to assist them in their finances, but it’s not too early to start the money discussions today.
Usually it will take some sort of medical emergency before both parent and child realize that they both need to be on the same page with the financial situation. I’ve seen client instances where suddenly deceased parents left their children to sort through the financial mess that’s left behind. It’s the equivalent of setting out on a long hiking trip without compass and map, having no clue where to begin or where you are going. If you think a parent is in need of help, start looking for signs. If they start complaining about misplaced bills, bouncing checks and unpaid electricity bills, it might just be time to step in.
The author, a financial planner, offers some great points, but these depend on your parents being ready and willing to talk about it. Mine just aren’t there yet. If you have helped yours with their finances, I’d love to hear how you were able to get them to open up about needing assistance or just willing to share details about their current state.
Photo credit: stock.xchng.
Note: That is not a photo of my parents. My mother would have been horrified if I had used a real one… um, remember, they’re private.
Did you search “happy retired folks” to get that pic then?
Just teasing.
My parents were the same way until my sibling stepped in and took control of the situation. Now they’re financially OK/secure.
But I still don’t really know much about their money, and they don’t want to talk about it because they think I’m too young to know anything. *shrug* Whatever.
Maybe talking about/ opening up about some of your own financial struggles would help to get a conversation going.
If they are really resistant to talking to you about it, it might be a good idea to see if they can at least get them to make a list of accounts/passwords, etc. to put somewhere in case of emergency. They don’t have to show it to you now if they don’t want to open up, but at least you would be able to access it if they ever really needed you to.
Nina, this is such an important topic. My mom is at the point where she needs help keeping track of her finances, so she and I have had to sit down and make a spreadsheet with all of her bills and when they need to be paid, etc. My mom has always been really responsible about keeping her life insurance up to date, but her 401K is in bad shape because of the current economic state. She recently changed how her 401K is distributed so that there’s less in mutual funds, but I’m really worried that she’s not going to have enough to live comfortably during retirement. As a result, we have been discussing the possibility of her living with us so that we at least know she has a roof over her head. It’s so weird to have the roles reversed.
Nina: Great topic. My parents, too, are starting to need some help. My Mom was always the one to keep track of the household budget, checkbook, and taxes, but she’s had some health issues recently, and so these tasks have fallen to my Dad. He’s a great guy, but numbers aren’t his strong point. He doesn’t like to use a credit card because he finds reconciling the bill at the end of the month too confusing, so (much to my horror) he has started to pay for more transactions with cash. I am afraid that someday he will get hurt while being robbed. I have been puzzling about what to do.
Today your post jarred me into realizing that I could pay his bills for him. Now that everything’s online, I can have his bills emailed to me and pay them through online checking. So, ok, maybe technology has provided the logistics. But that’s the easy part.
The hard part will be getting them to agree to it. I think the major hurdle will be the (perceived) loss of control.
Fabulously Broke: Funny thing is, the couple in the photo somewhat resemble my parents. Although I don’t think my mother does Capri pants – especially when paired with a solid red ensemble as shown here. P.S. Glad your family has had the money talk!
Coupon Artist: I was ready to say, no way would they ever hand over the passwords but then I read on and like your advice about having them just tell me the location of where these are written so I know the safe place should something happen.
Serena: You’re doing a good thing! I wish my parents were open to help. Although I’m not sure I’m up for either one of them living with us!
Helen: Yes, I think the perceived loss of control is a huge factor. You’re already a step ahead in the sense that your dad is willing to talk about it.
Nina, yeah . . . the idea of a parent living with you is kind of weird, I guess. But in the Mormon culture, this is very normal. I grew up with my great grandparents living in my grandparents’ house, and my mom always told us as children that if we put her in a home she would never forgive us.
The key to making it work is having clear boundaries. The parent-child relationship dynamic is no longer the right model. The relationship has to work on an adult-adult level. And everyone needs to be clear about what the boundaries are, or else there is bound to be problems.
Can you tell I’ve spent a lot of money on therapy? ;^)
Hi,
I am involved in the senior care industry and have read your blog.
I have constantly been asked to explain the difference between nursing homes and assisted living.
The graphic and information located here:
skillednursingfacilities.org/vs-assisted-living
offers a great visual explanation (better than any others I have found).
I thought you might want to check it out and share it with your readers and contacts.
Have a nice day.
Linda