When your parents start needing help, you tend to worry about the obvious things, such as making sure their lawn is mowed or reminding mom to take her medication. One of the last things you think about is their finances.
After all, they’ve been handling their finances since before you were born. And it’s likely they’re resistant to sharing their financial details with you.
How do I talk to my parents about finances?
The first step is broaching the subject with your parents. Try these tips from our eBook, How to Persuade Your Aging Parents to Consider Assisted Living:
- Set the stage. Plan when and where to have the conversation. Minimize distractions, intrusions and noise. Turn off the TV or radio.
- Use "I" statements so your parent doesn't feel as if you're handing down an ultimatum. Use terms like "I feel" and "my feelings".
- Discuss only one thing at a time but don't be blunt. For example, instead of saying, "What’s going on with your finances?", try approaching the subject by saying, “I always have difficulty making a budget for entertainment. What do you do?” Asking for advice is a good way to start the conversation.
- Know your sensitive points. You may be handling this in as sensitive a manner as possible, but that doesn't mean your parents will. They know just what buttons to push to get you to end the conversation.
- If you’re worried about how you’ll sound, practice with a coach.
- Don't be upset if the conversation ends without much progress. You're opening a door, and you may need to open that door several times before you enter.
How do I help my parents manage their money?
Finances are a sensitive subject for anyone, especially for parents. However, in order to ensure your parents have sufficient funds to live comfortably for the rest of their lives—or to make plans if they don’t—it’s essential to get a good idea of their bills, insurance policies, investments and more.
Start with the basics:
Budget. If your parents already have a budget, that’s a good start. In order to learn more, you can persuade them to give you information by helping them set up online banking or offering to put their budget in a spreadsheet or an app. If they don’t have a budget, you can offer to help them. This will give you a good idea of their finances.
Calculate retirement expenses. AARP has a great retirement calculator that, unlike others, makes an assessment even if the user has already retired. AARP also has a Social Security benefits calculator.
Gather investment information. What are their investments? How much do they earn? What is the market value of their house? One way to persuade your parents to give you this information is to tell them you need it for the budget spreadsheet or calculator. And while you’re at it, gather all legal and financial documents and/or information in one place so everything will be easy to find.
Plan for the long term. People are living longer than ever, so you need to plan. The Social Security Administration offers a handy life expectancy calculator you can use to calculate how many years you should consider. Will your parents need more help than you can provide? Will your siblings help support them? Is long-term care insurance a good idea?
Make decisions. If your parents don’t have sufficient funds to support their lifestyle, it’s time to act. Do they need to change their investment allocation? Do they need to downsize? Do they need to budget better? Are they paying their bills on time?
What if my parents aren’t making sound financial decisions?
If they are behind on bills or making questionable purchases, here are some steps to take:
- Put their phone numbers on the Do Not Call Registry to reduce the chance of con artists contacting them.
- Get power of attorney for financial matters or become your parents’ guardian. You will not be able to perform basic tasks, such as examining their bank account, without legal permission.
- Opt out of junk mail and email with the Direct Marketing Association. Once you’ve done that, you can report junk mail to the S. Postal Inspection Service.
- Check their credit reports annually at com to guard against identity theft. The annual credit report is free.
- Consider a healthcare proxy and healthcare release form. While you’re helping put their financial house in order, you might as well deal with medical matters. A healthcare proxy will ensure your parents’ wishes regarding their medical treatment will be followed. A healthcare release form will give you legal permission to see their records and converse with their doctor about their medical needs.
We make living at The Arbors Assisted Living Residential Communities affordable for families like yours. In addition to offering fees based on services, we participate in MassHealth income-based programs and offer information for families looking for financial help.