As you begin to discuss senior living options with your parents, it’s important to have a realistic picture of their financial situation—especially if you sense they’re having difficulty managing their affairs.
Offering to help with your aging parents’ finances may not be an easy conversation to initiate, but these four steps can help the process go more smoothly.
Step One: Start the Financial Conversation
It’s common for parents to shield their children from their financial situation—regardless of the state it’s in.
Start the financial conversation simply: Suggest that for you to help them compare the costs of senior residences and facilities, you’ll need to have an idea of what their current monthly expenses are and how they’re paying their bills. Look beyond the cost of the mortgage and property taxes in this discussion. To make accurate comparisons, you’ll also need to factor in what they’re budgeting for utilities, phone, cable, food, transportation, and other household services, such as housekeeping, lawn care, and snow removal. This may give you an opportunity to review several of their accounts—and identify potential problem areas.
Don’t expect to get all the answers in one conversation. Your parents may be reluctant to share information or let on that they need help. Be prepared to tackle one topic at a time and allow everyone to become comfortable with your involvement.
Step Two: Know When to Help
If your parents are insisting that they don’t need help with their finances, don’t push it—but recognize signs that indicate they’re struggling, such as:
- The mail pile has grown since your last visit and contains unopened bills
- Counting change or writing checks has become noticeably difficult for your dad
- Your mom is receiving numerous offers from charities, sweepstakes, or vacation homes
Offer to straighten up their desk or go through their mail to shred or recycle the excess paper. Both are non-threatening ways to lend a hand—which also may give you a better glimpse into their finances.
Step Three: Get Organized
If you’re given the green light to help manage your parents’ financial affairs, it’s time to get everything in order. Make note of:
- All liquid accounts. This includes checking and savings accounts from all banks, retirement accounts, and brokerage accounts. Consolidate accounts where possible to help simplify management.
- Income. Track the sources and amounts of the retirement income your parents receive, including Social Security, veteran’s benefits, or pensions.
- Credit card statements. If some cards have balances, start paying bills in full and on time each month.
- Recurring expenses. Go through bank statements to review how your parents are spending money each month. Note any overpayments or unnecessary expenses, and suggest ways they could get back on track.
- Online access credentials. Though most records will be kept in paper form, ask your parents if you can establish online access to their accounts. This will help you keep up with account activity. If they have set up online access for themselves, ask for the passwords or reset credentials, and then store the information in a secure location.
Set up files for your parents’ important papers so that documents are organized and easy to find. Offer to help them file their documents each month to help them stay organized—and allow you to monitor the accounts.
Step Four: Ensure Future Financial Security
Once you’re familiar with your aging parents’ finances and have determined they can afford their preferred senior living setting, it’s important to carry the oversight a bit further.
Make sure they remain well-protected against potential fraud and other money-related missteps, such as unbalanced investments or hidden recurring charges. Help your parents by:
- Cancelling all unnecessary subscriptions or services
- Making sure they recognize what financial scams look like
- Hiring a money manager or financial advisor to protect their assets
For more tips on helping your aging parents with their financial affairs, consult a tax advisor, money manager, or elder law expert.