Helping Elderly Parents Manage Finances

Millions of Americans are caring for an older adult, usually a parent. Caregiving isn’t limited to ensuring that relatives receive medical attention and keep their houses clean. It also includes assisting with money management tasks and financial decision making.

As many as 7 percent of adults receiving Social Security benefits have difficulty managing their finances, according to the AARP. Issues ranging from bouncing an occasional check to neglecting to pay bills or deposit checks can snowball quickly.

With that in mind, here is some guidance for helping your parents or elderly relatives manage their finances.

Warning signs

Of course, not every parent will want or need assistance. Many will take offense if you suddenly start becoming interested in their money-management techniques and insist on taking over. But at some point you may need to step in. Watch for the following warning signs:

• Drawers and files that used to be organized are scattered with old documents.
• The mailbox is full of donation requests. This may be normal if your parents are particularly generous, but watch for solicitations from groups or causes that don’t seem to connect with their interests.
• There’s a pile of unpaid bills. This indicator is particularly powerful if they have the financial means to pay them.
• They make mistakes in their checkbooks.

Starting the conversation

Talking with your parents about their finances might not be easy—they may resist sharing information or see the topic as off-limits. When the time comes to have the conversation, there are some techniques that can help make it go more smoothly.

You can start by telling a story. Say that you’ve heard about scams targeting seniors and want to help protect them by monitoring their accounts for unusual activity.

Instead of making the conversation all about them and what they should do, use “I” statements and talk about what you’re doing. For example, tell them you recently met with a trust advisor to discuss your estate and ask if they have similar plans in place.

How you can help

After they agree to let you help, you can lighten the load in several ways:

• Create a list of their accounts and insurance policies and find out where they keep their important documents. You won’t be able to access the account unless you have power of attorney for them, but it’s better to collect all the information before you need to use it.
• Suggest that you take over one of their financial responsibilities so they have more time for the activities they enjoy.
• Propose a spending plan (not budget). Helping them create one will give you a chance to see how much money they have coming in and how they’re spending it.
• Set up automatic bill-pay if they haven’t already.
• If they don’t have a will, living will or power of attorney, ask them to schedule an appointment with a trust advisor or estate attorney.

If they live close to you, visit your parents often so you can catch up with them and notice any changes in behavior. If you can’t visit as often as you’d like, call once a day. It means so much to them. The other advantage of regular communication is that talking with them about their finances over a period of time will be more natural than sitting down for a specific meeting.

You can reach Michelle Carr at (865) 766-3071 or michelle.carr@pnfp.com.