When we reach our 40’s and 50’s, many people find themselves suddenly having to help their aging parents with their finances. The ones who taught you how to save money, open accounts, and gave you an allowance now need assistance. This can be very difficult, and possibly embarrassing. Let’s talk about some things that can make it easier.
Just like with health, age may affect an individual’s ability to handle their money. This could be a physical issue that prevents a parent from reaching the bank, or a cognitive decline that leads them to make bad financial decisions. These problems can be compounded if the financial tasks were divided between your parents and one of them dies. The surviving parent may be unfamiliar with the tasks their partner performed.
Here are some things to do:
- Make sure that your aging parents maintain adequate health and long-term care insurance. It’s not cheap, but it’s very likely you’ll need it at some point. This will give everyone peace of mind.
- Check their savings. You’ll need to know how well your parents are doing. Is there enough? Will it last? Are the investments secure? If you need an expert, don’t be afraid to contact one.
- Find out how your parents spend their money. Check their budgeting and make sure it’s correct and sustainable. Point out any adjustments that may help them out.
Beyond these steps, if you are a child of the parent, is to get added to all of your parent’s accounts. There are ways to do this without gaining access to their funds. What’s important is that you can access the bank statements so you can check for problems such as late payments.
Using online bill paying and direct deposit systems can take a load off your parents’ minds. It’s one less trip to the bank and the creditors are kept happy.
Finally, make sure that proper estate planning is done in advance of your parents’ deaths. It’s better to learn how to legally gain access in your state to your parents’ information before death rather than afterward, and to get everything squared away. If you don’t, it can be a real nightmare to access all the accounts, trusts, and legal instruments.
This can be a delicate operation. Be respectful, and consult the help of professionals if necessary if problems arise. Remember, handling their finances when they’re unable to will help everyone’s peace of mind.
Emily Hunter blogs at Million Ways to Save, where she looks for the best ways to save you money. Along with tips, she also offers ideas on making money, debt reduction, and making your lifestyle work.