How To Know If Aging Parents Need Help With Finances
Most people can manage their own finances up until the end. Unfortunately, that isn’t the case for everyone. What can you do if you notice your aging parent can no longer manage their own finances?
As a caregiver, it can be difficult to have a conversation about financial assistance. Much like driving, managing your own finances is a sign of independence. It is something your parent has done for decades.
How do you even know when to step in? What role should you take in financial management? Who needs to be involved in the decision making process?
Signs Your Aging Parent Can’t Manage Finances Independently
Many people are quite capable of handling their finances without assistance. Aging doesn’t mean you aren’t capable of remaining independent. So, how do you know that your elderly parent can’t hire their own money?
- There are unpaid bills when they normally paid their bills on time or even early.
- Their mail is unopened or piled up, particularly if this is unusual behavior for them.
- Creditors are calling. This is especially alarming if they have the financial means and are normally on top of their finances.
- They begin making unusual purchases, such as overbuying or purchasing unusual items they don’t really need.
- They are donating or loaning money to charities or people they wouldn’t normally support.
- They are suddenly concerned about not having enough money or are spending more extravagantly than normal.
- Someone has taken financial advantage of them.
How to Address Finances With Aging Parents
The tough part isn’t figuring out that your parents need support with their finances. It is actually telling them that they are no longer able to handle the task. If you have siblings, they should be involved in the conversation. Here are some tips for making the conversation go well.
- Have the conversation at a neutral time, not immediately following a financial challenge or at a holiday gathering.
- If you have siblings, discuss everyone’s role prior to addressing the issue with your parent.
- Don’t make your parent feel like they are incapable of making financial decisions.
- Calmly state your concerns and involve them in the decision-making process. For example, Mom, I noticed that several of your bills haven’t been paid. I was thinking it might be helpful to you if Jane and I take over your bill paying so that you don’t have to worry about it. How do you think this would work?
- Involve your parent in their finances, regardless of their cognitive functioning. I had a client with advanced Alzheimer’s disease whose daughter still met with her monthly to go over the bills she paid and go over her accounts. I think it helped her mother feel like she was involved.
- Work together to come up with a solution. Even if your parent has cognitive challenges, they should still be able to access money to pay for small expenses. For example, I worked with a woman who had dementia. We took her shopping at the Dollar Store weekly and she paid for her items using a pre-paid credit card. I also worked with a woman with dementia who had a set amount of cash to spend on extras. Her children handled all of her bill paying and made sure she had her own money.
How To Take Over Your Parents Finances
Once you’ve had the discussion and everyone is in agreement on how it will work, here are the steps you’ll need to make to ensure that bills don’t slip through the cracks.
Set up a power of attorney so that you will be able to access their financial files.
- Have your parents add you to their bank accounts.
- Gather all of your parents’ financial documents to determine what bills are outstanding and get a complete financial picture.
- Document everything you do with your parents’ money to protect yourself. If you have siblings, consider a monthly or quarterly update.
- If budget allows, consider hiring a financial planning advisor or a bill paying service.
- Be sure to give your parents access to money without making it seem like an allowance. Depending on their cognitive ability and their funds, you can either encourage them to purchase items with their bank card, a credit card or withdraw a set amount of cash each week.
This is not an easy decision. As a caregiver, you have to do what is best for your caree, even if it is difficult. Unfortunately, financial fraud can happen to anyone. Keeping an eye on your parent’s financial health is how you can make sure it doesn’t happen to them, or if it does, they can recover from it.
If you approach this as a way to make your parent’s life easier and demonstrate that you are looking out for their best interest, they will be less resistant.