Caring for your aging parents can often feel like a minefield of possible mistakes. You want to help them, especially if their current condition has made it challenging for them to physically care for themselves and perform daily life activities. You also want to ensure their interests are taken care of, all while helping to preserve their sense of dignity and self-respect.
Helping your parents may mean you need to help organize and manage their personal finances. Unfortunately, this can be one of those topics that can feel like an argument waiting to happen. Your parents don’t want to feel as though their freedom and adulthood have been taken away. Yet, if your parents aren’t well enough to manage their own finances, you may be left without a choice.
Luckily, there are ways you can navigate this stressful situation that helps you to both assist your parents and still treat them with love and respect.
If you can start the money conversation with your parents before you hit dire straits, it’s in everyone’s best interest. Speaking with them about what the plan is for their personal finances after they can no longer manage their money alone helps to empower them. Essentially, you’re opening the door and inviting them to make a plan that suits them. This helps prevent the feeling that you’re coming in, making changes, and controlling their money in a way that they don’t feel comfortable with.
Of course, if your parents are already showing signs that they can’t control their finances alone anymore and you haven’t had this conversation, you have to make the best of a bad situation. These signs might be that they have repeatedly fallen for scams and given away money, they’re spending in a way that doesn’t align with their budget and values and is generally out of character, or they’re missing bill payments regularly. At this point, you can either try to have a financial conversation with your parents or speak with your siblings first to develop a plan of action.
You may be able to empower your parents to maintain control of their personal finances a little bit longer by automating elements of their money management. Automatic bill payments can now be set up online, and you can help them to automate deposits to their savings account if necessary.
If they’re tech-savvy, a budgeting app like YNAB or Mint may also be beneficial. Wherever you can help them automate their financial responsibilities, you’re helping them to maintain control of their money for a longer period of time as they age.
When you help your parents manage their finances you’re doing just that - helping them. Ultimately, their money is still their own. When you start to jump in and help, your parents may feel apprehensive. Money is an intensely personal and intimate part of our lives.
You want to help your parents create boundaries - even against you, their child, to help them have a sense of security. The more secure they feel, the more likely they will be to turn over financial responsibility when the time comes.
Boundaries might look like:
One of the best things you can do for your relationship with your parents is to bring in an impartial third party when you take over managing their personal finances. A fee-only financial planner who either works to help them manage their portfolio and financial plan, or can help you on an hourly basis, can coordinate your parents’ financial life and take the burden away from you. This also helps your parents to see that you aren’t looking to control their money, but just want what’s best for them. Want to learn more? Get in touch with us today. We’d love to speak with you.
Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs, and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.