How to Help Your Aging Parents with Finances

How to Help Your Aging Parents with Finances

As your parents get older, you might start to notice that have started having more difficulty doing things they once did with ease. Basic things like cooking, cleaning, driving, and grocery shopping all start to become more difficult. Your parents might not want to admit it, but they may start to need your help. In addition to helping them with these basic tasks, they may start needing help with their finances. As a caretaker for your parents, it’s important to make sure that their finances are in good order to avoid debt and other financial complications. There are ways in which you can help your senior parents with their finances, giving them, and you, peace of mind.

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Create a Budget

When starting to help your parents manage their finances, it is important to create a budget. This way, you, and they, can see where their money is coming from as well as where it is going. Write down a list of all of their income sources, such as social security, pensions, retirement accounts, and the like. Then make a list of all of their expenses. These might include things such as cellphones, cable and internet, utilities, and groceries. If necessary, you can help them to cut unnecessary expenses, such as reducing or combining insurance policies and eliminating magazine subscriptions. You may also check to see if they are eligible for additional entitlements through the local, state, or national governments.

Get a Power of Attorney

Getting a power of attorney will help you to better manage your parents’ finances. You will legally be able to act on their behalf in financial and legal matters. This can mean accessing bank account information, talking to their insurance company, contacting their pension administrators and more. A POA will also help you to add your name to your parents’ bank account, which will also help you to pay their bills.

Set Up Automated Payments

Speaking of making payments, setting up automated payments for recurring expenses that your parents have. With automated payments, the bills are paid on the same day every month. Without having to worry about whether or not they made their payments on time, you can help to alleviate stress.

Talk About Scams and Fraudsters

Unfortunately, approximately 25 million Americans are victims of consumer fraud. The senior population tends to be the largest target. To help prevent these issues, talk with your parents about the types of fraud that can occur, such as phone calls from individuals claiming to be from the IRS or Social Security. These fraudsters often ask for credit card information or bank information, claiming that you owe money and that you will be in trouble if you do not pay. Avoid lecturing by saying that everyone, regardless of age, can fall victim to these scams.

Make Sure Legal Documents are Up to Date

Collect and go over all of your parents’ legal documents with them, including their wills, life insurance policies, investment accounts, tax information, and any other documents that they might have. Make sure that all of their documents are up to date. This might mean updating their wills or reducing their life insurance policies because they no longer have dependent children to take care of. Keep all of this important information, as well as bank information and passwords, in a locked, fire-safe box. It is also important that you document everything that you do, including keeping copies of checks written, receipts, and more. This can help you to avoid potential legal issues in the future with other family members.

Keep Your Parents in the Loop

Don’t just take over your parents’ finances and not tell them everything that you’re doing. This can lead to resentment. While it might be easier just to manage everything by yourself, it is essential that you keep your parents informed of what you are doing every step of the way. Ask for their input. Keeping your parents involved with their own finances can help to help with their morale and can also help to enhance your bond with them.

Talking with your parents about helping them with their finances can be a touchy subject, but one that will eventually need to be discussed. By working with your parents, and keeping them involved with their finances as long as possible, the whole process can be made much easier, and can prevent serious issues from taking everyone by surprise.

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