Managing finances can become more challenging for elders, and eventually helping parents with their finances is often necessary. However, handing over control of their finances can feel as though they are surrendering some of their independence. They may be reluctant to turn over this important task, but as we frequently see in our elder care environment, with proper preparation this transition can take place smoothly, freeing the elder from what has become a time-consuming task and protecting them from potentially costly financial errors.
7 Proven Methods for Helping Parents Manage Their Money
In some cases, a loved one will request help. In others, you may start to notice that your assistance is needed. Either way, there are steps you can take to move smoothly into the role of “money manager.” Use the tactics below to ensure a stress-free transition.
- Be proactive about discussing future plans. It’s much better to have relaxed and unhurried conversations about an elder’s finances than to have to make a snap decision after a physical health or cognitive crisis. These conversations will also assure your loved one that you understand and honor their wishes regarding how their money is managed.
- Be vigilant about changes in cognitive capabilities. If you become aware that the person has started to forget to pay bills or is making other bookkeeping errors, it is time to take action. You may be able to suggest helping your parents with finances by paying the bills together as part of the conversation about how they want their money managed. If possible, demonstrate that it’s still their money and they get to make decisions, you are there to help execute their wishes.
- Get input from other family members as appropriate. In some cases, it will make sense for an elder to have just one person helping with their finances. In others, it may be a good idea to have help from multiple family members. Financial savvy seems like it may be the most important quality of the person chosen to manage the money, but the truth is, trust is the most important factor. Find the person the elder trusts.
- Start with a thorough financial review. Getting the “big picture” on all of an elder’s assets and liabilities up front can make it easier to see how, when and where assistance is or will be needed. This financial review can and should take place well before any transition is required.
- Involve a third party expert as needed. Some of the choices you and your loved one will have to make may be difficult. Getting input from an impartial third party like a financial advisor can simplify decision making.
- Establish power of attorney. At the appropriate time, it is important to get the legal authority to make decisions on behalf of the person, rather than just having their permission to do so. There is no requirement to begin making decisions or helping your parent(s) with their finances once you have the document in place. Having it completed sooner than later will give you both peace of mind that nothing will fall through the cracks.
- Keep the person “in the loop.” Your loved one will appreciate knowing what actions you are taking regarding their finances. After all, it is still the elder’s money and they can still exercise as much independence as possible.
Empowerment and Financial Security: Finding the Right Balance
At Green House Homes, our unique approach to elder care is focused on empowering elders to stay engaged and active as they age. That said, there clearly are times when certain responsibilities must be handed off to others. But when managed properly, these tricky transitions can go smoothly. And, ultimately helping a parent with their finances can allow them to enjoy more free time and pursue their passions.
