For many, it’s one of those unexpected and, at times, uncomfortable realizations of adulthood. After years of asking Mom for advice and going to Dad for help, it suddenly strikes you that in some ways these roles, which you once thought of as being set in stone, have now reversed. As your parents (and you) have gotten older, you’ve started to sense – though not always admit, perhaps – that your personal Superman and Wonder-Woman need guidance like the rest of us humans.
It’s a humbling thought, but it presents us, as adult children, with a unique opportunity and privilege to honor our fathers and mothers. One of the areas in which this is most critical is in the realm of our parents’ finances. However awkward it may feel at first, it’s vital that we work with our parents to identify, organize, and shore up their financial essentials – both for their security and for their peace of mind.
Embracing Humility, Sharing Responsibility
When you discuss finances with your parents, humility is absolutely essential. It’s important that as you broach the subject and offer your counsel, you refrain from seizing control of the conversation and coming across as condescending. Keep in mind that your parents likely cherish their independence, and be sure to convey to them that while you are eager to help, you recognize that, ultimately, any decisions lie in their hands.
As financial demands and family dynamics change over time, remain attentive to your parents’ needs and continually evaluate your own. If you notice that the responsibilities are starting to outpace your availability and expertise, then seek assistance from others. These could be siblings, trusted family friends, or financial and legal professionals. Whatever the case, don’t shoulder more than you can bear – others stand ready to help.
Starting Points
- Assess insurance needs. As the probability of health issues increases, so does the necessity of a robust health-insurance policy. Collaborate with your parents to find an option that provides the best combination of coverage and affordability at their age and stage.
- Perform a savings check-up. Talk candidly with your parents about the status of their nest egg. Have they set aside enough to cover their living expenses over the long term? Are they maximizing the interest that they could be earning? Consulting a financial professional may be especially helpful here.
- Do a budget deep-dive. Make sure that your parents’ expenses are clearly visible and fully accounted for. If you notice that your parents are pursuing a standard of living that surpasses their means, respectfully encourage them to pinpoint and curb excesses in their spending.
Looking at the Logistics
On a practical level – and to the extent that your parents are comfortable with this – it’s prudent to add one or more of you and your siblings to your parents’ accounts. This will ensure that you’re kept in the loop on payment due dates, account balances, transaction histories, etc. As a result, you’ll be better-equipped to advocate for your parents in the event that they’re inaccurately charged, unfairly penalized, or even outright exploited.
It’s worth considering, as well, how your parents pay their bills and keep track of their records. If they’re receptive, encourage them to automate their payments – especially those that tend to escape their notice – and to enroll in direct deposit for any social-security, retirement, or pension income that they receive. The more you can streamline and organize physical files – and begin to back them up electronically – the better.
Thinking Ahead
While your parents are in good health, make estate-planning a priority. By navigating the legal and financial labyrinth now, you’ll greatly reduce stress for your parents as they enter their twilight years. Be sure to seek guidance from capable, reputable professionals – prioritizing both proficiency and integrity – as you assist your parents in getting all their ducks in a row. While daunting at least initially, proactive estate-planning is one of the wisest financial moves your parents can make.
As you offer financial guidance to your parents, it’s important to remember three things. First, while you may be in the role of the helper now, be sure to express your gratitude to your parents for all that they have taught you, putting you in a position to assist them today. Second, don’t spread yourself or your parents too thinly – call for back-up whenever you need it. And third, do everything in your power to protect your parents’ dignity and preserve their sense of independence.
To be numbered among your parents’ most trusted confidantes is a great privilege and a considerable responsibility. As you begin or continue to counsel them financially, let the suggestions above serve as a starter guide.
