Written by James Hall
As individuals age, experiencing a gradual decline in motor function and cognitive abilities is natural. Over time, this can impact all spheres of life, and managing finances is no exception. Making a series of bad decisions involving money can create a large dent in your parent’s financial situation. While not all parents require assistance regarding finances during old age, this article by Wellness Alliances explores various warning signs one should look out for and the numerous ways to help your parents remain financially healthy well into their golden years.
Knowing the Signs
Whether it be due to pride, or the fear of embarrassment, senior parents may not be upfront about their financial difficulties even when asked about it directly. But, certain tell-tale signs can bring the problem to light:
Stacks of Unopened Mails: If on visiting their home, you observe stacks of unopened mails lying around, that is a strong first indication regarding financial issues. Those mails may include multiple unpaid dues relating to utilities, vehicle maintenance, insurance, etc.
Unusual Large Purchases: The purpose of saving up large sums of money for retirement is to be able to spend it on things that one desires. But, if you notice your parents spending hefty sums of money on items that do not fit their needs or likings, it may point to the fact that they are being scammed. Additionally, this could include constantly buying tickets for contests, lotteries, etc.
Constant Money Talk: If the majority of conversations with parents circle back to finances, it could be a sign that they’re facing problems.
Cognitive Impairment: As reported by the APA, prominent signs of cognitive impairment include forgetfulness regarding appointments, conversations, and simple things like the current day/date, a lack of sense of direction, and difficulty in understanding instructions.
If you observe your parent(s) showing one or multiple of these signs, it’s time to step in and help them manage finances in the following ways:
Collect Important Documents
Before you can take a call on the changes to be made, it’s important to review their current financial position. Hence, the first step will be to ask them to provide you with all important documents such as:
Bank Statements
Mortgage Payment Statements
Insurance Policies
Pension Records
Vehicle Documents
Social Security Payments (if applicable)
Additionally, if your parents have safe deposit boxes, make a note of the contents stored in them and the location of the banks.
Understandably, this process may make your parents feel uncomfortable, hence, focus on reassuring them about the importance of keeping their finances healthy and keep them in the loop regarding all decisions you plan to make involving their assets and money.
Automate Bill Payments
One of the best ways to relieve senior parents from the need of managing monthly dues is to set up automated payments from their bank account(s). As reported by Zee Business, this will include making necessary payments for utilities, car maintenance, and other service providers.
But, before managing future payments, clear all remaining dues to avoid being penalized or having the account put on hold.
Help Them Sell Their Business
An underperforming business can become a major cause of financial difficulties as well. Maintenance of business assets serves as a major recurring expense, and unpaid dues to vendors can rack up in a short period. If your parents are no longer able to keep the business profitable, the best option is to sell it.
While it may not be an easy decision to make, the money made from the sale can help pay off dues and generate enough funds to help your parents live comfortably for the foreseeable future. To get the best price for the business, get a professional business valuation done and work with a broker who can undertake the responsibility of finding buyers and closing proceedings.
Managing your parent’s finances will be a major responsibility to undertake. The best approach is to ease into the process by taking things one at a time. Additionally, when making a call regarding major assets, consider inputs provided by parents before taking the final decision.