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When your parents get older they might need a little help with their finances. Whether you’re financially savvy or not, you’ll want to support them in any way you can. The good news is, you don’t need to be a finance expert to offer support.
Use these seven simple tips to start helping your elderly relatives today.
Have an open discussion
In my house we have designated “bad” words. I’m not just talking about the cuss words. My husband at some point in our marriage declared a couple more “F” words that are hard to talk about during tough times… family and finance. HA! Your family might be the same and the idea of breaching the subject of finance with your parents seems daunting, but it must be addressed or they (and you) could be buried in an avalanche of financial mess in the future. You need to speak with them about finances and how you want to help them as best as possible.
If your loved one accepts help with their financial affairs, the first step is gathering all the info you’ll need to understand their financial situation. First, make a list of their accounts, customer numbers, passwords, list of bills they pay each month/quarterly/yearly, medical costs, income, etc. Basically any money that comes into their budget or goes out. Find the relevant paperwork, or access online accounts. Gather info about their debts, savings, investments, and providers. Create your own files so that you can quickly access and refer to their financial info if you need to. Be keep this data safe and secure. If you prefer to use online accounts to keep your parents’ info safe, ensure that you have a robust cybersecurity system.
Use all of this information to create an estimated monthly budget so they can visually see how much money is going out each month and how much is going in and whether the net balance is positive or negative. This can help you understand how much you might need to help them financially and it might help them realize that they need help and you are willing to step in.
Power of attorney
To help your elderly relatives you may wish to set up a ‘Power Of Attorney’. When you establish Power Of Attorney, this means that a person is appointed to manage a loved one’s finances, (if they become unable to do it themselves). With this system in place, you can take over your parent’s finances, should you need to in the future.
If you don’t get a POA, and your parents become unable to take care of their financial affairs, you’ll need to attend court to seek authority. It’s far easier to gain a POA while your relative is able to give their consent. If you do need to attend a court, you’ll need to seek an attorney to provide you with the right lawsuit information. This can be come such a mess especially during a time that is stressful enough already so if you can, get a POA before it ever becomes an issue.
Tools to help
Budgeting is the key to managing your finances. How can you know whether there is a need to help give them money to survive if you have no idea how much money their bills and expenses and income is each month? With the help of these budgeting apps you can help your elderly relatives to manage their outgoings:
EveryDollar
EveryDollar app can help you to track literally every dollar that is outgoing from your budget. You can make a budget each month with bills and add due dates. Check in throughout the month and even make a fund for savings goal.
Mint
This is one of the leading personal finance apps. Using Mint you can monitor account balances and transactions, and keep an eye on spending. The app can help you to connect investments, credit cards and crash in one place.
Good Budget
Using this budgeting app you can allocate different spending categories, and plan your finances. It’s a useful tool to keep on top of your bills and boost your savings.
There are lots more budgeting tools you might like to give a try, whether it’s You Need A Budget or Clarity Money. Budgeting tools can help you to perfect your saving strategies, and support your relatives.
Help them to save money
Now that they have a budget and a better understanding of their income and costs, you might be able to help them negotiate monthly bills like cable or internet. Or maybe you can help them meal plan to save money on food each month. There are so so so many ways to save money on a monthly budget and this could help them with their finances as well.
Help them to invest
First, be sure to speak with a financial professional for help with this. You can help your parents to invest by using a range of low-risk investment options. Here are a few ideas to get started:
Bonds: When you invest in bonds, these represent debts, purchasing a bond means that a debtor will then owe you money, and interest. You can help your relatives to invest in safe bonds, (for example, bonds that are issued from the government).
REITs: Referring to ‘Real Estate Investment Trusts’, REITs are based on managing, selling, and buying properties, without directly acting as landlords. These can provide low-risk investment options, and it’s not too complicated to get started.
Get extra support
If you’re finding the process overwhelming you may want to speak to a financial advisor. A financial advisor can offer lots of useful advice to help you manage your elderly relatives’ finances. You can get advice on saving, investments, and retirement. With the help of a financial advisor, you can create your relatives a financial roadmap.
It can be difficult to get another person’s finances in order, which is why you might be glad to have a some help and support. You can ask your financial advisor any questions you may have. Helping your elderly relatives can be stressful, but with the help of these tips, you’ll get organized and hopefully ease the strain.
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