Cutting the Purse Strings: Dealing with Your Parents’ Finances
For members of the military who are caring for aging parents, it’s often pretty clear when you need to take away the car keys. However, when it comes to money, it’s not always as obvious.
Almost one-fourth of those older than age 65 have some type of cognitive impairment. Even those who are experiencing normal “cognitive aging” might be affected by memory lapses and slower thought patterns.
What should you look for? Some of the signs that an elderly parent may be struggling with money include: anxiety about the mail and paper clutter in their home; difficulty counting money; and calls from banks and other financial institutions about problems with their accounts.
If it’s clear that an older relative is no longer able to handle his or her finances, and you’re thinking of taking over that job, make sure you know the answers to these questions:
Have your parents named a durable power of attorney to manage their finances?
Where do they keep their financial records? Make sure you know the location of keys or codes to safety deposit boxes or safes.
What are the numbers for their accounts with banks, mortgage companies, and investment firms?
What are your parents’ monthly expenses?
What is their annual income, and what is the source of that income?
Besides Medicare, what kind of medical insurance do they have?
Do your parents have long-term care insurance? If not, how much can they afford for housing?
Whatever you decide to do, be sure you are careful about framing and timing your offer of assistance. You might suggest that they put all their bills in one place, and then offer to come over once a week and help sort them out. You can also consult a military lender if you find that a parent has run into financial difficulty and you need cash to help tide them over.
Remember that it’s important for older people to retain a sense of dignity and independence, even if they’re no longer handling their own finances. You can help by being sensitive to this and allowing a parent to maintain a small checking account, or have access to a prepaid credit card.
For more tips on taking over aging parents’ financial affairs, check out this advice from financial editor Jean Chatzky of The Today Show.
Are you managing an aging parent’s finances? How did you approach the situation, and what tips do you have for others in the same situation? Please share your advice and experiences with us.