When you were younger, you counted on your parents to guide you as you learned how to spend and save money, as well as build credit and stay out of debt. As your older loved one's age, though, you may suddenly find yourself in the position of financially guiding them.
When the time comes, it’s important to know how to approach the situation. Most older adults want to remain independent as long as possible, and there are ways you can help while still respecting that. Here are some tips to help you prepare.
Acknowledge When Help Is Needed
If you wait for the situation to get dire, it may already be too late. It’s important to look for early signs that your loved one may need help. When you’re visiting, pay attention to the calls coming in, listening for signs that debt collectors may be calling. Also, take note of unopened bills piling up around the house. Ask questions about recent purchases and make sure your loved one recalls buying the items. You’ll likely already be on alert if you notice sudden, frivolous spending from someone who was previously somewhat frugal.
If intervention becomes necessary, find a way to assist your loved one without coming across as taking over. Offer to sit down and make a budget or help with straightening out overdue bills. If you approach the assistance as just that, your loved one is less likely to become defensive and resist your help.
Set Up Long-Term Solutions
Sure, you can help your loved one straighten out things today, but what about tomorrow? It’s best to set things up to be as easy as possible for your loved one. Here are a few things you can do.
- Enable automatic bill pay to ensure all recurring debts are paid automatically.
- Create a budget, complete with a weekly spending allowance.
- Help identify sources of income your loved one may not know about, such as forgotten retirement accounts or government benefits.
- Negotiate with creditors to settle any overdue payments.
Unfortunately, there may come a time when you have to take further steps. The first thing you should do as you notice things are getting serious is to let other loved ones know. If it’s a parent, your siblings will likely want to be looped in. This is especially important if you live far away and someone nearby can help. You can also set up a Power of Attorney to give you or someone else the authority to intervene if it becomes necessary. In the meantime, a financial expert could help a loved one who is reluctant to involve relatives or friends in personal matters.
Older adults aren’t the only ones who could use some help with their finances. It’s important, when helping out your loved ones, that you make it clear that you struggle with these things, as well, but together, you can figure it out. You’ll both be able to set up a plan that will keep bills paid while also offering some spending money for enjoying life.