Keeping an eye on the welfare of aging parents is often a gradual undertaking. From doing odd jobs to driving them to appointments to keeping them well fed, over time, taking on care tasks may become a necessity. For many, this will also include managing parents’ finances to ensure bills are paid, money is managed, and that they are not being taken advantage of financially. Since this can often be a contentious change for older adults, here’s expert advice to follow.
Approaching the subject of finances
As with many changes in life, it’s best to approach the subject with parents sooner rather than later, as it may be perceived as impinging on their independence. When parents and children discuss the possibility of managing parents’ finances in the future, it allows parents to maintain control of their finances until the agreed-upon time arrives.
Keep in mind that many older adults don’t want to share their financial information or give up decision-making power. But before the need arises, the fidelity.com article “Time to Take Away the Financial Keys?” recommends consulting a lawyer and appointing a financial power of attorney to manage finances when parents can no longer do it themselves. By making it formal, legal, and transparent, the subject becomes less contentious.
Hands-on management steps
Managing your parents’ finances may begin slowly with paying monthly bills and balancing bank accounts and gradually grow to include all facets of your parents’ finances. For this reason, the usbank.com article “Your Go-To Checklist for Managing Elderly Parents’ Finances” notes it’s best to prepare ahead of time by gathering financial documents and contact information. These may include:
- Bank accounts.
- Retirement accounts and pensions.
- Lines of credit.
- Social security.
- Affiliated financial professionals.
- Online passwords for applicable accounts and institutions.
Next, set up online payments for as many bills as possible and make sure all incoming payments are made via direct deposit into a checking or savings account.
This is also a good time to review your parents’ finances for miscellaneous charges for unwanted or unnecessary services. For example, review bills such as cable and internet for fees like undesired device protection plans, overcharges, and international calls they never made.
Another aspect to watch for, according to the Federal Communications Commission’s Consumer’s Guide, “Understanding Your Phone Bill” is something called “phone bill cramming.” This occurs when charges appear on a consumer’s bill for services never authorized or that cost more than they were led to believe. If a telephone bill looks more like a credit card bill, it’s a sign of cramming and warrants a call to the service provider. If you are not satisfied with their response, contact the FCC via their Consumer Inquiries Complaints Center.
When dementia is a consideration
Many older adults maintain mental clarity their entire lives, but for others, cognitive decline signals that it’s time to manage parents’ finances. According to the psychologytoday.com article, “Signs of Diminished Financial Capacity in Older Adults,” seniors with cognitive decline may fall behind on bills, struggle with calculations, become overwhelmed by financial decisions, and may more easily fall for financial scams. In addition, seniors may spend and give more than is normal and make unusual and unnecessary purchases.
Since mismanaging money is one of the symptoms of dementia, changes in buying and spending habits can mean it’s time to be concerned. As described in the nia.nih.gov article, “Managing Money Problems for People With Dementia,” signs include:
- Unopened and/or unpaid bills.
- An uptick in credit card purchases.
- New merchandise in the home.
- Unexplained missing money in bank accounts.
Begin reviewing your parents’ finances by checking monthly statements and talking with them about expenditures line by line. This is also a good time to consider a monthly budget so that large (and often unnecessary) purchases can be avoided. By setting credit card limits and keeping bank account balances low, seniors with cognitive decline will be less likely to overspend or become victims of scammers.
Another tip for managing your parents’ finances is to create a list of trustworthy service providers such as HVAC, plumbing, and electrical contractors, and vehicle mechanics with contact information in the event a repair is needed. While it is always best if your parents call you for help with these issues, if they don’t, you at least know they are calling reputable companies rather than fly-by-night, unlicensed, and unqualified predators.
One of the easiest ways to eliminate much of the burden of managing your parents’ finances is to move to a senior living community where many monthly services are combined. For more information about Countryside, please call Margaret Nagel at (517) 206-5000 or download our brochure to learn about our care levels, cost, and amenities.
