How To Talk To Aging Parents About Their Finances

Many of us are concerned about our aging parents. 

• Have they saved for retirement? 
• If the parent who manages all the finances passes away, what will happen to the other parent? 
• What if they spend all their money on frivolous things and don't have enough left when it's time to retire?
• How will they pay for medical expenses from unforeseen illnesses, such as dementia, cancer, or heart disease? 
• If they become incompetent, who will be in charge of the finances?

This blog post is designed to help you navigate these difficult issues.

Talking To Your Parents About Finances Can Feel Challenging

For the most part, it can feel emotionally and psychologically challenging to have to talk to your parents about how they are handling their finances. 

You may struggle with asking yourself how much you should help or what your responsibilities are. 

Legally, an adult child has no obligation to take care of his or her aging parents financially unless there is a contract that binds them to this responsibility (as in taking over running the parent's business). 

That being said, many people still feel an obligation to help their aging parents out and take on the responsibility of managing finances.

Prepare To Talk To Your Parents

Before going into a conversation with your parents about money, it’s important to be prepared. 

Understand your motivations in talking to your parents 

• Do you have your own worries about your parents’ situation?
• Do you just want to make sure everything is organized? 

Clarify what you hope to accomplish 

This might include: 

• Understanding their financial situation.
• Ensuring their preferences are met for the future.
• Making sure you both have a feeling of security about the future of their financial lives. 

Get clear on what you’d like to talk about during the discussion and make a list of points that are important to touch on. 

Things To Talk To Your Parents About

• What degree of responsibility they expect you to have.
• Their plans for retirement including how much they’ll have to live on each month and what their monthly maintenance bills will be.
• Their financial plans for assisted living or staying in their home if they should need care.
• Designating who will make financial decisions if your parents become incapacitated.
• Whether both parents have access to all financial accounts and passwords should something happen to one of them and whether there’s a system in place for others to access this information should they both pass
• Where important documents are kept like birth certificates, social security numbers, safe deposit box locations etc.
• Whether your parents have a will so that it’s clear what happens to their assets if they should pass and where their will is located
• Whether there’s a list of all investments, bank accounts, and savings accounts

Open Communication

It’s important to have open communication with your parents about finances. 

The conversation might go something like this: 

'Mom or Dad, we care deeply for one another and you know that I'm here to help in any way possible. But it would be really helpful if we could figure out how much money is coming in and how much money is going out so that we can ensure your future financial security. We need to talk about what will happen if you get ill and your plans for retirement.'

It’s also important to consider that your parents may not want your advice. You may encounter resistance if your parents feel as though you have ulterior motives or want to try to force them to take certain actions.

Bringing In Other Family Members

The best way to start addressing money issues is by talking about them openly with your parents and also including other family members who are involved in their care.

You may be able to work out a budget together that works for everyone or come up with ways of splitting the cost of living or responsibility for care so that everyone gets their needs met.

Bringing in other family members to do some of the caregiving can help you feel more balanced and less overwhelmed.

You might need a financial advisor or elder law attorney who has experience helping families manage these situations, this is especially true if your parents have dementia.

It's important to take time for yourself as well - talk with friends, get your own support system in place to deal with the stress of caring for aging parents and money.

Reasons There May Be Financial Conflict

There are a variety of reasons it may be challenging to have a conversation with your parents about money. 

There may be underlying family beliefs about money that haven't been discussed or are causing you or your parents to make decisions that aren't in your (or their) best interest.

You and your parents have issues related to money and attachment style.

You and/or your parents have trust issues with other people and money

There are entitlement beliefs about who is entitled to what, and these can create conflict if one person feels like they're doing more work than the other.

You might have a sense of self-sufficiency or independence that your parents don't share. 

You may be trying to balance emotional needs with financial ones, which could feel overwhelming at times.

There's an underlying sense of competition creating questions like "who has more responsibility?"

You might be feeling resentment because you are sacrificing your needs to care for them, and this can create conflict about money decisions.

The groundwork for these linked issues often goes back decades and the longer it continues unresolved, the worse it gets.

If you’re finding that you’re having some of these issues related to conflict about money it can be important to get support in talking to your parents. This might include a financial therapist or a financial advisor. 

There are other steps that can help you have a successful discussion with your parents about money. 

• Eight Tips to Help You Have Tough Conversations About Money to learn how to set the stage to navigate difficult money conversations. 

What To Do When Mom and Dad Need Help With Money to read some advice I gave a couple who wanted to help their parents with finances but didn’t know where to start.

Would you like more 1 on 1 support? Then perhaps Therapy Informed Financial Planning is for the two of you. I invite you to schedule your free 30-minute discovery call today.

Wishing You Healthy Love and Money,

Ed Coambs

MBA, MA, MS, CFP®, CFT-I™, LMFT

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