When Should You Talk Money With Your Parents?
3 things to ask about their financial situation to see if they need help
Editor’s note: This is the fifth in the Next Avenue “When Should You…” series on aging milestones for parents or loved ones. With our partners at the Benjamin Rose Institute on Aging, we will address common caregiving concerns.
It’s tough to talk about money — especially when it’s an intergenerational conversation.
But not talking about it with older loved ones will leave you clueless about their current and future financial situation, and it can leave them open to financial exploitation or abuse.
According to Bert Rahl, the director of Mental Health Services for Benjamin Rose Institute on Aging, “the range of scams and exploitation and outright stealing seniors may encounter is enormous.”
(MORE: 5 Steps to Combat and Prevent Elder Abuse)
When you are talking about money with your loved ones, you should be inquiring about three things, says Rahl:
1. How is your loved one managing his day-to-day financial matters, such as banking and bill paying, mail solicitations, and/or charity, home repair or phone scams? “You don’t need to know all the details of how they handle things,” Rahl says, “but you do need to know that they are handling them. And how.”
2. Where are their financial assets? Checking, savings and retirement accounts are just the beginning. They may also have: real estate (personal and investment); pensions and annuities; stocks, bonds and investments; life insurance and prepaid funeral policies; jewelry or precious metals and antiques and hobby-based collectibles, such as stamps, coins, Hummel figurines or Madam Alexander dolls, that can be “monetized.”
(MORE: How to Keep a Parent Safe From Financial Abuse)
3. What are their plans for their financial future, and the new role (not role reversal, stresses Rahl) that you may need to assume if and/or when your loved one can’t handle things anymore?
This discussion will help ensure that you know and understand your loved one’s financial priorities, values, goals and aspirations. It also builds the kind of trust that can make acceptance of your parent’s new role — and yours — easier.
That happens, says Rahl, “when you’ve discussed things — had real give-and-take-discussions. You understand what they want, as well as what they need.”
How to Start 'The Talk'?
So where do you begin? Rahl suggests a direct approach.
Ask your parent if he is having any problems paying bills. How is he managing his investments or rental properties? How are his finances holding out? Does he need anything or is he having any problems paying for things?
If there is a problem, don’t jump in and solve it, especially if it’s minor. Instead, says Rahl, “offer to help him figure out how to solve it.”
If direct isn’t your — or your loved one’s — style, talk about your own (or hypothetical) concerns.
(MORE: 8 Things Not to Say to Your Aging Parents)
For example, bring up how exasperated you are about all the charity calls, home repair flyers or magazine renewal letters you are getting. Ask your parent if he, too, is being inundated with solicitations, and what he is doing about them.
Or mention that bill paying has become such a chore that you’ve started paying some of your bills online. Ask if he wants to try it, too.
Or discuss the garage sale you are having and ask if there’s anything he’d like to sell. Offer to pick up, and help him price, things the day before the sale.
If talking about personal/hypothetical issues doesn’t work, talk about what’s happening — especially bogus medical “breakthroughs” and scams — in the news.
“Everyone pays attention to the news, so those kinds of stories are pretty good conversation starters,” says Rahl.
“But,” he cautions, “if they just won’t talk, accept it. Just because you think it’s time to talk [with your dad] about money doesn’t mean he does.”
You may need to try again later, or perhaps enlist another sibling or trusted friend to get the conversation going.
For more information:
Money Smart for Older Adults (Consumer Finance and Protection Bureau guide)
Next month: When should you encourage your parent to leave the “old homestead?”