It can be daunting to find yourself in a situation where you have to manage your elderly parent’s finances. Your parents may have looked after you your whole life and now they need support to live well and manage their own financial affairs.
If you’ve noticed some changes in your parent’s ability to manage their own finances, like forgotten payments or unpaid bills stacking up, then it is probably time for a frank discussion. Financial stress can quickly lead to anxiety and depression in older people and negatively impact your parents’ quality of life.
In this guide, we look at how to manage your elderly parent’s finances. You’ll find tips on how to manage your parent’s finances should the need arise.
WHY ELDERLY PARENTS MAY NEED HELP MANAGING THEIR FINANCES
As our parents get older, there are many reasons why they may need help managing their finances. Some people simply need a bit of extra support organising their finances or setting up online payments, while others may benefit from a family member or qualified professional completely taking over the management of their finances.
Some common reasons elderly people may need help managing their finances include:
- Cognitive difficulties: Our cognitive abilities can decline as we get older, making it difficult to handle complex financial tasks, such as budgeting, paying bills, or managing investments.
- Health conditions: Memory loss and health conditions like dementia can make it difficult for people to keep up with their finances.
- Physical limitations: Physical health issues or mobility concerns can prevent elderly parents from visiting banks, ATMs, or financial institutions.
- Problems with digital technology: Online banking and digital technologies can be overwhelming for those not accustomed to them. Elderly parents may need support in navigating these devices and improving their digital skills.
- Increased vulnerability: The elderly are often targeted by financial scams and fraud. They may lack the knowledge or awareness to protect themselves from these threats. Talk to your loved ones about staying safe online. Age UK offers great advice.
SIGNS YOUR ELDERLY PARENTS MAY NEED HELP MANAGING THEIR FINANCES
It can be quite difficult to determine when it’s time to step in and ask your parents if they would like help in managing their finances. You may be apprehensive about starting the conversation too early and offending your parents.
Here are some common signs that an elderly loved one might need some support with their finances. If you notice some of these signs, it is probably time to at least begin the conversation.
- They lose cash or forget to withdraw money.
- They struggle to recall their bank account details or PIN numbers.
- Mail or bills are left unopened.
- They express worries about their financial situation or frequently voice concerns about not having money.
- Handling basic financial tasks like making bank calls, managing cheque books, or counting change becomes increasingly challenging and stressful for them.
- They have been the victim of a financial scam.
HOW TO HELP YOUR PARENTS MANAGE THEIR FINANCES
In an emergency situation, you may have to help your parents manage their finances and pay their bills. Many families find themselves unexpectedly in this situation – would you be prepared?
If your parents are still of sound mind and capable of looking after their own affairs, you should only intervene with their finances with their consent or in an emergency situation. If you are concerned about some aspect of your parent’s financial affairs, it is always best to have a frank discussion with them. Be sure to listen to your parent’s concerns and their wishes regarding how they want their finances handled.
If your parents agree to accept support in managing their finances, here are some practical tips:
Make a list of your parents’ accounts
A list of important accounts and payments is always beneficial to have. This information will help you keep track of any bills or outgoing payments and what financial responsibilities you may have to manage for your parents.
You may want to include information about the following:
- Debit and credit card accounts
- Mortgage or rental payments
- Social and government benefits
- Household utilities
- Loans and other long-term payments
Consider a payment schedule
If you do find yourself having to manage your parent’s finances, you should consider creating a payment schedule. This can help you stay on top of bills and other important payments during what may be a stressful time.
There are lots of tools and modern apps that can help with this – from physical calendars to financial management apps for your smartphone. The key is to find your own system that allows you to stay on top of important payments so nothing gets missed.
Gather documents and personal information
There are several personal and legal documents that are important throughout all of life, but especially as we get older. It is a good idea to gather all of this documentation and keep them in a safe place.
Remember that medical information, such as information about prescriptions and emergency contact numbers, should always be kept in a visible place in case of an emergency. Let family members, close friends and caregivers know about the location of this information.
As you gather these documents, check for any that need updating now or in the near future. Consider placing reminders for documents that have been renewed on a calendar as a helpful reminder.
Some of the documents you may want to gather include:
- Important medical information
- Power of Attorney documents
- Identity documents like passports, birth certificates, and driver’s licences
- Marriage and divorce papers
- Property deeds, wills and estate plans
- Insurance policies and cards
- Bank and financial account details vehicle titles
- Safety deposit boxes and contents
Review investments, loans, and other accounts
It’s always good to double-check investment plans, loan terms, and other accounts if it’s been a long time since anyone has looked at them. The critical eye of a qualified expert can help you stay on top of these investments and make sure they are aligned with your parent’s current financial goals and risk tolerance.
Consider professional help
If you feel overwhelmed by the task of helping your parents manage their finances, there are plenty of support services available to you. Start with your own family members – it can be overwhelming to start managing someone else’s finances on your own. Professionals like financial planners and advisors can provide expert assistance with these important responsibilities. Age UK provides great advice.
MANAGING FINANCIAL AFFAIRS IN THE LONG-TERM
If you intend to help your parents manage their finances on a long-term basis, you may want to consider a legal document known as a Power of Attorney. A Power of Attorney is when a person, known as the donor, authorises another person or persons to make certain decisions on their behalf.
Anyone over 19 can make a Power of Attorney as long as they understand what they are signing (this is known as having ‘mental capacity’). If you have a parent in the early stages of dementia or living with a health condition that may affect their ability to make decisions now and in the future, then it is important to set up a Power of Attorney early. It is much more difficult to set up once the person loses the capacity to make their own decisions.
If your parents never lose the capacity to make their own decisions, the Power of Attorney document simply lies dormant and ready to use should it ever be needed.
DISCUSSING CARE OPTIONS
When discussing your parent’s finances, it is also important to consider their care needs, especially as they grow older. It is normal to need an extra helping hand at home as we age, especially if your parents live far away from family or live with a complex health condition. Having a frank and open discussion with your parents about their care needs now and later avoids the uncertainties and stress of last-minute decisions.
It is important to ask your parents about their own needs and requirements. Their wishes should always guide the discussion and the types of care options you consider. You will want to discuss whether your parents will fund their own care or if they are entitled to any government funding to help cover the costs. Care needs change over time, so you’ll want to discuss possible future scenarios.
HOME CARE FUNDING RESOURCES
If you require independent information and care funding advice about your home care funding options, there are a number of charities and advisory services that can provide you with valuable care funding guidance, including:
EXPERT HOME CARE FROM THE CARE EXPERTS
Prestige Nursing & Care provide high-quality, personalised and expert home care services for every stage of life that evolve with the changing needs of those we care for. Our comprehensive range of services provided by highly trained carers, registered nurses and clinical experts ensure our clients receive the right kind of care at the right time, all delivered right at home.