Navigating money conversations with aging parents

Discussing finances with your parents can feel awkward and challenging. After all, they were the ones teaching you about money, and now the roles are reversing. However, addressing their financial situation is as crucial as discussing their healthcare needs, and it shouldn’t be avoided.

Every family’s financial situation is unique. It’s essential to be receptive and sensitive to the specific challenges older adults face, especially since they might view money as a private topic.

Here are some best practices to follow when it’s time to have an open and productive dialogue with your ageing parents about their finances.

Identify the signs that a financial conversation is needed

Your parents might not reach out if they need financial help, and they may not realise they’re having issues.

Relinquishing financial responsibilities can feel like losing autonomy, so be patient. Watch for these red flags:

• Disorganisation in daily life: Are household chores neglected? Is the house becoming unruly or bills piling up? This might indicate that they are struggling to manage daily tasks, which can spill over into financial mismanagement.
• Memory issues: Are there reminders for basic tasks like using the TV or starting the dishwasher? Increased forgetfulness can lead to missed payments or poor financial decisions.
• Unpaid bills: Notice any stacks of unpaid bills or collection notices? Accumulating unpaid bills may indicate they are struggling to keep up with their financial obligations.
• Risky investments: Be wary of them engaging in too-good-to-be-true investments, as older adults are often targeted by scams. Fraudulent schemes can quickly deplete their savings and compromise their financial security.

Recognising these behaviours can indicate the need to step in and discuss their financial situation to prevent potential crises.

Find the right moment for the discussion

Timing is crucial. Avoid busy or stressful periods, like holidays. Approach the conversation with empathy and sensitivity and find a private and comfortable space with minimal distractions.

Ensure everyone involved has time to devote to financial conversations with ageing parents. Consider scheduling a time that allows for a relaxed and uninterrupted discussion, fostering a more open and honest dialogue.

Prepare yourself emotionally and mentally

You may feel uneasy influencing your parents’ financial decisions.

Reflect on your own emotions and seek professional guidance if needed. Manage your expectations, understanding this will likely be an ongoing dialogue. Set realistic goals for the first financial conversations, such as understanding their current financial situation and identifying immediate concerns.

Being mentally prepared will help you approach the conversation with patience and empathy, facilitating a more productive discussion.

Ease into the conversation with open-ended questions

Ease into the conversation. Avoid starting with statements like, “You don’t know how to control your finances anymore, so I’m taking over.”

Create a non-judgemental atmosphere by starting with open-ended questions or share your financial experiences to encourage financial conversations. For example, ask about their financial goals and concerns or share a personal story about a financial decision you made recently. This can make the conversation feel less confrontational and more collaborative.

Compile a complete financial overview

To get a complete picture of your parents’ finances, list all income sources, expenses, and assets.

Review their tax returns and gather essential documents such as wills, durable power of attorney, bank accounts, tax returns, pension documents, life insurance policies, and details of loans and debts. Organise these records to have a comprehensive view of financial conversations. Understanding the full scope of their financial situation will enable you to provide better support and identify areas where they might need assistance.

Plan for the future with estate planning

Ensure critical estate planning documents are in place, such as wills, trusts, beneficiaries, and powers of attorney.

Explain why these documents are important and ask for access to their assets as part of your financial conversations. Estate planning is crucial for ensuring their wishes are honoured and their assets are managed according to their preferences. Discussing these topics may be uncomfortable, but it’s essential for their long-term financial security and peace of mind.

Address long-term care and healthcare costs

Healthcare and long-term care are significant expenses.

Understand your parents’ healthcare coverage, any health concerns, and their preferences for living arrangements if they can no longer live independently. Discuss their end-of-life wishes and who they want to handle their healthcare needs. Planning for potential healthcare needs and associated costs is critical for ensuring they receive the care they desire without compromising their financial stability.

Educate on scams and financial security

Older adults are often targeted by scammers. Educate your parents about common scams and encourage them to monitor credit activity and set up identity theft protection.

Establish open communication so they feel comfortable discussing any issues. Discuss practical steps they can take to protect themselves, such as being cautious of unsolicited phone calls and emails, and regularly reviewing their bank statements and credit reports.

Seek professional assistance if necessary

Handling your parents’ finances might require professional expertise. A financial adviser you trust can help assess their situation, handle conflicts, and organise paperwork. Professional guidance can provide valuable insights and ensure that their financial plan is comprehensive and tailored to their specific needs.

Approach financial conversations with ageing parents with empathy and understanding. By working together, you can support your parents in building a safeguarded financial future.

If you have questions about starting money conversations or if your parents need professional advice, get in touch with our team at today.