Recognize The Signs That Your Aging Parent Is Struggling With Money Management
A question that has come up a few times is, “how do you know if you need to manage your parents’ finances?” It’s a difficult topic. Finances are usually private, even among family members. And sometimes, we think we know what’s best for our aging loved one but our bias or intention may not be as pure as we think.
I’ve had people tell me that they want to step in to handle their parent’s finances because their parent is spending too freely or not being as cautious as they would like with their spending. While you may not like how your loved one is spending money, it isn’t up to you to decide what he or she does with their money unless you are certain that they’re not able to manage on their own.
So, how do you know if it is time to step in?
Stepping In To Help Aging Parents With Finances
Not everyone will need help with their finances. In fact, many people will be able to manage their finances on their own until their last days. That being said, it is a good idea to have the discussion about finances, and even moving forward to handle the legal issues surrounding caregiving, regardless of how healthy and capable your aging parent is. It will make things easier if they ever fall ill or get to a point where they can’t handle their finances.
Here are some common situations that come up that may make an adult child question their aging parent’s ability to manage their finances and whether they are valid reasons to step in.
Situation 1: Your mom has been purchasing expensive items for family members and/or close friends.
Is this a sign that she can’t manage her finances? Well, it depends on why she is gifting and how frequently she is doing it. If your mom has always been on a tight budget and has recently decided that she wants to make her loved ones happy while she’s around, there’s no reason to be concerned, so long as she can afford to do so. It also isn’t concerning if she has the means to do so and is paying her bills/managing her finances. You should be concerned if someone is coercing her into gifting large sums of money or if she is gifting money or items but can’t afford to do so.
Situation 2: Your mom is suddenly taking trips, visiting friends or making large purchases she didn’t make in the past.
Is this something to be concerned about? Well, no…unless she is going through all of her money in the process. If your mom is suddenly spending money more freely in the past, she may finally be comfortable that she has enough money to enjoy life a bit more. So long as she is able to support herself and manage her expenses in the future (meaning she’s not burning through everything now), it really isn’t your concern. While it may be frustrating because you may have been counting on an inheritance in the future, it is your mother’s money to spend.
Situation 3: Your mom has a new friend or boyfriend and she is thinking about adding that person to her will.
Is this something to be concerned about? Maybe. Does it seem like the person is coercing your mom into adding her to her will? Is your mom doing things with her money that are completely out of character. Of course, if your mom is lucky enough to make a good friend or meet a wonderful partner later in life, that should be celebrated. I would suggest speaking to your mother about holding off on making any long-term changes until the relationship is more established.
Situation 4: Your dad has piles of unopened mail stacking up and seems overwhelmed managing his budget.
Is this something to be concerned about? Yes. Your dad is likely struggling with the task of managing his finances. He may be embarrassed that he isn’t able to manage his own finances so broach the topic gently.
Before you try to step in to manage your parents’ finances, you need to think about whether you are doing it for the right reasons. Just because your parent isn’t spending his/her money how you think is right, doesn’t make it wrong.