Money is a sensitive topic, especially for seniors. Nobody is looking forward to getting older but it’s a natural part of our lives. We will all get older inevitably and it may be difficult to make important life decisions. If you prepare and help your aging parents with their finances, it will be really beneficial.
Managing financial matters is a significant part of caring for an aging parent. Keep on reading to find out some suggestions on how to help your loved ones organize their finances and discuss what they need to improve them.
Why You Should Help Your Parents with Their Finances
We all know that money is a rather sensitive topic. Not many people are eager to discuss their matters with personal finances, especially seniors. It can be challenging to persuade them that they need assistance. So, you need to have a gentle approach when it comes to helping your aging relatives or parents with their finances. If you notice that they make unwise purchases, get confused with their bank accounts, or forget to pay their bills, it’s time to take action.
Even when they realize their problems, they may still be resistant to letting you get involved in their personal finances. Similarly, when you seek quick loans Ontario you just want to cover your expenses without telling other people about your pressing needs. Try your best to be patient, go slowly, and keep them included. The following tips will help you make this process less overwhelming for your aging parents and help them with their finances.
Financial Literacy among Seniors
Here are the main tips and proactive pieces of advice to help your parents manage their finances as they age. If they have a financial advisor, you should consult with them as well on the steps you take.
A coordinated and sensitive approach is important in this situation. The Financial Consumer Agency of Canada published research on National Strategy for Financial Literacy Phase 1: Strengthening Seniors’ Financial Literacy to help aging Canadians improve their financial literacy. This is considered to be a critical life skill for all Canadians.
The Government of Canada is leading the development of a national strategy for financial literacy. This strategy will guide the work of public, private, and non-profit organizations. This National Strategy has four main goals:
- To engage more Canadians in preparing financially for their future years as a senior;
- To help current seniors plan and manage their financial affairs;
- To improve understanding of access to public benefits for seniors;
- To increase tools to combat financial abuse of seniors.
Photo by Matt Bennett on Unsplash
Tips for Helping Your Aging Parents with Their Finances
#1 Evaluate and Start the Conversation in Advance
You can’t find the perfect moment to start a conversation about finances. This is a rather sensitive topic and many Canadians prefer to deal with such matters on their own. But it would be great to begin it sooner than later. Your parents may be still active and independent today, but they might need additional assistance down the road.
Besides, you may need to have this conversation about their finances while your parents are still mentally capable and healthy.
#2 Respect Their Decisions
You should respect your parents and the decisions they make. If your parents still can manage their own finances, work with them rather than take over. They may appreciate your assistance in helping them with bill payments and certain details. It will be a smooth transition and they will feel more secure and accept your help as they will notice you don’t want to take away their control.
You have the right to make decisions on their behalf and take over only if your parent has a cognitive impairment or dementia. However, make everything possible for them to feel included even if they can’t cope with everything anymore. Make sure you discuss this matter with other relatives so that they understand you are acting in your parents’ best interests.
#3 Collect Important Documents
Elderly people may often store their things in unusual places. Your parents may use a safe, a deposit box for storing things and even keep some of them in their underwear drawer. Make certain you know where they store important papers.
You may decide to make additional copies for yourself in case they forget or lose some documents. It’s great to have them beside you when you urgently need them. Here are the examples of important documents to gather:
- Bank and brokerage statements;
- Insurance policies;
- Wills;
- Pension records;
- Home mortgage or reverse mortgage;
- Car title;
- Safe deposit boxes;
- Social Security boxes.
#4 Get Access to Financial Accounts
Another important step is to get access to your parents’ bank accounts. It demands some paperwork and planning. Financial institutions and local banks have strict regulations about who can access checking accounts. They may require you to provide your own documents even if you already have a Power of Attorney.
You can become authorized to perform transactions in order to withdraw money and write checks. Your parent can authorize a “deputy” or “agent” so that you get access to a safe deposit box. Consult with an elder law attorney, a fiduciary, or a financial planner before you sign paperwork and get access to any accounts to avoid negative outcomes.
#5 Prepare for the Future
Now is the time to encourage your parents to meet with a lawyer and begin the process if your aging parents don’t already have an estate plan or a will. These are the major legal documents that are really important as they affect the way their assets will be distributed once they pass away. Make sure you also complete other significant legal papers like a living will or a Power of Attorney.
The Bottom Line
Managing finances is an important part of caring for an aging parent. Follow these tips to help your seniors with their finances, collect all the documents, get access to their financial accounts, and start the conversation about finances as early as possible.
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