Another level of awkwardness comes up when you talk to your parents about money. People often push these problems because of their own past, pride, or desire for privacy. The “right time” that never comes never comes for many of us to deal with this problem. The moment you decide to talk about it, though, is the kindest and most helpful thing you can do. There’s no need to bother them; it’s all about getting ready: honouring their wants, saving money for their future, and being calm before it really starts to rain.
These talks are not the end goal; they are the way to get there. They want you to be patient, understand, and listen a lot. The main goal of these talks is to get you and them talking to each other all the time. With this way of thinking, you can pour yourself a cup of tea, take a deep breath, and talk about important money issues with your elderly parents in a more relaxed way.
Setting the Scene: How to Get the Talk Going
Setting a friendly and polite tone is very important before talking about the numbers. When and how you do it matter. Do not bring up this subject at a stressful holiday dinner. Find a quiet time by yourself. Tell them about something in your own life to get them interested. This can help it feel less like a questioning.
You can always say, “I knew I didn’t know where your important papers were because I was just making my own will.” If something goes wrong, it would be helpful to know exactly where they are. Using “I” words and talking about how you feel about something can help make it less awkward. When you ask them to help you with something, you give them power and lower their guard. Don’t forget that this is a discussion. It’s best to ask them open-ended questions and give them as much freedom to talk or not talk as they feel safe with.
The Big Picture: Looking at Their Financial Health
Understanding Their Income
First and foremost, you need to get a very rough idea of how their money is doing. You shouldn’t think that you’ll be going through their bank records back to date one. At least at first, it’s helpful to get a sense of their financial rhythm. Talk to them about the ways they make regular money. Do they depend on income and government aid? Are they linking it to money coming out of a savings account or some other kind of investment? The first piece of the puzzle is to figure out where the money comes from.
Discussing Their Expenses
Next, you can ask them nicely about their big-ticket costs. What kind of debt do they have to pay? Do they pay rent? What does a normal month look like? What are the property taxes, insurance, and energy bills? Health care costs a lot of money. In fact, out-of-pocket medical costs can be very hard to plan for, which means they can really hurt an older person. Because of this, it would be helpful to have a rough idea of how much they spend on medical bills. You and your partner can both see from this first summary whether their income is enough to cover their costs or if there are any gaps to think about.
Wills, Trusts, and Other Important Papers for Planning for the Future
This part of the process can get pretty emotional, but it’s likely the most important because it’s about making sure that their will and legacy are officially protected. The most basic question is whether or not the person wants to have their will changed. If someone dies, leaving a will can help their family avoid a lot of stress and disagreement in the future.
Besides the will, two other papers have also been thought to be very important. The person who has a durable power of attorney for finances chooses someone to handle their money if they become unable to do so. The other document is the health care proxy or living will, which says what the person wants for medical care and names someone to make choices about their care based on those wishes. The most important questions are not just whether these papers exist, but also who they are for and, more realistically, where on earth the originals are kept. If something goes wrong, this knowledge could save a person’s life.
What-Ifs: Long-Term Care and Health Care
Another important thing to think about when your parents are getting older is that they may need more medical or personal care soon. This is a very touchy subject that needs to be handled with care. Start by finding out what kind of health insurance they have now. They might be on Medicare. Do they have an extra plan to fill in the blanks?
Long-term care is a more important topic to talk about. In the event that the person could no longer live on their own, what would they want? Would they like to get help and stay at home? For this reason, a lot of families look into professional in-home care choices, like St. Andrews Home Care. Would they rather live in a neighbourhood for people who need help? If we have these talks before they happen, we’ll have more time to get ready for it and get their feedback on at least some of the decisions they make in the future. After that comes the money. If they need long-term care, do they have insurance or cash set aside to cover the costs, which can be quite high?
Unlocking Assets and Spreading Out for Safety
Your parents’ financial world extends beyond their bank accounts. For many, their largest asset is their home. Understanding the status of this asset is key. Is the mortgage paid off? Is the home well-maintained? For some, the value built up in their home represents a significant financial resource. Tapping into their property equity through a reverse mortgage or by downsizing can provide the funds needed for a more comfortable retirement or to cover care costs.
There are other options that should also be looked at. They might own stocks, bonds, or even real estate. Investing in some kind of physical good is popular among people their age. For example, if they’ve bought valuable metals over the years, it’s important to know where they are stored and if they have a trusted bullion dealer that both parties agree can help with valuation or possible liquidation. For a long-term plan to protect themselves that works, they need to know everything about their possible assets.
The Basics: Making a Roadmap
After these talks, further planning needs to be carried out in the real world. You can only use information if you can find it when you need it. Parents can then make a book or a safe digital file with a budget plan for their child or someone helping them.
This “master file” should have:
- A list of all their accounts, such as checking, savings, investments, and retirement plans, along with the names and account numbers of the banks.
- The contact information for any professionals your parents may have, such as a lawyer, an accountant, a financial manager, and maybe even an insurance agent.
- A list of all the strange places where papers like wills, birth certificates, marriage certificates, property deeds, and insurance policies can be found.
This well-organised master file will be a great gift because it will save them from having to rush around gathering information at the last minute while their loved ones are in court.
Acts of Love That Never End
Remember that you should talk to your parents about money more than once. These are a few small places where you can start a talk based on love and trust. Begin little. Don’t rush. Enjoy every little step forward as it comes. Talking to your parents gives them a chance to be heard, and it also makes you feel better in the long run because you know you are ready. This will help you set the stage for honouring their memory and taking good care of them.