Help Your Aging Parents With Their Finances

Your parents likely taught you all about money, helped you open your first bank account, and gave you an allowance. Sadly, over time, these roles frequently reverse themselves.

Many of us in our 40s and 50s find ourselves in the position that we must help our aging parents manage their money.

This can be awkward and difficult in some circumstances, but there are things that can be done to make the transition easier.

The Effect of Aging on Managing Finances

As with many other aspects of life, age may eventually impact an individual’s capacity to manage their finances and make wise decisions. A change in cognitive ability or even relatively minor health issues can have challenging consequences for handling their money.

It’s common for spouses to divide tasks over time. Perhaps one pays the bills while the other manages the investment accounts. This can be fine while both are still living, but ultimately, the surviving spouse will be left with additional responsibilities that they’re not accustomed to. Errors can be made, especially in times of grief.

Where to Begin

1. Insurance. While there are many issues to address, health insurance and long-term care coverage is critical. While never inexpensive, the likelihood of needing it at some point is quite high in older folks. Ensure the necessary insurance coverage is in place.

2. Savings. Make a real assessment of where your parents stand financially. How much is there? How likely is it to last throughout the remainder of their lives? Is the money invested in adequate places? Don’t be afraid to call in an expert if you’re not knowledgeable in this area.

3. Budget. It would be wise to take a look at their spending habits versus their income and savings. Are they spending the money they have wisely? Communicate with them about any adjustments you think they should make.

Getting More Involved

It’s usually wise for at least one the children to be added to all of the parents’ accounts. There are ways to do this that don’t permit the person added to the account to use or spend the funds, if that would make your parents more comfortable. But they still receive all the statements and are notified in the case of missing or late payments or any other issues.

Automating things as much as possible can be a huge help. This includes bill payments as well as any deposits, like social security. Instead of dealing with checks that have to be deposited, you can set up direct deposits whenever feasible. This can also include things like pension payments and retirement fund distributions.

If your parents have a large amount of equity in their home, but need more cash, looking into a reverse mortgage could possibly help them as well.

Helping with Estate Planning

Be sure that the proper person(s) will have legal authority to act on your parents’ behalf. Procedures regarding estates can be legally complicated and are dependent on the state in which your parents live. Seek out the proper legal advice sooner rather than later regarding such things as access to bank accounts, wills, trusts, medical decisions, and more.


When the time comes, it’s important to assist your parents with their financial decisions. You must respect their desire for independence while still providing them with the support they need. Don’t be afraid to consult a family therapist to assist with the transition, if needed.

The key is to be as respectful as possible. An attorney may need to be involved if your parents clearly can’t handle their finances and are unwilling to allow anyone to assist. Even if they resist, find a way to help – for your peace of mind as well as theirs.

7 Steps to Organizing Your Finances

You might not consider yourself to be an organized person, but your finances are the last place you want to be disorganized. Having too little cash at the end of the month is a challenge, but overdraft fees and late fees every month are an even bigger concern. By getting organized you dramatically cut down on the likelihood of these things happening.

Follow these steps and you’ll be more organized that you ever thought you could be:

1. Look at your budget every month. Ensure that your budget is accurate. No two months are ever the same, so be sure your budget reflects reality for the upcoming month. For example, electricity bills can be much higher in the summer if you use air conditioning or in the winter if you have the heat turned up.

* If you don’t have a budget, make one now! There are an unlimited number of resources available to make the job a lot easier. Budgets are critical. Your budget is your key to having your money work for you!

2. Utilize financial software. Some of the software available now can really help you to get organized, track your spending and bills, and help with budgeting. Many programs are free.

* You might actually find working with your money to be enjoyable when you can use a computer and specialized software. It’s a whole different experience than laboring over your hand-written figures on paper.

3. Keep all your bills in one place. Avoid leaving some of them on the kitchen counter, some in the junk drawer, and some on the desk. Having one specific location for all your bills will ensure that nothing gets lost, and it’ll also give you the best chance to ensure that everything gets paid on time.

* Store your bills close to where you normally sit and pay them. Keep them out in the open where you can see them regularly.

* When you’re done paying them, retain any records you need and shred everything else to protect yourself from identity theft.

4. Pay your bills weekly. Each week, pay any bills that are due in the next couple of weeks. Choose a day and make a habit of paying your bills on that same day each week. Developing good habits is a big part of staying organized.

5. Make a checklist of your bills. This should include all your recurring bills. Then, when the bill arrives, you can note the day it arrived, the amount due, the date it’s due, and the day you actually paid it. Any non-recurring bills can be added to the checklist when they arrive.

6. Communicate regularly with anyone who shares your account(s). Whoever pays the bills needs to know what the other person is doing with the account. Develop a system to ensure that the bill payer is kept in the loop at all times.

* Financial matters can be a source of stress in relationships, so work out an effective system before it becomes a challenge.

7. Have two accounts. Mishaps are a lot less likely to happen if you have one account that is only used to pay bills. Use a separate account for everything else.

Getting your finances well organized is a pretty simple task once you set up a system that works for you. Anytime you can eliminate financial clutter in your life, your mental chaos goes down and things seem to go more smoothly as well.

These seven tips will provide a great foundation for your organization effort. Regardless of how you’ve handled your finances in the past, you can put this plan into action today to make your future financial organizing easy and beneficial.