How to Budget With Care for Elderly Parents

Summary
Find the best tips for Managing your Elderly Parent's Finances and Budget. Help your loved ones by assisting them with their financial situation.
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Our parents care for and nurture us throughout our lives. But as we grow older — and they grow older — many of us find ourselves taking over the role as caregiver. Helping elderly parents is a labor of love that can come with its share of difficulties, especially when it comes to managing money. When your parents can no longer handle their own finances, you may need to step in and take care of those important responsibilities. Here is some helpful advice to help you budget for your elderly parents.
How to start the conversation with your loved ones
The topic of taking over elderly parents’ finances can be a touchy one, especially if they haven’t fully accepted that they need your help. Start the conversation slowly. Instead of having a big sit-down where you take over everything all at once, it may be better to begin helping elderly parents with just a bill or two first. You could say something like, “It’s been so much easier for me to have my utility bill automatically deducted every month, so I don’t have to worry about forgetting to pay it. Let me help you set up the same for you.” The key is to make them comfortable with the idea first.
A Checklist of Tips for Budgeting for an Elderly Parent or Loved One
Whether your parents are on a tight, fixed income or fairly well-off financially, the responsibilities that come with helping them manage their money can be equally as challenging. This checklist can help you navigate how to manage elderly parents’ finances:
Make a list of their financial documents. A big part of protecting elderly parents’ assets is determining exactly what assets they have. If you don’t know how much money your parents have available, where their important documents are located in the house or whether they have any outstanding debts, now is the time to find out. Help them gather up their most recent statements from their bank, investment, mortgage and loan accounts. Find copies of their various insurance policies, including health, life and auto coverage. Know where their passports, birth certificates and any military service documents are kept. And if necessary, move those documents to a safe place. Keep their medical history and a list of their various doctors’ information together in one place. (It’s a good idea to keep their primary care doctor’s number stored in your phone for easy access.) And finally, make sure they have a will and advanced directives in place to make sure their final wishes are respected.
Look for ways to eliminate or simplify bills. Setting up automatic payments for utilities, insurance, credit cards and other recurring bills can give you peace of mind that your parents’ bills are always paid on time. In addition to auto pay, look for any bills you can get rid of. For example, if they’re still paying for newspaper delivery but have a stack of unread papers in the garage, that could be one bill they no longer need. Be sure to let them know and get their approval before you end any services or set up automatic payments for them. When dealing with elderly parents, open communication is key.
Create a budget. Once you get a better understanding of where your parents stand financially, creating a monthly budget can go a long way toward helping elderly parents with day-to-day household finances. Steps for creating a budget include getting a clear picture of all income, listing all expenses, cutting costs where possible, putting aside money for savings and setting a reasonable amount to allow for day-to-day expenses.
Look into getting power of attorney. This important document can prove invaluable for taking over elderly parents’ finances legally and can help with other affairs like medical and property decision-making when your parents become incapable of handling these things on their own. An estate planning or elder law attorney can help you arrange power of attorney for an elderly parent to meet your family’s needs.
Take time for yourself. According to a recent survey, 25% of Americans are part of the “sandwich generation,” meaning they are both taking care of a minor child and helping elderly parents.1 With so much on your plate, it’s easy to get wrapped up in caring for your family that you forget to check in with yourself. Try not to get overwhelmed. If possible, seek help with caregiving from other family members to lighten your load.
When should you intervene in your elderly parent’s finances?
It may be hard for your parents to admit that they need your help with managing their money. So, if they don’t ask you to step in, it’s important to know the signs. Look at their bank statements for odd changes in their spending habits. Check their mail for bill delinquency notices. Or check to make sure they’re opening their mail at all. Ask if they know how much money they have in the bank right now. It shouldn’t take long to see if they need your help and just how much you need to intervene.
Start the conversation sooner than later
Although it’s not an easy conversation to have, you shouldn’t put off talking with your elderly parents about their finances. If you wait too long, you may not be able to get clear answers to key financial questions. Losing a big part of their independence can be difficult to accept. But with patience, communication and understanding, you can show they’re not alone and that you’re in this with them every step of the way.
1. https://www.pewresearch.org/fact-tank/2022/04/08/more-than-half-of-americans-in-their-40s-are-sandwiched-between-an-aging-parent-and-their-own-children/
This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.