5 Tips on Managing Finances for Elderly Parents

Taking care of your parents as they get older can be a significant responsibility, and there may come a day when you’ll need to step in to help manage their finances.

Conversations about money can be challenging, so it’s a good idea to start creating a plan as early as possible. Getting familiar with your parents’ finances ahead of time will help you understand how to support them when they need to lean on you.

Here are a few tips to think about.

1. Start the conversation early

Even if your parents don’t need help right now, it’s important to anticipate the challenges that may come up as they get older. One way to ease into the conversation is to ask your parents what they think they may need help with down the road.

If your parents have certain ideas or plans in mind, familiarize yourself with what they are. This can help smooth the transition when they’re ready for you to step in. For instance, they may want help keeping track of their expenses, payments, and accounts online.

To be sure, talking about money can be difficult for many people, so approach these conversations with sensitivity. Keep in mind that it’s not about you taking over but rather about you helping them navigate their finances with confidence.

Good to know: Getting written consent from your parents for you to help handle their affairs is also something to consider. This would make it easier for you to access their accounts and act on their behalf. Consult a lawyer to learn about your options and what’s most appropriate for your needs (e.g., power of attorney, living will, etc.).

2. Get organized

Ask your parents about their sources of income and expenses, as well as their financial accounts. Organizing the information can help you get a better understanding of their financial life.

Sources of income may include the following:

• Pension or retirement accounts (e.g., 401(k)s, IRAs, etc.)
• Health Savings Accounts
• Social Security benefits
• Investment accounts
• Savings accounts

Expenses may include:

• Food, utilities, and transportation
• Health care costs such as insurance premiums and any recurring medical expenses
• Home and car insurance
• Property taxes
• Debt payments

If your parents work with a financial advisor, they may be able to help gather information about your parents’ income, assets, and expenses.

It’s also important to know where your parents keep important personal, legal, and financial documents, such as:

• Estate plans
• Tax records
• Legal documents (marriage license, divorce record, powers of attorney, wills, etc.)
• Credit cards
• Titles and deeds
• Safety deposit box
• Key contacts (doctors, lawyers, advisors, etc.)

3. Be mindful of their needs and introduce changes gradually

The idea of asking their adult children for help may be difficult for some parents, so they may avoid the conversation or ignore their challenges altogether. But here are some indicators that your parents may need help:

• They often talk about how hard it is to get online to pay bills or access their bank accounts.
• There are unusual purchases on their credit cards.
• They’ve fallen victim to scams.
• They’re having a hard time keeping up with their financial obligations.
• They don’t understand the bills they’re getting in the mail.

If you notice these behaviors, it’s important to talk to your parents about them and ask how you can help. You don’t have to dive right in and take over every aspect of their financial life. In fact, it’s a good idea to introduce changes gradually, so that your parents can adapt to them as they come along.

For example, you can start by helping them with simple tasks like setting up automatic payments or reviewing their bank or credit card statements with them each month. Help them simplify their finances where you can.

4. Help them stay safe online

We spend much of our time online these days, whether it’s reading the news, shopping, banking, or paying bills. It’s important to make sure your parents are aware of common scams in the digital age.

Scammers often target older adults in their phishing attempts, pressuring or threatening them to give up personal and financial information. Help your parents learn how to spot and avoid a scam. Let them know that they should never share their personal information over unsolicited phone calls or emails. Check out our article on cybersecurity basics for more tips you can share.

Good to know: Consider signing them up for credit monitoring and account transaction alerts to help them keep an eye on their money.

5. Communicate clearly and know when to ask for help

When you’re ready to step in, let your parents know what you’re doing every step of the way. For example, if you’ve made a change to an account or help them set up automatic bill pay, let them know. That way, they won’t feel as if you’re taking over but rather, offering support where it’s needed most.

Managing your own finances can be hard, and helping someone else manage theirs can add to your stress. So know when to ask for help if you need it. 

For example, see if your employer offers resources like elder care planning. Check with respected local agencies and ask friends how they are navigating similar topics. If you have siblings, reach out to see how you all can coordinate your efforts. And if your parents have a financial advisor, contact them to see how they can be helpful.