Managing Finances as Your Loved One Gets Older

Introduction

As our loved ones get older, it can become increasingly important to understand and help them manage their financial well-being. Most often, this is because of a decline in their health, but also to provide much needed assistance and remove some stress from their life.

Don’t let the awkwardness of the initial conversation get in the way of you providing that much needed support. Ageing brings with it a wide range of challenges, often in areas that we take for granted. To help ensure their financial security, and to give both them and yourself a peace of mind we've listed a few things you should know about managing a loved ones finances when they need the support.

Savings

If you're getting involved with helping a loved ones finances, familiarise yourself with their savings and any active investments they may have. If they have any private pensions, take notes of where they have invested their money and any savings accounts such as ISAs, as they may have multiple accounts. Quite often, people will have multiple pots held in different locations, which can become difficult to track down over time.

Monthly Expenditure

Get a good picture of your loved ones incomings and outgoings for the month, including any benefits, pensions and any other sources of income.

What do their regular household bills, mortgage or rent payments look like? Knowing what their monthly cash flow and expenditure consists of will give you a clear insight of their financial stability and areas where savings could be made. Offer assistance if you feel they require help with organising their finances, paying bills, or managing their investments. Consider automating payments and creating a budget where you can.

Personal Documents

Check with your loved one about their estate plans and arrangements, and find out if they posses a will or if they have a power of attorney in place.

You will need to locate and keep in a safe place their personal documents such as birth certificates, passports, financial account details and such.

Knowing where they keep their important documents and understanding their exact wishes will make things easier when it comes to navigating those legal maters in the future.

Debt

Determine if your parent’s have any debts which are outstanding, such as mortgages, loans, finance or credit card debts. After examining their monthly expenditure, you will be much better placed to assess if they are able to manage and repay their obligations. You may find that an old credit card is incurring high levels of interest when repaid with low monthly payments - such a product would be a priority to clear in order to minimise high interest payments.

Professional Assistance

Find out if your parents use the services of any financial professionals such as a financial advisor or an accountant.

Obtain their contact information and get a clear idea of their professional relationships. Having established a connection with them will be valuable when needed.

Digital Finances

Security is so important, particularly when it comes to finances. Follow the best practices of the bank (or banks) that your loved ones use. Having a secure password manager in place, such as LastPass or similar service will help to ensure that the accounts are kept secure but accessible when needed.

Long-Term Care

You may also need to discuss the topic of long-term care with your loved one.

Exploring such options as assisted living, a care home or home care. Understand their wants, needs and preferences and what the financial implications are of each option, as well as looking at what support may be available locally.

Communication

Maintaining regular, open lines of communication with your loved one regarding their financial situation is important to get a strong grasp on things.

In addition, encouraging transparency will assure them that your intention is to support and help them. Try to regularly review and update their financial plans as and when circumstances change.

Staying Safe

Have a conversation with your parents about fraud and scams, educate your parents on how to stay safe online and on the phone.

You can find more information in our previous article How to Protect Yourself From Fraud & Scams.

Signs Your Loved One May Be Losing Track of Their Finances

There are a few tell-tale signs where you might decide it's the right moment to intervene. These include:

• You notice unopened letters in their home
• They are forgetful about money and what they have spent, the contents of their wallet/purse
• Increasing complaints of having little money

Even if your parents or loved ones are showing no worrying signs, it is still a good idea to familiarise yourself with their finances as they get older.

This ensures they will be more comfortable in including you in the important financial decisions that arise and will have extra support from someone they trust.

Conclusion

Taking an active role in helping with your loved one's financial affairs requires a caring, pragmatic and responsible approach.

By familiarising yourself with these important aspects of their personal finance, you will be able to ensure their financial well being and provide them with valuable support as they need it during their later years.

Early preparation and ongoing clear communication are key to navigating the complex financial landscape of ageing.