Talking About Finances

Posted by on Apr 14, 2013 in Financial and Tax Matters, Power of Attorney | 0 comments

Many families experience problems with financial discussions – and therefore avoid them. The older generation may avoid discussions with adult children out of fear of losing privacy and control. Adult children may wish to respect a parent’s privacy but they wonder – not only about a parent’s well-being, but also whether a parent’s finances could affect their own retirement plans. In other families, money is a taboo subject or one that simply brings up too many negative emotions. 

Why do adult children need to talk about money with their aging parents?

First, knowing a parent’s situation can help adult children plan their own financial future. Second, being aware is especially important if an adult child has been appointed financial power of attorney for their parent. Third, a trusted adult child can stay alert and offer support when an older person’s health issues make dealing with finances more demanding. 

As we get older, dealing with chronic health problems, pain, medication side effects, and vision loss are among our physical challenges. There are mental and emotional challenges, too. They can include increased anxiety and depression, as well life changes, such as losing a spouse (who may have been responsible for finances). All these factors can make dealing with money matters more challenging.
 
Here are some early signs that finances are getting more challenging, either for loved ones or for ourselves:
 
  • Trouble balancing bank statements
  • Unpaid bills, notices or statements stacking up
  • Penalties for late payment or services and utilities being cut off
  • Trouble reading fine print or understanding financial notices
  • More stress about paying bills and looking after finances
  • Changed spending patterns or behaviour
So where can we start if we have concerns? Here are some strategies for adult children that can help open doors with this sensitive subject.
 
Assist with minor, routine tasks.
For example, suggest automatic debits for recurring bills or help introduce someone to on-line banking. This can give you some insight into someone’s finances. Once bigger issues or tasks arise later, working in tandem won’t seem such a drastic change.
 
Ask for their insights.
If someone seems financially aware and is an active investor, start a conversation about investments to get a sense of their approach. Alternately, set the stage by asking about older persons’ insights from experiences such as the Great Depression or other financial setbacks. In the process, personal values can be uncovered, and that can create greater trust and open doors for deeper discussion.
 
Ask them to help give you peace of mind.
Let your parents know you’ve been concerned and that you would feel better if you knew more about their plans. Point out that you could be the “go to” person who will need information in a crisis. If you have read or know of a case where a family was financially unprepared, sharing their story can provide food for thought.
 
Once trust is established, ask to participate in financial planning.
It’s no secret that investment options today can be complex. Sound financial advice is more important than ever. If your parent uses an advisor, ask if you can come to a meeting with their advisor – as an observer. Notice whether your parents are following along and involved with the conversation. If they don’t have an advisor, encourage them to get appropriate financial advice.
 
When should we begin?
Ideally, start conversations even before you notice warning signs. Because retirement planning and financial planning are closely tied, this is a good trigger event for starting a dialogue. Another milestone may be when parents turn 65 or 70; at this age, health issues may crop up, and the “what if…?” questions may be top-of-mind for both generations.
 
Most important, treat this as a process, not a single event. Gradually open up conversations about how your parents have prepared their finances in case of an emergency. Next time you talk, expand the discussion. Taking one step at a time, put a plan in place that will afford peace of mind for everyone.
 
For more information on building a plan that includes finances and more, consult our Age-Smart Planning e-guide.
 
© ElderWise Inc., 2013.
You have permission to reprint this or any other ElderWise INFO article, provided you reproduce it in its entirety, acknowledge our copyright, and include the following statement: Originally published by ElderWise Inc. We provide clear, concise and practical direction to Canadians with aging parents…and anyone wishing to do “age-smart” planning. For more information, visit http://elderwise.memwebs.com/.
 
 

 

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