How to Help a Parent with Finances
Many adult children serve as financial helpers to their elderly or ill parents. They help with paying bills, handling deposits and investments, filing insurance claims, preparing taxes and more. Here are some tips and resources that can help you help your dad.
Start with a Conversation
Taking on the task of helping a parent with finances can be a sensitive and difficult topic. The first step in helping your dad is to have a respectful talk with him expressing your concerns and offering to help with his financial chores. If you have siblings, it can be a good idea to get them involved too. This can help you head off any possible hard feelings. Plus, with others involved, your dad will know everyone is concerned.
If your dad is willing to let you help manage, monitor or take over his financial affairs, your first order of business is to get organized by making a list of his financial accounts and other important information. Your list should include his:
- Contact list: Names and numbers of key contacts like his insurance agents, financial advisor, tax preparer, family attorney, etc.
- Monthly bills: Phone, cable, water, trash, gas, electric, credit card accounts, etc.
- Financial accounts: Including bank accounts, brokerage and mutual fund accounts, safe-deposit boxes and any other financial assets. Make sure to get usernames and passwords for online financial accounts.
- Company benefits: Any retirement plans, pensions or health benefits from his current or former employers.
- Insurance policies: Life, home, auto, long-term care, Medicare, etc.
- Taxes: Copies of your dad's income tax returns over the past few years.
Locate Important Documents
This is also the ideal time to find out if your dad has the following essential legal documents: a will; an advance directive which may include a living will and health-care proxy and will allow you or another family member or friend to make medical decisions on his behalf if he becomes incapacitated; and a durable power of attorney, which gives you or a designated person similar legal authority for financial decisions, if needed.
If he does not have these important documents prepared, now is the time to prepare them. If they are prepared, make sure they are up-to-date and you know where they are located.
Simplify Financial Tasks
The quickest way to help your dad simplify his monthly financial chores is to set up automatic payments for his utilities and other routine bills and arrange for direct deposit of his income sources.
If your dad has savings and investments scattered in many different accounts, you should consider consolidating them. You can also set up your dad's bank system and investment accounts online, so you can pay bills and monitor his accounts anytime.
Set Up Protections
To guard against scams and risky financial behaviors, consider getting your dad a prepaid credit card. With a prepaid credit card your dad would have access to money, but with restrictions on the amount he can spend. Some prepaid cards allow you to block certain types of unwanted transactions, such as wire transfers or online purchases. Additionally, some web-based services allow you to automatically monitor your dad's accounts, track suspicious activity and alert you when a problem is detected.
If you need help or live far away, consider hiring a daily money manager who can come in once or twice a month to pay bills, make deposits, decipher health insurance statements and balance his checkbook. Fees range between $60 and $150 per hour.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.