7 Tips to Help Senior Loved Ones With Financial Management
Last Updated: March 11, 2019
Whether your elderly loved one spent their entire life taking care of finances themselves or largely relied on a spouse to do so, aging increases certain risks with financial management that they’re not prepared for.
Read our top seven tips on how to help senior loved ones with financial management during this time.
Top 7 Tips to Help Seniors With Financial Management
These are problems with serious consequences, so it’s important for families to get involved and help make sure your loved ones stay in a good place financially as they age.
Here are a few proactive steps you can take to make that happen:
1. Check in regularly.
Hopefully, you already check in on your senior loved one frequently to find out how they are, and when you do, you should also discuss any financial situations you should be aware of. You want to find out sooner rather than later if they’ve blown their budget on an expensive purchase, so you can start doing damage control fast.
These things are less likely to happen if you’re having regular conversations about money with your loved one and checking on the status of their financial accounts periodically.
2. Create a budget together.
If you’re worried your senior loved one’s spending habits could outpace the money they’ll need in the coming years, then work with them to create a monthly budget to stick with. For many people, setting clear goals around how much to spend each month on different things can make a big difference in keeping their spending under control.
If your loved one is amenable to using technology to help, consider employing a tool like Mint, which makes creating and tracking a budget easy and is also helpful for things like bill payment alerts and keeping an eye on your credit score to catch identity theft early.
3. Look for areas to cut expenses.
One of the difficult parts of budgeting is figuring out the areas where you can cut spending. That could mean making a decision like downsizing to a smaller space that costs less and needs less maintenance or giving up indulgences like a clothes shopping habit or regular meals at a nice restaurant.
Help your loved one identify which expenses are non-necessities and which of those they can live without while still maintaining their quality of life. These choices won’t be easy, but if your loved one is living beyond their means, they’re necessary. If they need to move to assisted living or face expensive health care bills later on, you’ll both be glad you took steps to start saving more now.
4. Look for areas to increase income.
If the last step was challenging, this one could potentially make things a little easier. Look for ways to increase that budget by making more money. Your loved one may be able to more easily afford to stay in their home by getting roommates or taking out a reverse mortgage, for instance. They could try selling things online, or they could even go back to work (possibly on contract or working part-time, if the idea of going back full time is too much).
Just because a senior has retired doesn’t mean they can’t keep making money. Consider ways they can bump that monthly budget up while keeping their savings intact.
5. Secure a financial power of attorney.
Your loved one may not want to face the idea, but there’s a decent chance that at some point they won’t be able to independently manage their finances. It will protect them and their assets if when that day comes they’ve taken the advance step of providing financial power of attorney to someone they trust.
Have that conversation now, while they’re lucid and able to take the steps to make it happen, and don’t procrastinate getting it done.
6. Sit down together to create a list of all regular bills.
Ideally, you want to take this step before your loved one reaches the point where they have a hard time managing their bills. Have them go over all the monthly bills they receive and where payments are sent. You want to collect this information into one (secure) place for them so it’s easier to keep up with, and so that you have it if or when you need to start taking over the task for them down the line.
You can set up automatic bill payments and use tools that provide bill reminders to make remembering to pay a little easier on your loved one. If you have the main account information for their different bills, you can keep an eye out for any missed payments so you know when to step in.
7. Start by going over common scams and best practices for financial security.
Unfortunately, there are a lot of different scams focused on seniors and many of them can seem pretty persuasive to someone who doesn’t know to be on the lookout for them. The first thing you should do to help your loved one with their financial management is to educate them on how to recognize common senior scams so they know what to look out for. Explain the basics of online security and how to avoid identity theft by recognizing phishing emails and not throwing out papers with sensitive information on them. Your loved one won’t have much money left to manage if a scammer is able to get to it, which is why it is important to start with prevention.
We spend most of our lives avoiding talking about finances, which society deems as rude or unsightly to bring up. That can make it hard to discuss money with your senior loved one, but it’s important to do so nonetheless.
For them to stay financially safe and live as comfortably as possible in their remaining years, they’ll probably need some help managing finances. Take the time to help them now and you’ll all be better off in the future.