This article is brought to you by Della Dwyer.
Watching your parents get older is a bittersweet experience. We treasure the memories we’ve built together, but at the same time, we might begin to notice changes in their lives that spark concern—especially when it comes to managing their money. Elderly individuals are more vulnerable to financial missteps. From forgetting to pay bills to falling victim to scams, these mistakes can have significant consequences on their well-being.
If you’re worried that your elderly parents may be struggling to keep up with their finances, you’re not alone. Many families face this challenge.
Here are some common signs that your elderly parents may need help with their finances (and tips on how to step in effectively and respectfully.)
1. Missed or unpaid bills
Are you noticing overdue notices piling up, or utility bills going unpaid? Missed payments is one of the earliest signs that your parents are struggling to keep track of their finances and may need help. This could happen because they feel overwhelmed, or maybe they’re just forgetting about deadlines altogether.
How to help with bills
Organize a bill calendar: Set up automatic payments for recurring bills or create a physical or digital calendar that lists due dates.
Use a bill management service: Several financial institutions and third-party companies offer services that automatically manage and pay bills.
2. Unusual spending habits
Sudden generosity, compulsive shopping, or unnecessary home repairs can drain their savings rapidly.
If your parents are suddenly making strange or excessive purchases, such as expensive items they don’t need or multiple donations to charities, this may be a sign of declining financial judgment.
How to help improve spending habit
Monitor bank and credit card activity: With their permission, review their transactions to spot any unusual or erratic spending patterns.
Have an open conversation: Gently ask about large purchases or changes in their spending habits to understand if there is an underlying reason.
3. Confusion with financial concepts
A decline in cognitive abilities can make it hard for seniors to understand basic financial concepts. They may mix up accounts, struggle with banking procedures, or forget how to access online banking platforms.
If your parents seem confused about their finances or frequently ask the same questions about money, they might be in over their heads.
How to help confused parents
Simplify financial tasks: Reduce the number of accounts they manage or consolidate their financial information into one place, making it easier for them to track.
Provide hands-on assistance: Offer to sit with them at regular intervals to help with online banking sessions or balancing their checkbook.
4. Frequent calls from debt collectors
If you notice that your parents are getting regular calls from debt collectors or third-party companies, it could mean that your parents are behind on payments or owe money they may not even realize they owe.
It’s important to address these situations quickly before they escalate into legal issues or further financial strain.
How to help with debt collectors
Contact creditors: Help your parents contact creditors to understand the situation, negotiate payment plans, or resolve any discrepancies.
Look for professional help: If their debt is overwhelming, consider seeking advice from a certified financial planner or credit counselor.
Explore debt consolidation: If they have multiple debts, look into debt consolidation options, such as mortgage refinancing, which can combine their debts into a single loan with potentially lower interest rates and easier management.
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5. Unopened or piled-up mail
If you notice piles of unopened mail in their home, particularly bills or bank statements, this is a strong indicator they may be overwhelmed or avoiding their finances. It can also signal declining memory or organization skills.
How to help stay on top of mail
Sort the mail together: Offer to help go through their mail, organizing it into categories such as bills, personal correspondence, and junk mail.
Reduce paper clutter: Encourage switching to electronic bills and statements to reduce the amount of paper they have to sort through.
6. Becoming victims of scams
Seniors are often prime targets for financial scams, including fraudulent phone calls, phishing emails, or door-to-door solicitations. If your parents mention unusual phone calls, inquiries about finances, unexpected winnings, or requests for donations, these are signs that they may be being scammed and need help.
How to help your parents avoid scams
Educate about common scams: Talk to them about the most frequent types of scams targeting seniors, such as phishing emails, IRS impersonations, and investment fraud.
Register for Do Not Call lists: Help them limit the number of telemarketers by registering their phone numbers on official "Do Not Call" lists.
Monitor accounts closely: Check for unusual activity in their financial accounts that could indicate they’ve been scammed.
7. Difficulty with simple math or calculations
If balancing a checkbook or calculating a tip in a restaurant becomes difficult, it could be a sign of cognitive decline, which may extend into their overall ability to manage finances. Miscalculating basic numbers may lead to larger financial problems if left unchecked.
How to help when math gets too hard
Use financial tools: Introduce them to simple apps or calculators that make handling numbers easier.
Encourage professional management: If their cognitive abilities are significantly affected, it may be time to consider involving a professional financial advisor or power of attorney.
8. Forgetting to file taxes
Filing taxes can be confusing at the best of times, and for seniors, it’s often overwhelming. If your parents forget to file their taxes or file them incorrectly, they could face penalties or miss out on tax refunds or benefits.
How to help with taxes
Hire a tax professional: Working with a tax professional can ensure that their taxes are filed on time and accurately.
Use free tax help for seniors: There are programs like AARP’s Tax-Aide that offer free tax help to seniors with low to moderate incomes.
9. Borrowing money from friends and family
While it's natural for family members to help one another occasionally, frequent borrowing or requests for secrecy may indicate a more serious issue. If your parents find themselves borrowing money from family members to cover expenses or make ends meet, it can be a significant sign that they are struggling financially. This might indicate that they are unable to manage their funds effectively or that they have exhausted their savings.
How to help when parents need to borrow money
Have a candid discussion: Talk to them about their financial situation and the reasons behind needing to borrow money. This can open up a dialogue about their finances and any potential solutions.
Create a budget together: Help them outline a budget that aligns with their income and expenses. This can provide clarity and assist in managing their finances better.
Encourage transparency: While confidentiality is important, you should be transparent with siblings and others who are close to your parents. That way you can be sure your parents aren’t spreading out the borrowing to hide a bigger problem.
How to approach the conversation
It’s hard to watch the people who raised you struggle. They’ve spent their lives taking care of you, and now, the tables may have turned. But that doesn't make the conversation any easier.
Here are some tips to approach the subject delicately …
Choose the right time and place: Avoid bringing it up during stressful or busy times. Find a private, relaxed setting where they feel comfortable.
Start with your concerns: Frame the conversation around your worry for their well-being. Rather than pointing out what they’re doing wrong, express that you want to help them avoid stress or mistakes.
Offer specific solutions: Come to the conversation with potential solutions—such as automating bill payments, consolidating accounts, or looking into refinancing options —so they don’t feel like you’re just criticizing without helping.
Involve siblings or other family members: If possible, have other family members participate in the conversation, as long as they share your concerns and can help in a constructive way.
Options for long-term financial help
If managing finances becomes too overwhelming for your parents, there are several ways to ensure their financial security:
Power of Attorney: Consider asking them to set up a financial power of attorney (POA) so that you or another trusted family member can make financial decisions on their behalf.
Hire a Financial Advisor: A professional advisor can oversee their finances, ensuring everything is handled properly and securely.
Daily Money Managers: A daily money manager can help manage bills, balance checkbooks, and handle other financial tasks on a regular basis.
Joint Bank Accounts: Set up a joint bank account to help monitor transactions and intervene if necessary.
How to help your elderly parents with their finances
Helping seniors with their finances is a delicate, yet necessary, task. By recognizing the signs that your parents need help and stepping in with care, you can protect their finances and give them peace of mind in their golden years.
Whether it’s setting up automatic bill payments, monitoring their accounts for unusual activity, or enlisting the help of a financial professional, the key is to approach the situation with empathy and a focus on preserving their independence while ensuring their security.
By acting early and offering gentle support, you can help your parents maintain their financial independence while safeguarding their future.
