It’s easy to talk to your parents about most things, except for finances. This is one of those conversations that can get awkward and even a bit emotional at times. Are you struggling to figure out how to talk money with your older parents?
Knowing how to talk about retirement, money, and other financial topics with your parents doesn’t always come easy. The good news is that it’s not impossible. Practice financial tips for a growing family.
Here are some tips and tricks so that you know exactly how to talk money with your older parents.
Choose the Right Time
Timing is everything when it comes to talking about finances. Choosing the wrong time or occasion could cause everything to backfire.
This conversation requires everyone to be relaxed. There should be minimal distractions. Everyone involved, such as siblings, need to commit to having a calm conversation that doesn’t get heated or emotional in any way.
Don’t rush the conversation, and ideally have it with your parents before they have serious health issues.
Set the Tone
Go into the conversation knowing that this is a sensitive topic. Your parents may become defensive and protective. To help, set the right tone and properly frame the conversation.
Consider talking about your own financial future and recent decisions that you’ve made. Or begin by discussing a friend and their parents’ finances. The idea is to not be overly direct or pushy.
Most importantly, remind your parents that you’re having this talk because you care and love them.
Understand the Full Financial Picture
Knowing only bits and pieces of your parents’ finances won’t do you much good. Having a full picture is a must. This will help you see ahead of your financial goals. You need to know:
- Where money is being kept (i.e. bank accounts, retirement accounts, etc.)
- How much each account has
- Who has access to them
Create a spreadsheet of account numbers as well as contact information. You also want to write down other assets, including car insurance records, list deeds, and co-op agreements.
For good insight into your parents’ finances, review their tax returns. Here you can see any additional income sources and other details that can be helpful.
Discuss Wills & Power of Attorney
All adults, whether 35 or 85, should have a will. This is especially important for adults with dependents. A will lists who gets what and how things should be distributed after death.
If you need access to any of your parents’ assets while they are still living, you will need authorization. Make sure that you, or one of your siblings, has the legal designation of durable power of attorney. This enables that person to make vital decisions regarding your parents’ finances.
Whoever has this role should be trustworthy and must always act in your parents’ best interest. Siblings should be made aware of the arrangement and any financial decisions that are made.
Ensure that all transactions are documented, along with other financial records.
Elect a Health Care Proxy
It’s also important that your parents choose someone to be a health care proxy. This person will make health care decisions if your mom or dad are no longer able to.
While this isn’t an easy conversation or decision to make, ironing out all these details now, when your parents are able-minded, is the best option. Figuring out who has what power when your parents are no longer capable can become a messy legal battle.
Having “the talk” with your parents isn’t easy. They may become defensive, upset, or stressed. Be mindful of how sensitive the topic is. Approach it with empathy, kindness, and most importantly, love.