Your parents likely taught you about money, helped you open your first bank account, and gave you money for school and allowance. Sadly, overtime, these roles frequently reverse themselves. Many people in their 50’s find themselves in the position to ask help from their children or loved ones to manage their finances. This can be awkward and difficult in some circumstances, but there are things to be done to make the transition easier.

The effect of Aging on Managing Finances:

As with many other aspects of life, age may eventually impact an individual’s capacity to manage their finances and make wise decisions. A change in cognitive ability or even relatively minor health issues can have challenging consequences for handling their money. It’s common for spouses to divide tasks over time. Perhaps one pays the bills while the other handles of finances. This can be fine while both are still living, but ultimately, the surviving spouse will be left with additional responsibilities that they are not accustomed to. Errors can be made, especially in times of grief.

Where to begin:

1. Insurance. While there are many issues to address, health insurance and long-term care coverage is critical. The likelihood of needing it at some point is quite high in older folks. Ensure that necessary insurance coverage is in place.
2. Savings. Make a real assessment of where your parents stand financially. How much is there? How likely is it to last throughout the remainder of their lives? Is the money invested in adequate places?
3. Budget. It would be wise to take a look at their spending habits versus their income and savings. Are they spending the money they have wisely? Communicate with them about any adjustments you think they should make.

Get yourself more involved. It’s usually wise for at least one of the children to be added to all of the parent’s accounts. There are ways to do this that don’t permit the person added to the account to use or spend the funds, if that would make your parents more comfortable. But they still receive all the statements and are notified in the case of missing or late payments or any other issues.