You may be caring for aging parents now or in the future. Protecting their financial assets is an important part of that care. What you might not know, though, is that the financial status of your mom and dad could have a big impact on your own family budget. You’ll need to take the following steps as soon as possible to protect their and your future.
Just to clarify, you are not legally responsible for your parent’s debt, unless there is no debt that you acquired jointly or no joint assets that have claims against them. Still, it often falls to adult children to pay for expenses and care of their aging adults when those parents have no money to spare.
Protecting your parents money can be a daunting task. after all, money can be a touchy subject for anyone, which gets more complicated when the conversations are initiated by adult children concerning the finances of their aging parents. It is an impact-full role reversal that takes some getting used to.
Despite the awkwardness, ignoring your parent’s finances is a mistake. Wait too long, and you could be digging them out of a deep hole. What kind of income are your parents living on? Are they able to keep up with their expenses? Do they have a nest egg, and if so, how much is saved? You’ll need to get these questions answered and help them to establish a working budget.
Sometimes just talking about your own budget may help break the ice and get your parents ready to talk. So can bringing up the fact that there may be financial benefits that they qualify for but are not getting. There is assistance available for everything from healthcare and heating to cell phones.
You’ll need to make up a simple budget that can be easily followed. Start by listing out all of the income (including any assistance) and all of the bills. If you find that there just isn’t enough income to cover everything, you will have to help them cut back. Depending on your relationship, this may have to take the form of scheduling a meeting for them with a financial planner and asking to be in on that meeting. Most qualified financial planners and consultants will charge approximately $150 for a session. Some volunteer groups provide this service on a sliding scale or for free to those older than 65.
Health care costs are one of the biggest expenses that seniors face, and Medicare usually only covers about half of it. Again, there may be resources out there that can help with medical expenses. Anything that can reduce these costs for your parents is worth the time and effort it takes to do the research and apply for the assistance.
Credit card debt may be another issue, if your parents are using their credit cards as a fallback to pay for escalating expenses. You may be able to call their lenders and negotiate lower interest rates.