How to help your ageing parents with money management

Estimated reading time
 5 min

Learn how to

• Identify the signs that your parents might need financial support
• Support your parents with their money management
• Know the difference between the two powers of attorney

Many things change as we get older. We get more confident (and more grey hair). We make more memories and welcome new generations into the family.

But for some older folks, ageing isn’t all silver fox and lounging on a cruise. Making decisions and managing every day tasks can get harder, especially when it comes to money.

There are many different ways that people can help their elderly parents with finances. It’s a big responsibility to take on, but it’s one that can help them feel assured, comfortable and confident that you have their back.

We’re here to guide you through the process – giving you some of the information you need to decide if you (and your parents) are ready for this responsibility.
 

How can you tell if your parents need help managing their money?

Older family members can be pretty vocal – about wanting more grandchildren, about how music has ‘changed’ or what milk cost back in their day. But the one thing some older folks won’t admit is having trouble with their finances. If they talk a lot about money when they’re around you, then it might be a sign they need a helping hand.

There are other signs or behaviours that might clue you in on their money situation:

• They start making unusual purchases that don’t reflect what they need or their way of life.
• They fall behind on regular bills or have stacks of unopened envelopes with bills inside.
• Their bodies have changed and simple financial tasks are harder. For example, fading vision might lead to misreading a bill or a payment date.
• They experience changes in their memory and cognitive functions. For example, they might forget which bank account to pay with and need a reminder.
   

How can you support your elderly parents with money management?

For many people, it can be hard to see our parents as anything other than that: the folks, the grown-ups, the adults in the room. So watching them struggle with money management can be hard. But there are some things you can do to help them.

Start the conversation

Talking about money management early on can help you and your folks align on how they want their money (and assets) managed, before the time comes to actually get involved. Listen to what the older people in your life want and respect what they have to say – it’s their money after all. It’s also important you have your parents’ consent for managing their money and assets, which can be verbal, written or even through a power of attorney if need be.

Conversation starters: How do you feel about your financial situation? What financial tasks do you need support with?

Organise their financial documents

You can help organise your parents’ financial records, like bills and bank statements. It’s a good way to help them get on top of things, and understand their financial position, including where they might need more support. Chat to your parents about how they want to organise these documents. Do they want to make physical copies as a back up? Or are they tech savvy and want to switch to email-only bills? Whatever they decide to do, remind them to keep those documents safe and protected.

Conversation starters: Do you like physical or digital copies of financial documents? How would you like to keep your documents safe? How do you like to organise your financial documents?

Check their accounts

Brew a nice cuppa and sit down with your parents to look at their bank accounts together. When you do this, see if you can help them make any changes that’ll benefit them. Can you consolidate their savings and retirement accounts into a term deposit? How much income are they earning from the pension? Do they need support to make a budget? You can also organise a chat with you, your parents and their bank to find a solution that’s best for your folks.

Conversation starters: How many bank accounts do you have? How do you feel about having more than one bank account to manage? How do you manage your daily expenses?

Optimise bill payments

Staying on top of bills can fall to the wayside for anyone, including older people. So it’s a good idea to think about how you can help your folks streamline their regular bill payments. Talk to them about how they want to go about paying bills in the future. Do they want the payment automatically paid from their account each month? Do they want monthly reminders on their calendar or phone? Or do they want you to receive a copy of the bill so you can help keep track of things? As an ultimate last resort, you can bring up the idea of some, or all, bills going to you for record keeping.

Conversation starters: How do you pay your bills? Do you stay on top of paying your bills or miss some payments?

Don’t mix their finances with yours

While this might seem like it makes things easier, mixing their finances with yours is like mixing oil and water – it’s best to avoid it. Not only will it hinder your parents’ finances, but it can also affect your long- or short-term goals. Merging money can also impact your parent’s pension and how much they receive. It’s important that your parents still feel financially independent, even if you’re helping them along the way.

Conversation starters: Do you find paying for everyday essentials hard? How do you want to manage your money?
 

Do your parents need a power of attorney?

If you take up the responsibility of managing your parents’ money, there might be some legal documents to sign and processes to go through to help protect everyone’s autonomy and agency. Becoming your parents’ power of attorney gives you the legal authority to make financial decisions on their behalf.

There are two different powers of attorney your parents can have:

• A general power of attorney gives you authority to make legal and financial decisions for your parents for a period of time. This power of attorney will automatically end if your parents lose their decision-making capacity. For example, if your parents are away from home and need someone to manage their money, they might make you a general power of attorney to do this when they’re away.
• An enduring power of attorney enables you to make financial and legal decisions on behalf of your parents. This decision-making power endures (hence the name) if your parents lose their capacity to make their own decisions. It will start once you accept the role as your parents’ power of attorney or at a later time your parents specify.