Essential Conversations with Dr. Amy: Talking to your parents about their finances

As an adult child, having conversations with a parent about their finances can trigger difficult emotions. You may approach them because you are fearful about whether your parent has enough money, both for today and the future, or you may have concerns about their current or future ability to manage their finances. However—depending on your approach—your parent may subsequently feel you are interfering or implying they are not competent to manage their own affairs.

Given all of the emotions around money, as an adult child, how can you approach the financial talk with your parent to ensure the greatest likelihood of an effective and harmonious conversation?

Respectfully raise the topic

It’s best to think about the initial conversation from your parent’s perspective. Start by reassuring them that you are not trying to be nosy or interfere in their life. Instead, your goal is to support their independence and quality of life.  However, in order for you to be helpful if a need arises, there is some basic financial information that would be important for you to know. If you don’t know whether your parent has a Power of Attorney (POA), this is a good transition into a financial conversation. Every adult needs to appoint a POA to manage their finances if there is ever an issue of incapacity, either cognitive or physical.

You could start by saying, “Mom, I’m not sure who you want to look after your finances if the need ever arises?” If you know you are the POA, this allows you to say that you want to make sure that you understand your parent’s finances and how they would want you to manage them, should there ever be a need to do so. Some people will brush this aside and say something to the effect that they will talk to you in the future, that they are “just fine” right now; but this is an opportunity to remind them (and yourself!) that the time to have these conversations is when things are “just fine.” Often it is too late if we wait.

Make the conversation mutual

Consider making the discussion a mutual conversation. This means that you also share information about your POA, or talk about how you are about to appoint someone. Now, instead of your parent being in the “hot seat” about their finances, the conversation becomes about the recognition that all adults need to put plans in place, whatever their age.

Offer to help where needed

What if you are concerned that bills aren’t being paid or there are financial issues your parent isn’t sharing? You can ask your parent if you might be able to provide some help with day-to-day money management. It’s important to reassure them that they will remain in control of their money and you will have regularly-scheduled conversations to keep them up to date. If your parent is doing online banking, with their permission they can share online sign-in information so you can monitor accounts and bill payment. If they are not doing online banking, perhaps they will be open to you taking this over and keeping them up to date. Again, you can reassure them that your goal is to support their independence, not compromise it.

It’s very important to talk with your parent if you aren’t sure they have enough money to maintain their lifestyle, or afford additional support they may need in future. This can be a difficult and embarrassing situation that requires an even more gentle and respectful approach. If solutions are not evident, with your parent’s permission you may want to involve a financial professional to help you both sort out the situation.

When is it a good time to discuss finances with an aging parent? The sooner we have these conversations, the more likely we are to avoid a crisis or major upset. It will help take the pressure off if we think of these as a series of conversations, rather than a one-time discussion. Once the door is open, it usually becomes easier to talk about finances in the future. For most people, the results are well worth the initial discomfort. We just need to keep in mind that it is always a dance between preserving our parent’s dignity while we protect their money for their benefit.

Dr AmyAbout Dr. Amy D’Aprix

Dr. Amy is a certified senior advisor, Vice President of the International Federation on Aging, and Co-Founder of the Essential Conversations Project. As a gerontological social worker, she has over thirty years of experience working with older adults and their families.