A Baby Boomer's Guide to Parenting Your Parents – Money Matters

One of the hardest things for a parent is to ask their children for money. They've always been the ones to solve their children's financial issues, such as providing a loan or buying their kid his first car. But now, Dad and Mom are on a fixed income, and they may or may not have a retirement plan. When (not if) your parents need help with their finances, it can be a fine line to walk to "help" manage, rather than "take over" their money issues.

At the beginning, it may be all they can handle to make you a signator on their checking account. Take baby steps and offer assistance rather than making an ultimatum. If it is Dad's idea, he will be likely to let it happen. In our case, Mom wrote most of the checks and Dad often had no idea whether they had money or not - and she wouldn't tell him. As Mom's Parkinsonism progressed, it became more and more difficult for her to write, not to mention the stress of having too much month left at the end of the money.

Making the Decision as a Family

It's crucial to be in agreement with your siblings before undertaking the monumental task of convincing your parents that they need some help with their finances. If one sibling is against it, it can mess up the whole process.

We all got together on a conference call (there are seven of us) and discussed our parents' needs and how best to address them. One sister had had most of the responsibility and needed help. We then approached Mom and Dad with the intent of relieving them of the stress of making ends meet every month - and it has been a process to arrive at the point where the income covers the expenses without excessive contribution from any one person. Whether their retirement plan covers monthly outflow or not depends a lot on how their financial life is structured, but the goal is to have a little money left at the end of the month.

Get All the Facts About Parents' Finances

It's a good place to start, but it still may be tough to get full disclosure of all the places they have money. Are there savings accounts? More than one checking account? Money Market, stocks and bonds, 401k or other retirement accounts? What about insurance policies? And how do recent events in the economic picture affect their hard-earned dollars?

Stock Market Crashes

If they do have a retirement plan it was probably invested in the stock market and may have lost a significant part of its value over the last couple of years. This can be terrifying. After all, this money was supposed to last them through their twilight years. And suddenly, it's half-gone. If they have nothing but Social Security, that's another whole issue, depending on whether both were covered or only one. In our parents' generation, the norm was for Mom to stay home and take care of the kids. She may never have had a job outside the home, which means she also has little or no Social Security of her own.

Where Does All Their Money Go

I have a hard time keeping track of where all my money goes. Your parents may have trouble identifying their monthly obligations as well. For someone on a fixed income, that can be particularly problematic. Start with mortgage, utilities, insurance (both health and life), gas, groceries, car payments... add them all up. Don't forget newspaper subscriptions, medications – which can be substantial depending on their health - satellite TV, internet (if they are online), credit card payments, etc. You will need to make allowances for the things that are important to them, even if it's not on your regular list - for instance, charity giving, like a monthly tithe to their church. Taking care of what they deem important will build their confidence in your management skill and make the transition easier.

Monthly Bills Work Better Than Open-Ended Expenses

Because Social Security is a monthly payment, try to get as many items payable monthly as possible. For instance, our local pharmacy doesn't usually carry accounts, but they made an exception for us (it is a little town, and we are good, regular customers). The grocery store was another matter. We solved that problem by creating another account, we call it the "Fun Money" account, for them to buy groceries.

When I took over the checking account where their Social Security was deposited, I would make monthly deposits into Fun Money for them to go out to dinner, buy groceries (including "Depends," which aren't cheap), catch a movie, and have "a little jingle in his jeans," which was really important for Dad to feel in control. In exchange, we agreed that only I would write checks and make withdrawals from the "Bills" account - the one the Social Security went into. Dad keeps track of Fun Money and I write all the checks and reconcile the bills account each month.

Reducing Expenses and Getting Help From Other Sources This can be a tricky issue. We originally agreed to all contribute every month, but as financial crises hit various families, that doesn't happen anymore. Fortunately, I was able to reduce many expenses, such as getting Mom off of two medications she didn't need. (Watch for over-prescribing, making sure you know what each medicine is for and whether your parent still needs it - or if there is a generic equivalent.) They also applied for, and received, a reverse mortgage for their house, eliminating the house payment. Understand that some siblings may be able to help, and others not. Try to not make it a guilt issue and cause hard feelings. Money issues can separate families quickly. It is not worth it.

Making It All Work

Above all, try to be part of the solution, not the problem. Use tact and gentleness and remember how much they have given you over the years. Keep detailed records so they can see where everything went. It validates your efforts and gives peace of mind to both your parents and your siblings.