A friend of mine recently realized his mother needed help
managing her finances when he found her closets filled with oddball
purchases like jalapeno jelly beans and Betty Boop bobblehead dolls. "It
was pretty clear that telemarketers were taking advantage of her
friendly nature to sell her junk she didn't want or need," he said.
Fortunately,
his mom welcomed assistance, but not all families are so lucky. Some
parents are fiercely independent and fear relinquishing control over any
aspect of their lives; others may be in over their heads and too
embarrassed to ask for help.
Postponing uncomfortable financial
conversations with your parents may do them and you a serious
disservice. Chances are, if you're helping your parents financially your
own retirement savings probably are suffering.
It's never too
soon to become familiar with your parents' financial, medical and legal
records so you can step in if needed. If possible, start those
conversations while they're still in good health so you'll be able to
spot any warning signals that something may be amiss.
Signs to watch for might include:
-Unpaid bills, late payment notices or utility shut-off warnings.
-Calls from creditors or collection agencies.
-Indications they've had to choose between filling prescriptions and buying food, heating or other necessities.
-Overabundant junk mail, magazine subscriptions or cheap prizes signs
they may be targets of telemarketing or get-rich-quick schemes.
-Seemingly unnecessary home improvements; or conversely, signs that they can't afford needed repairs.
-Uncharacteristically lavish spending on vacations, new cars, etc.
-Long
before your folks require assistance, offer to help organize their
finances. Set up and periodically update files containing:
-Details of all major possessions and relevant paperwork (such as property deeds, car registration, jewelry, etc.)
-Outstanding and recurring debts (mortgage, car loan, medical bills, utilities, etc.)
-All income sources, including Social Security, retirement and investment accounts and savings.
-Bank accounts, credit cards, safe deposit box contents and insurance
policies, including password, agent and beneficiary information.
-Will, trust, power of attorney, health care proxy and other documents showing how they want their affairs handled.
-Contact information for lawyer, accountant, broker, financial planner, insurance agent and other advisers.
A few other tips:
Help your folks set up and follow a detailed budget so they always know
how much money is coming in and going out. Numerous free budgeting
tools are available at such sites as www.mymoney.gov, the National
Foundation for Credit Counseling (www.nfcc.org), www.mint.com, and Practical Money Skills for Life, Visa Inc.'s free personal financial management site (www.practicalmoneyskills.com/budgeting).
Set up automatic bill payment for monthly bills to avoid late payment
fees. Just make sure the account is always sufficiently funded.
Schedule a session with a financial planner to help everyone understand
retirement's impact on taxes, income and expenses. If you don't have
one, the Financial Planning Association (www.fpaforfinancialplanning.org) is a good resource.
Take care of these financial planning details now, so that when your
parents need your help, you'll be able to give them your full attention.
And while you're at it, make sure your own files are in good order so
your kids won't face the same hurdles when you get older.
Jason Alderman directs Visa's financial education programs. 
