Aging Parents and Conflict Resolution Warning Signs Your Parents' Finances Are Off Track
Statistics from The National Council on Aging show that 29 percent of homeowners over 62 have difficulty or need help with one or more ADLs or IADLs (instrumental activities of daily living) which includes money management, along with shopping, cooking, cleaning and using the telephone. Finances can also get off track because your aging parents don't have as much money as they used to. They may be too proud or independent to let you know.
Why aging parents need help can vary greatly and the need can be insidious or abrupt, but odds are that they will require help some day for some time. A 2007 study by the Center for Retirement Research at Boston College revealed that 40% of retirees between 67 and 80 suffer a decline in income and assets, the greatest being due to the loss of a spouse. Inflation, poor spending habits, inappropriate investments, and failure to plan how to use assets are other reasons for a decline.
Financial problems can easily spiral out of control if your parents don't tackle them quickly. And if your parents are tight-lipped about their finances or fearful of losing control over their money, they may be less likely to confide in you about any money difficulties they may be experiencing -- giving problems time to snowball.
Even if you're not privy to the details of your parents' finances, if you pay attention you'll see early indications that problems are brewing. If you notice a problem in one area, there might be problems in another. Physical illness and/or response to medications, loss of a spouse, and depression are among the most common precipitating factors. Here are some of the warning signs that your parents' finances are off track:
Mail Is Piling Up Unopened In Their House. The next time you're at your parents' house, look around the kitchen or mail area. Are there stacks of unsorted mail? What about piles of statements from mortgage or credit card companies, utilities, notices from the Internal Revenue Service, or other unopened envelopes that appear to be bills? As your parents age, the monthly chores of paying bills may become mentally or physically overwhelming, especially if money is tight because they're on a fixed income or if they're slowing down physically. Stacks of unopened mail -- especially bills -- can be an important warning sign that something is amiss.
Your Parents Seem To Be Mishandling Money Or Forgetful About Cash. When you're out to eat, does your parent open his/her wallet, only to be surprised that s/he doesn't have enough money to pay for something? Do you see undeposited checks or unopened mail from pension funds, insurance companies, or Social Security hiding in piles of paperwork or lost amid household clutter? These can be early signs that your parent isn't paying close attention to his/her money situation. S/he may be physically unable to make the daily or weekly trips to the ATM or bank to deposit checks and take out cash, or s/he may be getting increasingly forgetful about his/her day-to-day financial dealings.
Creditors Are Showing Up In The Phone Logs. Your parents' phone offers a quick and easy way to check to see whether creditors are contacting -- or harassing -- them. Check the caller ID logs and keep track of any increase in phone calls from new numbers that may be bill collectors. You may also notice repeated phone calls from credit card companies or household help, such as gardeners or housecleaners looking for back wages.
The House Is Filling With New Purchases, Or They've Acquired Expensive New Hobbies. Take a look around your parents' house. Does it look like they've been doing heavy-duty damage to their credit cards? Do you see lots of new and expensive purchases around the house, like furniture, art, knickknacks, or fancy appliances such as flat-screen TVs?
Or maybe they've been traveling more than usual or taken up some other costly new habit like weekly golf outings to the most expensive course in town. No one begrudges their parents the right to an occasional splurge -- especially if they're retired and finally relaxing after years of hard work. But a sudden uptick in purchases or expenses can be a sign that your parents are overextending themselves and developing a compulsive spending habit.
They're Gambling More Often Or For Higher Stakes Than Usual. Many people -- especially senior citizens -- enjoy organized trips to local casinos or weekly bingo or bridge games at the senior center. Gambling cruises and bus trips are a popular weekend excursion for many groups, and there's no reason to panic over the first train ride to Reno, bus to the Jersey shore, or gambling cruise to the Bahamas. But if these activities increase significantly over time, you have to face the possibility that your parents may have a gambling problem -- and if that's the case, gambling-related expenses could easily blow up in their faces at any time.
You See Or Hear Evidence That They're Falling Victim To Financial Scams. Look through that mail pile and the caller ID log. Do you see many junk-mail catalogs from unfamiliar companies, sweepstakes mailings, solicitations for investment schemes, or vacation home offers? What about frequent or repeated phone calls from unfamiliar numbers? Or has one of your parents excitedly told you about a surefire, can't-miss investment scheme he heard about from a neighbor? Put your elderly parents on the no-call lists for telemarketers National Do Not Call Registry.
According to the Federal Trade Commission, 80 percent of the victims of telemarketing scams are over age 65. Older people can be especially vulnerable to scam artists and shady telemarketers -- or even well-meaning friends who have already fallen prey to this kind of scheme -- not only because they often have significant assets but also because they may be lonely or may welcome the attention.
They're Complaining About Not Having Enough Money. Does the subject of money come up in conversation more than it used to? Do your parents make more passing references to the high costs of living expenses like gas, electricity, and groceries? You may also see more subtle signs that money is tight -- they may decline invitations to go out to eat with friends because of the cost, make fewer car trips because of high gas prices, and skip home fixes like house painting and furnace or appliance repairs. All of these can be signs that your parents' expenses are too much for them to deal with on their own. You might also want to check through some of the credit card bills to see what the debt is going to. Are there significant mail order purchases, medication charges or charitable donations?
They Seem Physically Unable To Complete Daily Tasks Like Banking And Bill Paying. Tasks that once seemed mundane can become unmanageable if your parents' physical or mental state is deteriorating. The weekly trip to the ATM may be no big deal to you, but if your parents have vision problems that prevent them from driving or health issues that keep them from long walks, it may be hard for them to make it to the bank on a regular basis. Likewise, paying bills by mail can become burdensome if arthritis makes writing checks and addressing envelopes painful. Pay attention to their general health, and you'll likely be able to keep tabs on their financial health as well.
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The National Council on Aging suggests that planning for this situation should begin in your parent's early 60s with a family council meeting. But for many, that time has passed without that meeting and it is up to family caregivers to provide the best safety net we can.
If You Decide to Tackle It Here Are:
10 Things You Should Know About Your Parents' Finances
Do They Have A Durable Power Of Attorney, And Where Is It?
Where Do They Keep Their Financial Records?
What Are Their Monthly Expenses?
How Can I Pay Their Bills If Necessary?
What Kind Of Medical Insurance Do Your Parents Have In Addition To Medicare?
What's Their Income And Where Does It Come From?
Have Your Parents Done Any Estate Planning?
If They Can No Longer Live On Their Own, What Can They Afford In Terms Of Housing?