How to start difficult financial conversations with your aging parents
In our Eye on Money series this week, we are looking into some of the costly mistakes people make with their finances.
Many families do not plan ahead for the care of aging parents, and the financial burden often falls on adult children. Nearly three in 10 Americans with a parent 65 or older say they have helped their parents financially in the past year, according to a 2014 Pew Research survey.
In her book, "The Dumb Things Smart People Do with Their Money," CBS News business analyst and certified financial planner Jill Schlesinger explains how you should start those difficult financial conversations and what you should be asking your parents.
Schlesinger advises that before you start providing assistance for your parents, you need to have a handle on your own financial life. You should have paid down any consumer debt, established an emergency fund, and maximized retirement.
When starting a conversation with your parents, Schlesinger says be careful about your tone. Take baby steps in conversation and bring up something timely, like "I saw this on 'CBS This Morning'" or "My friend's mother just moved in with her." It could also be as simple as, "It's tax season, have you filed? Did everything go OK?"
Discussing money issues with family
- Don't be judgmental
- Start the conversation slowly
- Consider bringing a 3rd party to facilitate: an accountant, investment adviser, a lawyer, or trusted friend
Work together
- Discuss finances openly
- Weigh implications for both generations
- Create and implement the plan
Financial questions to ask your parents
- Can you pay your bills?
- Do you have emergency savings?
- Do you plan to stay in home or move?
Other Costly Mistakes:
- Failing to have a will is one of the worst financial mistakes you can make
- What to consider before taking on student loan debt