What to do if a parent is struggling with their finances

It's a sensitive subject, but it's important you step in to help your mother or father if it's clear they need help managing their money.

How to spot they need help

It can be difficult to spot when a parent has started struggling because we tend to assume they’ll always be the same person who brought us up – and helped us to get to grips with money in the first place.

It means it’s important to keep your eye out for red flags that show they may not be coping as well as they once were.

Some of the most common are:

• They say they can’t afford to do something they usually can;
• They’re unsure where the money has gone;
• They receive warnings about unpaid bills;
• They are racking up credit card debt;
• They no longer open the mail;
• They can’t find important documents;
• They lose track of spending.

If you are concerned that a parent is struggling, it’s worth taking some key steps to protect them.

Start the conversation

This can be a delicate subject.

Helping a parent with their finances will in some ways involve reversing the roles you have both become used to over your lifetime, so you will need to bring it up tactfully and gently, rather than simply trying to take over.

You can offer to help organise their paperwork or automate some payments, to make life easier.

This should open the door, and you can gradually start more conversations with them about helping them manage their money.

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Offer to help organise essential financial documents

Eventually, you are going to want to know where things like birth certificates, insurance policies and wills are.

If they don’t have all these things in one place, offer to go through their paperwork and file it for them – to save them any trouble. 

You can also use it as an opportunity to make sure everything is up to date – that wills have been updated and insurance renewed – and that you have a note of when they must be renewed again.

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Streamline their finances

You can offer to help make things less complicated. So, for example, you can cancel any credit cards and accounts they don’t use.

If they have a number of investments, consider using an investment platform, so you can see easily see everything in one place.

You can also automate as many payments as possible, so direct debits leave their account without them having to remember to pay a bill.

Make a list of their financial activities

You can draw up a list of their income and outgoings: when they are expecting money in their account from things like pensions, and when they are expecting bills to go out.

It will help to have this in writing if they grow concerned that they don’t know what’s going on.

Talk to them about scams

Older people can be particularly vulnerable to scammers if they are struggling to stay on top of their finances.

If they are already worried about something like online fraud or payments going missing, it’s easier for a scammer to lure them in by convincing them they have been a victim.

Talk to them about common scams, and encourage them to talk to you if anyone contacts them out of the blue.

Raise the issue of a lasting power of attorney

There are two types of lasting power of attorney: one would enable you to make decisions about their health if they were no longer able to do so, while the other allows you to deal with their finances when they either no longer want to, or no longer can.

Drawing one of these up can make the process of handing over day-to-day responsibility far easier, which can make an enormous difference to the whole family,

Both have to be set up while you have full mental capacity and don’t have to be enacted immediately, so it’s worth explaining this when you first raise the issue – so they don’t assume you think they’ll lose control.

One option is to set yours up at the same time.

Learn more about setting up power of attorney here.

Consider professional help

If you are struggling to get on top of a parent’s finances, it may be worth getting professional help.

You may, for example, want to hand their investments over to a wealth manager.

In the trickiest emotional situations, this may be something you are perfectly able to do, but the issue is just too sensitive for your parent to accept: they may find it easier to hand their financial matters to a professional instead.

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