Finances can be a challenging and emotional topic, one that people are often highly sensitive about. Yet, talking about finances with your aging parents is often critical.
In many cases, parents may be spending beyond their means, risking their savings or even putting themselves in debt.
So, how do you effectively talk to your parents about finances? Well, there are four key areas to consider.
Ways to Talk About Finances
- Be Compassionate and Open-Minded
- Talk About Consequences
- Consider Fraud and Manipulative Marketing
- Know Your Limitations
1. Be Compassionate and Open-Minded
Perhaps the most important way to talk to your parents about money is to be compassionate.
It’s tempting to take a hard stance and focus on the way that spending is frivolous. But, that’s often going to be ineffective. After all, if somebody told you to stop spending money on things you enjoyed, you would probably be resistant – even if you knew that they were right.
Instead, taking a more compassionate approach gives you more potential to make headway.
One aspect of doing so is to focus on why your family member is spending to begin with. For example, some people make financial decisions based on emotions. So, they might buy themselves something nice when they are feeling depressed or lonely. Many of us actually do that without even thinking about it.
If this is the case, you may be able to help them find other solutions.
For that matter, simply helping the senior to be more involved in their community could lift some of those emotions and reduce the spending issue.
Likewise, a senior may simply want to treat themselves or they may be passionate about whatever it is that they’re buying.
If you can talk this through with your parent, you may be able to find solutions that are practical and affordable.
For example, my mother-in-law had this problem and tended to heavily rely on mail order catalogs, often spending far more than she could afford to. There were various reasons but one of the most significant was simply that she enjoyed the process.
Getting her to stop entirely was never going to be feasible. But, we were able to find a solution, which involved limiting the number of catalogs she could buy from and her credit limit with them.
As a result, she was still purchasing but she had to be more realistic about the money that she spent.
Regardless of the situation and the specific challenges – simply being compassionate and willing to communicate is critical. When you do so, you have the chance to find a solution.
As part of doing so, you need to be willing to compromise.
After all, your parent is an independent person. They will have their own views about what is important for them and what isn’t. For that matter, people always vary in where they place their priorities and what they consider to be valuable.
And, regardless of finances, people do still need some luxuries. The trick is to find options that will work within a budget, which often involves cutting expenses and making wise decisions.
2. Talk About Consequences
One reason that seniors end up spending more than they should is that they feel that they have a safety net. For example, some seniors think that if they do run out of money, then their children will simply pay the bills. This is particularly common if you have bailed out your parent in the past or if your parent tends to feel entitled.
Your parent may also imagine that they can move in with you or your siblings if they are unable to afford to live on their own. While that may be true in some situations, it isn’t always ideal or practical.
And, that aside, you shouldn’t have to foot the bills for your parent or parents, simply because they don’t want to give up on luxuries.
Because of this perception, talking about the consequences of overspending is often critical. Doing this can also help parents to realize that they have to make a change. Nevertheless, it can be an emotionally challenging area, especially if you have a stubborn parent.
A key step to doing so is for you to decide what would actually happen. For example, if your elderly mother is $20 under in meeting a bill, what would you do? What about if the difference was $100 or more?
If the issue was a one-time thing, you might just choose to help your parent out. But, if it’s happening consistently, something needs to change.
Likewise, would you be willing to take your parent in if they couldn’t afford to pay their bills?
The idea here isn’t to scare your family member but to be realistic. After all, the senior needs to know what will happen and why the topic is so significant. Otherwise, they’re likely to think you are just being controlling.
But, as before, it’s important to approach this topic with compassion. After all, the consequences of overspending aren’t pretty and they can be difficult to hear.
3. Consider Fraud and Manipulative Marketing
In many cases, seniors won’t even be aware of all the money that they’re spending or what they’ve committed themselves to.
For example, there are many trial offers that automatically enroll people into monthly fees. Seniors often won’t read the fine print or won’t understand what it means.
Alternatively, clever marketing can often convince people to buy something. This is true for any age group but it is particularly significant for seniors who are especially vulnerable.
To make matters worse, even mild cognitive impairment dramatically impacts the ability to make sound financial decisions. This is a key reason why so many seniors are exploited, even ones who have a working knowledge of finances and marketing.
With that in mind, it’s important to keep an eye out for financial scams that target seniors, along with marketing tricks. There are also some services that have been recently developed to help families avoid scams. One of these is True Link and another is EverSafe.
Services like these can help protect seniors, while still providing them with financial independence. You can also monitor the accounts of your family member, keeping an eye out for any unusual charges or differences in spending patterns.
4. Know Your Limitations
The previous three approaches are all ways to talk to your parents about finances – and prevent them from blowing their savings or putting themselves in debt. But, you won’t always be successful.
At the end of the day, if your parent is considered legally competent, they do have control over their finances. So, you can talk to them about better solutions and you can try to protect them – but you can’t force them to make changes.
In some cases, parents will be truly unwilling to change, especially if they were never good at finances earlier in life. Likewise, your parent may not see any issue in their decisions or behavior. If this is the case, you may have to stand back and let things proceed as they will.
Learning More
Of course, these four areas may just be the starting point. Finance is a difficult topic. It can be even more complicated with seniors who don’t want to give up their independence.
One angle is to learn conversation techniques, including ways to promote a good dialog, even when the topic is difficult. Various authors have tackled this area in depth.
The book How to Have That Difficult Conversation is a good place to start. The book doesn’t focus on aging parents specifically, but it doesn’t need to either. The conversational techniques apply to many different situations.
There is also a book called Crucial Conversations. While this one focuses on the business environment, many of the lessons apply to interpersonal relationships too. The book is also one of the most well-recieved books in the field, suggesting that the concepts really do work.
One final option in this area is a book called Negotiating the Nonnegotiable: How to Resolve Your Most Emotionally Charged Conflicts. The name alone should tell you everything you need to know about the book.
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