Helping others manage their finances
Former first lady Rosalynn Carter once said, “There are only four kinds of people in the world — those who have been caregivers, those who are currently caregivers, those who will be caregivers, and those who will need caregivers.” Protecting and caring for our loved ones is a fundamental part of the human experience, and this extends to finances too.
Maybe you’ve noticed a loved one forgetting to pay bills on time or missing important appointments with increasing frequency. Whether it’s an aging parent, a relative or even a beloved neighbor, helping others manage their finances can feel daunting, but it may be an essential step in helping protect their financial well-being. This guide is intended to help you navigate this delicate process in a way that preserves your loved one’s dignity while also helping to protect their financial future as they age.
Recognize the signs
Money is often a difficult subject and can be more so when you add aging to the mix. Instead of diving headfirst into an awkward conversation, it might be good to start by looking for opportunities to step in to offer support, such as:
- Mail piling up: An excess of unanswered or unopened mail, especially things like bills or official notices, might be an indicator that your loved one is struggling to keep up with their affairs.
- Bills past due: Overdue notices and other evidence of unpaid bills are another sign that things aren’t going as well as they ought to.
- Memory issues and difficulty with everyday tasks: Struggling to remember important appointments or doing everyday tasks like balancing a checkbook could be signs of potential cognitive decline.
- Changes to spending habits: Sudden changes in spending patterns, large withdrawals or missing money that can’t be accounted for might point to potential fraud or financial abuse.
- New “friendships” or relationships with a financial implication: The emergence of a new friend or relationship accompanied by a sudden change in spending habits may be indicative of undue influence or potential financial elder abuse.
If you notice some or all of these signs with your aging loved ones, you’ll likely need to have a tough conversation. It’s helpful to approach this situation with as much sensitivity and empathy as possible. Instead of sounding like you’re accusing them of something, try to approach it as a genuine concern about their financial well-being. For example, you might say something like, “Mom, I’m noticing that you seem a little overwhelmed with everything you have to take care of lately. I'd like to help you manage your finances so you can focus on enjoying life more.” Remember: No one wants to feel like they’re incapable of something, but a loving, helping hand is usually welcome. Patience and understanding are crucial components of this conversation.
How to help someone with their finances, step-by-step
Once you’ve had the initial conversation (and they’ve agreed to it), it’s time to start getting everything you need in place. Here are some basic steps to get started:
- Gather paperwork: Start by working with your loved one to gather the relevant financial documents like bank statements, tax returns, insurance policies, pension information and anything that can help you understand their current financial situation.
- Assess the financial picture: After gathering the necessary information, review it carefully to learn about your loved one’s income, expenses and liabilities. This step helps create budgets, pay bills on time and find potential areas to save.
- Tie up the legalities: Depending on the situation, obtaining a power of attorney (POA) that allows you to act on the other party’s behalf might be needed. In more severe cases, you may also need to look into something like a conservatorship or guardianship. Consult with an attorney to learn more.
- Simplify where possible: Automating payments (where possible) and reducing nonessential spending are great ways to reduce the burden of managing finances. Switching to online accounts and opting for paperless statements might also help make life a little easier.
- Be open and transparent: Transparency is crucial throughout this entire process. The person you’re helping should be an active participant which also helps them maintain their sense of autonomy and independence.
- Seek professional help if needed: Getting help from experts like financial advisors, elder law attorneys or accountants could be beneficial. They may have tips and knowledge that you hadn’t considered.
Challenges of helping manage someone else’s finances
There are several potential challenges you may face along the way, beyond just the logistical challenge of setting everything up properly. Sometimes, the person you’re trying to help may be resistant to it or try to keep some things hidden from you. This can happen for several possible reasons, most of which boil down to discomfort. As mentioned earlier, respect, patience and empathy are crucial. Offer to work together on things to help ease some of that discomfort, possibly starting small with just one or two tasks to build trust.
Other challenges might include having to deal with pre-existing financial issues. This is another area where empathy (and a cool head) comes in handy. You’ll need to help create a plan to deal with the issue, whether it’s unpaid taxes or high-interest debt. Consulting with a qualified professional like a financial advisor could be beneficial here.
Finally, there are also family and personal dynamics to contend with. There may be other family members or concerned parties that disagree with you helping the loved one. While these dynamics can get quite complicated depending on the situation, clear and open communication can go a long way to alleviating these matters. Consider holding a family meeting where everyone involved can discuss the best way to help. Third-party help such as a mediator or advisor may also help.
Self-care for caregivers
As you go about the process of becoming a caregiver to a loved one, don’t forget to ask yourself an important question — who heals the healer? Caregiving is an immensely noble task, but if you don’t also practice some self-care to go with it, you might find yourself burning out. A helpful acronym to start thinking about it is B.E.S.T. practice:
- Boundaries: Having clear boundaries around your time and responsibilities, as well as the limits of what you can or should help oversee, is beneficial for both parties.
- Enlisting support: Connecting with other caregivers, friends or family members helps create a support network and community that you can call upon if you find yourself needing emotional or practical support.
- Scheduling breaks: Scheduling regular breaks to recharge and pursue your own interests and activities helps prevent burnout.
- Therapy: Being a caregiver of any kind isn’t easy, and while seeking help from your network is great, there may be times when you’d be better off speaking with a professional.
How to help protect your parents’ assets
Helping protect your parents’ (or other loved ones’) assets requires a proactive approach. Start by sharing what you’ve learned about common financial scams and how to spot them. For instance, legitimate organizations won’t pressure someone to provide personal information or aggressively demand upfront payment. Remind your loved ones to beware of unsolicited calls, emails that sound too good to be true or involve an investment schemes that guarantee a return. When in doubt, always verify before acting.
Monitoring account balances, bank statements and credit card transactions is another way to help spot or prevent potential fraud. You can also help them access and encourage use of mobile banking apps. The Chase Mobile® app can help monitor accountholder’s finances by keeping tabs on account balances, access bank statements, and review credit card transactions all in one convenient location. If that’s not enough, it goes further: You can set up alerts such as those related to when there’s been an unusually high transaction on an account.
Another important step is to ensure that the owner and beneficiary designations for the person you’re helping are up to date on all their accounts and assets. Review the paperwork with them to confirm that the right names are in the right places, per your loved ones’ wishes. Without this, an outdated beneficiary (such as an ex-spouse) could still inherit the assets in question, even in the presence of a will that says otherwise. Updating these designations now could help prevent a potentially lengthy and complex probate process later.
Finally, you may also want to think about long-term care planning and how their estate will be handled. This is another great time to work with them to enlist professional, third-party help such as an estate planner, a financial advisor or an attorney. They can help provide options, possibly even drafting a letter of wishes that officially outlines what your loved one wants.
Helping elders manage money: maintaining financial independence and dignity
If you’re a parent or elder who needs help with your finances, remember that you have a say in how your finances are handled. Getting help from loved ones isn’t about losing control, it’s about finding a balance between assistance and autonomy. Don’t be afraid to set your own boundaries — including which financial responsibilities you want to handle independently.
In summary
Helping someone else manage their finances is something you may not have considered as “caregiving,” but it’s clearly an important responsibility that needs to be handled with empathy, respect, and a lot of careful planning. Recognizing the signs, creating a step-by-step path to help address any issues that may arise, and seeking professional advice can help protect their financial well-being while preserving their independence and dignity.
