6 Tips to Begin Managing and Protecting Your Parents’ Finances

As your parents age, you have an opportunity – and perhaps a need – to help them manage their finances. Once a straightforward task for your parents, staying on top of timely bill payments may now become a harder slog that leads to missed payments.

For example, if one parent handled the “money stuff” and that parent passes away, being able to seamlessly step up and help your surviving parent may be a tremendous gift. Similarly, if a parent is diagnosed with dementia or Alzheimer’s disease, it’s crucial to get the legal paperwork in place that will enable someone they trust to step in and handle their finances if and when they no longer are capable.

And then there’s the cold truth that older adults are a frequent target for all sorts of scams and fraud. Having the help of an adult child to manage or oversee their finances can be an aging parent’s best protection.

The bottom line is that helping aging family members with finances can serve you both. It not only protects them from mistakes and fraud, but also will save you time and heartache compared to finding out about a problem after the fact.

Here are six tips to help navigate your family’s finances as they age.

Despite the best of intentions, broaching the topic may not initially be well-received. Taking the time to slowly talk through things – over multiple conversations, not one chat – gives your parent the respect and space to embrace that you have a shared goal: keeping them, and their money, safe.

Don’t rush in and tell your parents what needs to happen. This isn’t your decision; it’s your suggestion for ways to protect them and make their life easier. There’s no single script that works. You know your parent best. Try to find ways to broach the subject that may resonate with them. For example, maybe you’ve recently taken some planning steps of your own, such as creating a will or a trust. Share that, and describe how it has you thinking about ways to help protect their finances, too.

Once you’ve got your parents’ buy-in to helping them manage their finances, don’t overwhelm them – or yourself – by trying to tackle everything at once. Pick off one or two “to-do’s” from the list below; once they are in place, move on to the next task. It’s not about taking instant control, but about helping over time – the goal is to have a plan in place before help is ever needed.

If your parents haven’t already set up autopay for recurring bills, suggest that this can be a great time-saver that can guard against late payments or slipups. Offer to sit down at the computer with them and set up relevant payments.

Similarly, ask your parents if they receive any payments with a paper check, such as pension payments or required minimum distributions (RMDs) from a retirement investment account. Explain how much safer and easier it can be to have checks deposited directly to their bank account, and that you can help them make the switch.

If your parents haven’t yet switched over to electronic financial statements, talk to them about the value of going paperless. It’s reliable, and typically safer – no lost mail or mail account numbers in the wrong hands. Offer to have the e-statements sent to you if they aren’t very active online.

Getting added to your parents’ bank account ensures that you’ll have quick and easy access if an illness or injury makes it hard for a parent to manage things. It’s better to do this sooner, rather than later, as the change might require you to visit the bank together.

Talk to your parent about whether they’d let you receive text or email alerts for the account. Make it clear that you’re not looking to micromanage their spending; you simply want to make sure their bills are paid on time. Reassure them that you’ll take on the job of being their fraud detector by setting up alerts for any debits exceeding a certain dollar amount.

A lesser-known feature of credit cards is that the account owner (your parent) can add someone they trust (you!) as an account manager. This will allow you to have access to the account, and if there is ever a problem – say, a suspicious charge – you will be authorized to work things out with customer service, which any parent should be grateful for.

You can set this up over the phone, with both you and your parent on the line, as they might need to answer some security questions. If they aren’t able to do that, you will likely need to first obtain a durable financial power of attorney (more on this later) and then contact the card issuer with your request to have account access.

Here, too, setting up alerts to your email or smartphone is a great way to catch any worrisome charges.

Older adults are often the target of telephone and email scams.¹ To protect your parents against falling victim to fraud of this kind, a good starting point is to register with the National Do Not Call Registry. Registering can help slow down the influx of robocalls, but it isn’t a perfect solution; some spam – and scam – calls are likely to get through. The same goes for email, despite automatic spam filtering.

Respectfully talk to your parents about never giving any information to someone who calls out of the blue. Even if the caller says they are from their bank or other known account, the advice for the parent is to politely hang up and then call customer service directly, or log in to their legitimate online account, to refute or verify the caller’s claim. Or you might suggest that your parents use this script: “You will need to speak with my son/daughter. Please give me the best phone number that they can reach you at.” And then they are to hang up, and let you know about the call.

Instruct them to do the same with emails. Tell them never to reply to an unsolicited email requesting sensitive financial information – it could be a phishing attempt. Suggest that your parents forward any questionable emails to you.

For more security tips, read “How to Protect Against Senior Fraud.”