Show #459 Airing Sunday 12/21/08
You think you’re having trouble keeping up with your own budget and finances? As your parents age, their financial woes could become yours, too! What am I talking about? Let me give you a real life example.
Molly’s husband died, and Molly was lonely. She often kept herself busy by shopping. Giant Eagle, CVS, Target, Sam’s Club: they all became her newest best friends.
Getting credit cards was easy, and Molly was happy to use them. When she couldn’t keep up with the payments, she just put the bills aside. As the collection letters came in, Molly simply switched to a different card.
Not surprisingly, the collection letters and calls became nastier. By the time Molly called her son for help, she had rung up tens of thousands of debt, adding huge amounts of interest day by day.
There are hundreds of stories like Molly’s. Would you be prepared if your parent runs into financial problems? Those problems soon could become yours.
So what can you do? To be proactive, the most important step you can take I talk to your parents about their finances, now, before a crisis hits. Ask them about their savings and bills; find out if they have a budget. Be empathetic and talk about how tough it is to make ends meet, and then ask if they are having any problems. Offer to help.
Hopefully, your parents will talk openly about their situation. Hopefully they will welcome your offer to help. But let’s be realistic. You may get this response: “It’s none of your business”.
Talking finances with parents is tough, for a number of reasons. Many parents don’t want to give their kids too much money information, for fear that the kids will try to control things when the control is not needed. Or worse, that the kids will try to grab the money.
But you should try. Because there is no better way to avoid disasters down the road.
Let me give you a few more tips:
- Be careful about using your own money to bail out your parents. Talk to a lawyer first; otherwise you might be throwing good money after bad.
- Don’t co-sign loans for parents and don’t sign as a responsible party on any contract unless you understand fully what you’re getting into.
- Ask your parents to give you their financial Durable Power of Attorney so you will have the authority to handle things if the need comes up.
Before I close, let me talk to you parents who are watching. If you trust your kids, help them to help you. Talk with them about your finances. Give them a Power of Attorney. And ask them for help if you need it. Remember, you were there to help them when they were young. Now it’s their turn to step up and return the favor.
