If and when you become the person managing the finances of a senior no longer able to do so for themselves, you inherit a huge responsibility. Not only must you provide for their day-to-day and month-to-month expenses, but you must also manage any accumulated wealth and plan for incidentals such as large medical bills, moving costs, and other unforeseen circumstances. This results in a high amount of stress, especially if you do not have years of experience managing finances for yourself or others. The transition from caregiver to financial manager can be tough, and it frequently requires experts that can advise your decisions with training and experience.
Finding this help can be simplified into four easy steps, although the legwork of managing finances (and managing the stress of caregiving in general) takes considerably more than these four steps.
Step one: Evaluate your needs
Not everyone with control of their loved one’s finances needs an expert, but they all need a plan. It depends entirely on the circumstances of your loved one, what their financial needs and assets are, and what resources you can provide.
In evaluating your needs, first consider the financial needs of your loved one. Can they manage day-to-day finances, such as paying bills, buying groceries, and managing wealth? Do they need someone to check on investments or advise them concerning these decisions? Does your loved one require help with every aspect of financial management? Once you have identified the level to which your loved one requires help, you can identify what you can offer them.
You may have some experience managing finances—your own, to some extent for most adults, but you may even manage the finances of others through your job or other experiences. If you have no experience, it is obviously best to find experts who have more experience managing finances – and, specifically, the finances of seniors, if possible – in order to advise you and your loved one regarding financial decisions. Your plan for finding an expert, and what kind of expert to advise, depends somewhat on your experience. Someone who spent their education and job experience managing wealth or finances might find it much simpler to effectively manage this new responsibility, while others will need more expertise. Determine what level of advice is best for your situation.
Step two: Find an expert (if you need one)
If you find that an expert is something you need, you need to find one. That can be more of a hassle than you might, at first, guess, since seniors often require specific financial- and wealth-management advising for their situations and accounting for the fact of their age. Some accounting and financial management professionals may be able to help with day-to-day finances and setting up those systems, such as automatic withdrawal from a back account or connecting profits from an investment to a savings account. However, for more complex arrangements and for incidental expenses, more expertise may be required.
Word of mouth is still one of the best ways to find great financial professionals, especially for others in the same circumstances. Use the internet (and a good deal of common sense to filter out erroneous or false information) to find similar situations and to find good financial professionals in your area, and chat with others that you may know personally. This situation is a relatively common one for caregivers of the elderly, so you may be surprised at how many people can sympathize with your newfound obstacles and can steer you in the right direction.
Step three: Evaluate experts
It is okay – and, in fact, advisable – to “shop around” for a financial professional to assist you in managing your loved one’s finances. Visit with them and see what their plans may be, and what their strategies are for managing finances. Check their credentials and standing with organizations such as the Better Business Bureau. Scamming of seniors is still an ever-present danger, even if said senior is not directly involved in the scam; desperate caregivers, or hasty ones, can be caught in a trap where money will be mismanaged right into the pocket of an unqualified or unscrupulous financial advisor.
Step four: Re-assess when necessary
Plans are only as valuable as they are applicable to their circumstances. So, when circumstances change, it is important to remain flexible and be able to complete this process again. For example, if wealth is suddenly lost or accumulated through successful or less-than-successful investments, it changes the financial needs in front of you. Changes may complicate or simplify your financial management plan, but they should be an important part of what is truly a continuous responsibility on your part to provide for the needs of your loved one.
Campbell, Jesse. When and how to take control of your parents’ finances. Money Management International (November 13, 2013). Available at http://www.moneymanagement.org/Community/Blogs/Blogging-for-Change/2013/November/When-and-how-to-take-control-of-your-parents-finances.aspx. Retrieved May 8th, 2016.
Cettina, Teri. 8 steps for managing parents’ finances. Available at http://www.bankrate.com/finance/taxes/8-steps-for-managing-parents-finances-1.aspx. Retrieved May 8th, 2016.
Randall, David K. Taking Over Elderly Parents’ Finances. Forbes (November 11, 2009). Available at http://www.forbes.com/forbes/2009/1214/investment-guide-10-retirement-estate-taking-over-elderly-finances.html. Retrieved May 8th, 2016.
Williams, Geoff. 5 Tips for Helping an Elderly Parent of Relative Pay Bills. U.S. News & World Report: Money (November 15, 2013). Available at http://money.usnews.com/money/personal-finance/articles/2013/11/15/5-tips-for-helping-an-elderly-parent-or-relative-pay-bills. Retrieved May 8th, 2016.