Money Talks: Speaking With Your Parents About Their Finances

A few years ago, my mom entered semi-retirement. As a single parent, she raised my older brother and I while working two full-time jobs as a nurse in convalescent care. In her new chapter of life, she would “only” be working four days a week at one job. I pictured her enjoying a leisurely life, spending mornings swimming laps at the local pool or tending to her garden.

Fast forward to the present, and she’s working far more than four days a week. She still takes on shifts at another nursing home. At first, I thought my mom was working more than anticipated because she was merely bored and it was her way to stay connected to society. But it turned out that her reason might’ve also been a financial one.

Talking money with anyone can be challenging, and it can be particularly difficult with your parents. Here’s how to go about discussing finances with your aging parents.

Carve Out Some Time

Figure out a time to have a detailed chat with your parents about their money situation. It doesn’t have to come off terribly formal; you can talk over lunch or during a car ride.

So how can you best broach the topic? While it largely depends on the dynamic you have with your parents, you can kick things off by saying you care about them and that it would be helpful for both you and them to have a heart-to-heart discussion about finances. And because they’re entering a new stage in their lives, you should tell them that you wanted to see if there’s any concerns they have about their money.

On the flip side, if your parents are the first to bring up the topic of money, be open-minded and focus on listening and understanding. You don’t have to come to the table with answers or a solution, just an openness to see what their concerns might be.

Be Focused On Your Discussion

When you do get a chance to sit down and chat with your parents, be specific in what it is you’d like to talk about. A few things you might want to discuss:

• Are they on target for their retirement savings?
• If they’re not on target, how will that affect their lifestyle? Are they considering moving to a less expensive part of the country? Downsizing their home to lower their housing expenses? Or will they need to work during semi-retirement?
• If their financial picture isn’t where they’d like it to be, do they expect help from their children? If so, exactly what would that entail?
• What debt do they carry (e.g., a mortgage, student loan debt, personal loans, etc.)?
• Do they have life insurance? If so, what’s the policy amount(s) and what does it cover?
• Do they have an estate plan in place?

Respect Their Boundaries

Like pretty much everyone else, your parents have their own hang-ups about money.

While you might have the best of intentions, firing off a round of 20 questions about your parents’ financial affairs might feel more like an intrusive probing than a well-meaning chat. Truth be told, I haven’t been able to really get to understand the reality of both my parents’ finances. Over the years I’ve had to pick up on subtle hints on their true financial state.

Bottom line: Be sensitive, and handle such talks with kid gloves. Think about how you might approach such money matters with your friends and significant others. You can employ the same approach with your parents.

Communicate Your Own Boundaries

If your parents would like some financial help, it’s important to set limits and make them clear. While we’d all like our parents to be comfortable during their golden years, we have to remain realistic with what we can offer.

The truth remains: You can borrow for anything else – a house, a car, your children’s college education – but the one thing you can’t take a loan on is your own retirement. By expressing that you care, you can also let your parents know what you can realistically do to help them out. If it’s not financial, maybe you can provide assistance in other ways. If you live nearby, you can help with chores. Or if you have children, perhaps you can “hire” them to watch your kids.

Get On The Same Page Regarding Expectations

When chatting with my mom a few months ago, she let it be known that when she stopped working she’d be open to me and my brother helping her out financially. It wasn’t until last week when I told her I’d be happy to help her as much as I can, but I wasn’t quite sure what her expectations were.

If you’re not on the same page regarding expectations, you might find yourself biting off more than you can chew, getting into tiffs with your parents or cycling through resentment. Case in point: I hated to get candid, but when it came to helping my mom out, I asked her if she had a specific number in mind. Talks have been tricky, but getting specific makes sure we’re seeing things eye to eye.

Approach Estate Planning Concerns With Sensitivity

While you don’t necessarily need to know any specifics about your parents’ wills, it’s important to understand their needs and expectations when it comes to a Power of Attorney Directive. In the case that one of your parents is unable to speak for themselves, who will speak on their behalf when it comes to making critical decisions about their health and finances?

Along the same lines, an Advance Directive lays out exactly what a person’s wishes are when it comes to medical treatment. If a person is in a state where they’re able to communicate this, how would they like their treatment to play out? Should you find yourself caring for a loved one, expectations need to be communicated well in advance.

When the tides seem to shift and it’s your parents who might need some assistance with their finances, you’ll want to be mindful of your new dynamic. And that involves knowing how to best handle sensitive money topics.

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