Aging can be expensive. It can also mean less income to meet those new expenses. To keep a balance, the elderly may need help revising their budget plan. Spending habits that worked before may no longer be effective.
How can you help your aging parent stay on the right track financially, while still covering all the comforts of life?
1. Offer to Help
If you think your loved one might be spending more than they can afford, or may may be having difficulties balancing their check book these days (due to poor vision, lessened cognition or other causes), then offer to help.
They might not need or want you privy to every aspect of their private financial business, but they may feel relieved to have someone read over the fine print on loans, policies and accounts to make sure they are getting the best deal possible.
If you can't personally do this, consider the services of a professional financial adviser. Especially if the details are too complicated to explain long-distance.
2. Find the Best Deal Possible
Think mom or dad could be saving money with a different insurance policy? Get some new car insurance quotes and explain them to your loved one. Some personal finance gurus recommend comparing new insurance quotes at least once a year, or at the very least, checking that your current company is giving you all available discounts.
Don't be surprised if the suggestion is met with resistance. If your parents have always used the same company or agent, they may feel they are betraying loyalty by changing now.
Check into other banks, utility service providers, and credit companies too.
3. Scope Around for Senior Discounts
Is your elderly loved one taking advantage of all available discounts?
Look at all areas of spending and see whether or not they may be able to save a few dollars here and there in places they didn't expect.
Sites such as AARP will keep you up-to-date on discounts and laws that help senior citizens save money on everything from travel to retirement accounts. If you can't afford a membership, at least follow their website and social feed for news.
4. Track Outgoing Expenses
This doesn't have to be fancy. Use a spreadsheet to track all outgoing expenses such as loan payments and utilities. Estimate the cost of groceries and other spending based on receipts and transactions.
Look closely to see if your parent is paying bills on time. If not, they may be eating the cost of late fees.
They may also be paying fees for services they don't use, so discuss altering expenses such as phone and cable plans to match their habits and their wallets.
Credit cards can be a big problem too.
4. Check for Scams and Suspicious Actions
If you tally up your loved one's income and their total expenses, and there seems to be some large deficits, then you need to find the leak.
Maybe your aging parent is falling victim to phone scams or shady charities. The elderly, especially if they are in the early stages of dementia, can be vulnerable to smooth-talking sales calls.
They may also fall into loopholes left by sly companies that deliberately mislead them towards unnecessary subscriptions, fees, or "perks" that don't really benefit them.
Put a check on how much they are dishing out to various charity organizations and individuals too, if the amount is hurting their own lifestyle. It might be good to give, but not if it means your parent is doing without food or other necessities to cover the cost.
If donating to charity is an important aspect of their life, it might help to narrow it down to one or two charities with special meaning. Do the research to make sure they are legitimate organizations.
5. Make the Budget Plan
Create an easy-to-follow spending plan tailored to your loved one's needs. This is the hard part, because everyone's financial situation is different. A senior who lives check-to-check on social security needs a different plan that a senior with a healthy amount in savings, retirement funds, and assets.
If you went through the previous steps, then hopefully you created some "breathing room" with the money. Now, you just need to make sure that any extra is dispersed where it is needed most.
If you follow the basics of personal finance, all income should be divided into:
- Savings
- Expenses
- Spending money
With the elderly, especially those who live near or below the poverty line, savings (if existent) is usually intended to cover long-term care and/or funeral arrangements.
It may not be possible to save enough now to cover the cost of assisted living or end of life care, but any additional money in savings can help with out-of-pocket expenses that may crop up later, even if you choose to be a family caregiver when the time comes.
6. Help Your Loved One Save Money Everyday
If your elderly loved one is having problems managing even with a budget in place, then you may have to be more proactive. Here are some ways you might be able to help:
- Set up a calendar and schedule that are easy to read and understand (use visual cues such as stickers, if needed)
- Keep a copy of your parent's budget and bill pay schedule
- Call and give phone reminders when something is due
- Offer or arrange transportation to the bank, post office, or appointments
- Set up automatic bill pay to guarantee no late fees
- Negotiate with services for lower prices
- Make sure your loved one is able to shop for groceries and other needs at places with competitive prices (not just the closest, possibly overpriced market)
- Watch for sales and coupons for items your loved one uses
- Keep their car and home maintained to prevent costly repair bills later
- Replace small appliances in the home that may be using more power than necessary (think of that microwave left over from 1992)with more energy efficient models.
- Routinely check out their home for safety risks that could lead to costly medical bills (this includes checking the fridge for spoiled foods)
- Help them replace standard light bulbs with CFLs
- Help them sell items they are paying for but don't use (for example, an elderly woman may be paying insurance/loan payments on a boat or car that belonged to her deceased spouse)
- Make sure they are using gift cards, rebates, and store rewards before they expire (some older persons may not understand the terms, or may hold onto gift cards in case of emergency)
Frugal Living Matters, But Only When Done Right
We could all learn a lesson in frugality and saving from the elderly. They are usually masters of the art. However, they may not always know the best "new ways" of investing what they save so that it maintains (or surpasses) its original worth.
Rather than taking control of your loved one's finances (unless it is deemed necessary due to health) or belittling them for not being more money-smart, team up! Combine their savvy saving skills with your modern personal finance knowledge.
Its never too late to start handling money better. In the long-run, it can save time and stress for both you and your aging parent.
No comments:
Post a Comment