When you were a kid, your parents probably talked to you about money, perhaps about the value of a buck or how you might spend your allowance. As time marches on, you may find the situation reversed—and that you have to have the "money talk" with your parents.
It’s important to impart a clear
message that you have your
parents’ best interests in mind.
Make sure they understand that
the goal of the discussion is not
for you to exert power, but rather
to help and support them.
Adult children sometimes feel concerned that they're invading their parents' privacy when raising money issues. Parents, meanwhile, can feel threatened, or worry about losing their independence. Still, it can be helpful to have a dialogue with your parents about their finances as they get older.
"If you're lucky, your parents are happy if you offer to help," said Amy Goyer, AARP's family and caregiving expert. "Or, you might get the reaction that this is none of your business."
Not surprisingly, many adult children and their parents sidestep the issue.
Recent studies confirm that parents avoid having conversations about aging and money, assuming that their adult children either know or will figure out what needs to happen. On the flip side, adult children are also unlikely to start a conversation about financial topics with their parents. But avoidance may lead to problems down the road.
Here are some tips to get these conversations started and to help make "the money talk" a successful one:
Show your love. It's important to impart a clear message that you have your parents' best interests in mind. Make sure they understand that the goal of the discussion is not for you to exert power, but rather to help and support them.
Choose your words carefully. You want to be as non-confrontational as possible. AARP's Goyer recommends using "I statements"—sentences that begin with the word "I" as opposed to "You." For instance, instead of saying "You need to…" use phrases like "I'm concerned you may need to," or "I want to support you," Goyer advises. Validate your parents' feelings, Goyer added. Make sure you express that you understand their concerns and their fears.
Talk about yourself. If relevant, use your own experiences as a bridge to talking about your parents' needs. For instance, mention that you're thinking about signing a power of attorney or are considering purchasing long-term care insurance. You can then ask your parents whether they have done the same.
Offer to help. Ask your parents if they need help with small tasks that are not directly related to money. As they grow more comfortable with accepting help, you can start offering your assistance with managing their finances.
Ask the right questions. Those should include: Do you have a financial power of attorney in place? Have you compiled a list of all of your accounts? Have you named beneficiaries for those accounts? Have you given your financial firms information on a trusted contact? Do you have life insurance? What financial firms and professionals do you use and do you have an attorney, what is their contact information? Where do you store your important documents, such as insurance policies and account information?
Keep an eye out for scams. Once you have opened a dialogue with your parents about money, you will be in a better position to help them spot and avoid scams, or cut them off sooner. Be careful, though. Lecturing your parents about their mistake when it comes to a scam can play right into a scammer's hands, according to AARP. Instead, help talk your parents through your reasoning for why something might be a scam. And if they've been victimized, encourage them to talk to the authorities to help protect others.
Consider professional guidance. Involving someone outside the family with expertise in aging and financial matters can be valuable, especially if parents simply don't want to open up to you. Consider suggesting they meet with a professional who advises older clients, such as an elder lawyer or a financial professional. While you might not have control over what happens next, third-party nudges could provide the push needed to get the conversation started within the family.