Tuesday, April 10, 2012

Money and aging parents

I was having a conversation with a co-worker the other day and she was telling me about how she is going to start taking over the bill paying for her parents, who are in their mid 80's.  Her mom has been losing her eyesight and my co-worker thought this was something she could help her mom with, since she lives in a different state and is not able to physically do much to help out.  I'm not sure about her dad, but it kind of sounds like her mom has always taken care of the bills, so dad, at his age, is not really an option to start having him pay the bills.

My co-worker has found a bit of a surprise where her parents finances are concerned. She found out they have over $15,000 in credit card debt.  She's making a trip to visit her parents and see what she can work out to start getting their finances in order.  But she feels like she is in a tricky situation.  She doesn't want to make her mom feel like she is judging her or trying to take over her finances, but she also knows she really needs to get her mom to make some changes. In a phone conversation with her mom, just mentioning the credit cards to see how her mom might react, it is obvious her mom doesn't really have a grasp on what these cards are costing her.  Her comment to her daughter was "but I am making a $300-400 payment every month on them".  My coworker had to point out to her mom that she is also charging the same amount each month or more, so the balance is not going down, plus she is paying over 20% interest on the 2 cards.  Mom's reply: "but I saved 5% on my purchase by getting the card".  And then she told her she just signed up for a Target credit card so she could save the 5%.  Co-worker tried to explain to her she is not saving 5% if she isn't paying off the balance in full each month.

My co-worker is financially savvy, so there wasn't really any advice I could give her that she doesn't already know.  It's just hard when it's your own parents! We both agreed that when she is visiting she should get out the statements and try to show her mom how much she is getting charged interest each month.  The hard part now is she can't see well, so it won't have as much impact on her to actually see the numbers in print.  It will be interesting to see how my co-worker's visit with her parents turns out.  I have a feeling she will end up helping them get out of this financial debt with her own money, more than likely, without even letting her mom know about it.

I'm glad I won't have to go through this with my mom, one less thing to worry about as she ages.  She probably still has the first dollar she ever earned, LOL.  Dh isn't close to his parents anymore, so their financial problems (and I'm sure they still have them  - they always did) won't be ours to deal with.  Thank goodness for that - they are nearing 80 years old and I know even 6 or 7 years ago they still had 20 years left on their mortgage and loads of credit cards.  I doubt much has changed in their lives. Scary.  We have 15 years left on our mortgage, so at least it will be paid off when I retire, which is a minimum of 15 year away.  I don't want to burden my kids or leave them with a mess to clean up when I get old.


  1. I won't be leaving any debt to my kids either! I know my mom has debt but I don't think it's a huge amount or anything...

  2. I don't plan to leave any debt either, but I also don't want to burden them with problems when I'm old and need help managing my money, like my co-worker is going through. My mom takes care of my grandma's finances and she, thankfully, was all in order and no problems. She doesn't have a lot of money but she was frugal and had her finances in order.

  3. That is something I think a lot about too. My parents don't have any debt (credit cards are almost non-existent in Russia),and my Mom is very frugal and savvy about their money. But my Dad is terrible. They are still young but it worries me that they don't think much about the future and retirement. And I wonder who convinced an 80-year old to sign up for a Target card?? Who would take advantage of her like that?!

  4. If we keep going along as we are, our children will not be left with our debt. My hope is that we'll also leave them a "gift" to help them along their way.

    Dh's parents are always in debt. And in their 70's now, still paying huge rent (twice what our mortgage payment is) because they refused to ever buy a house - "what if something went wrong, we'd have no landlord to fix anything & we'd have to cut the grass ourselves?" Wow!

    My parents had some debt because they closed their business when my dad became palliativ. But my mom squeaked away at it and cleared it up several years ago. Proud of her for not throwing in the towel!

    Hope your co-worker is able to help her mom get back on track. Scary that older people could be taken advantage of. Sad .... :(

  5. I just want to say that unless you have tons of siblings to share the load of parents when they can no longer care for themselves(and their finances)or your parents have long term care insurance in place, you are better off having the "money talk" with your parents sooner than later, no matter how much you and/or they don't wan to have it.

    The chances are your parents(speaking about everyone's parents)will linger and be sick at the end of their lives rather than pass away quickly from an accident or natural cause is very high. And they usually don't 'go' together, so someone who can't/doesn't/won't handle the money or even know about the money will be left is high.
    I'm not trying to scare anyone or be gruesome here. For most families it's a hard issue to deal with--the kids becoming the caretakers in any way. But don't avoid dealing with it until it's a crisis situation.
    Without going into details, I'm an old(ok, maybe just older)lady. I've, or rather We've been through 4 parents dying if you include my husband's as well, as well as my bachelor older brother's passing. Each situation was different but we were called upon in 3 of them to deal directly with the finances. Not that we wanted to, but it was called for.
    I've seen what/where these situations end up too often. Do yourselves and your own families a favor and don't wait until your parents want to include you in their plans and money. Because the chances are they will never willingly reach out to you or they will wait until it's too late to change things for the better. You may need to protect them from possibly themselves, from other relatives, from strangers and/or businesses so it's better to be proactive and have the talk asap. Get your parents to get a power of attorney, a medical power of attorney and a revocable living trust making you or a trusted member the designated trustee. Until they are mentally incapacitated they are still 'in charge' of these documents but it will give everyone big peace of mind having them. And when the time comes, you'll be so glad you have it in place.
    Trust me.....

  6. I'll be dealing with this very thing when I return to Europe next month. I dread to think what my parents' finances are like because they were always terrible with money. I know that I am going to have to help out in some way or other because my dad keeps buying new cars and I have NO IDEA where he's getting the money from to do it. Plus, they are both getting older and their decision making skills have diminished.

  7. Wow that's such a tough situation. You love your parents and want to help them, but at the same time, you have your own situation to worry about. Wow, what a hard place to be. Keep us updated on how she handles it.