Finance

How to Talk to Your Parents about Their Finances

How to Talk to Your Parents about Their Finances

Death is often a topic we avoid, but one we cannot escape either. The loss of a loved one will always be difficult, but you can help reduce the amount of stress by completing my 7 Steps to Put Your Financial Affairs in Order. This will help make an emotional and chaotic time a little bit easier for your loved ones.

Today I’m going to focus on having “the talk” with your parents. For most of us, the first time we deal with the financial aftermath of death is after the loss of a parent, and it’s not always pretty. This isn’t always the easiest conversation, but one you need to have with your parents.

Expect Some Resistance

As you age, you become more keenly aware of your own mortality. Add in that money is often a taboo topic in many homes, and it’s likely your parents will be a bit uncomfortable when you broach the subject with them. I expect you will hear some variation of “we’re fine” and “don’t worry about it”. This may come as a huge relief to you, and you may be tempted to table the discussion. However, I suggest you ask a few more questions to make sure they are simply not pacifying you. Be prepared when you do that you may get some variation of “it’s none of your business”.

Be Gently Persistent

Whatever you do, don’t give up. Table the discussion for a short period of time and gently revisit it in the future. You might start by sharing with them some of the things you did to put your affairs in order. For example, you recently created a will and want to share with them some your decisions. Now you can ease into asking them about when they last reviewed/updated their will. You may find they are now more open to talking to you.

Remind Them Why You Care

This may seem obvious, but remember, it’s highly unlikely their parents ever talked to them about these things or vice versa, so this is a whole new world to them. Plus, they are your parents, meaning they are the ones who are supposed to take care of you. Even though they recognize roles may get reversed at some point, it’s still a hard reality for many parents to accept so be patient with them and remind them why it’s important they do this.

Reality Check: Depending on the age of your parents, there is a strong chance your father handles the money and your Mother does not have a complete picture of their overall financial health. I mean no disrespect, nor am I suggesting your parents don’t have a good marriage or that your father doesn’t respect your mother. It’s simply the way things worked when they got married. The problem is that statistically women live longer than men, on average five years longer. Thus, there is a high probability that your Mother will outlive your father and may be ill prepared to manage the finances. Magnify that with her grief, it is a recipe for disaster.

Emphasize the Importance of Financial Transparency in Marriages

Modern couples struggle with this, so don’t be surprised if you receive some push back as it may not come naturally to them. Help your parents revisit how they handle money as a couple, which starts with open communication on the following:

Now that they are in tune and communicating openly about money with each other, they are ready to complete the remaining steps in my guide on how to put your finances in order.

Bring In Outside Help

In some situations, your parents will simply not feel comfortable talking to you about their finances or their estate is complicated enough to warrant professional guidance. Don’t be offended, but be grateful they are willing to get their affairs in order. Work with them to find a knowledgeable estate attorney who can guide them through the process.

Tip: Be aware that even if you parents welcome your help, they may not be comfortable dealing with electronic forms and may still prefer to work with someone in person.

There’s Still More Work to Be Done

Whew. You’ve done a great job getting your parents talking to another (and you) about money. This will make it easier for their loved ones and also ensure their wishes are known and followed, which leads us to another important and overlooked topic – their long-term care needs. I’m not talking about their living will, but what they want to happen when they are no longer able to care for themselves. I’ll talk more about long-term care and some important considerations for you and your parents next Monday.

Shannon

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August 20, 2014  •  29 Comments  •  Finance

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  1. Wednesday, August 20th, 2014
    I'm so glad you wrote this, Shannon. Recently, I was speaking with my boyfriend about talking to his mom and step-dad about his finances and their finances because it seems like they think we're rich or something! I think having an honest conversation about finances helps the relationship so there are reasonable expectations with respect to doing things together (such as activities or vacations). I also really like your tip about bringing in outside help for your parents. Sometimes it's too hard to help your parents understand finances because it isn't the usual parent-child relationship. Outside help can be a great way to keep your relationship in tact while still ensuring they get help.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      Honest conversations are definitely key. You want to be on the same page and not have either party feel resentful. It's very true that parents can really struggle opening up to their kids and/or taking their advice, even when they know the intent behind it well-meaning. Sometimes being able to go to a neutral party for the needed guidance is what works best and keep the family harmony in place.
  2. Wednesday, August 20th, 2014
    I was more than fortunate that my mom and now late step-dad years ago were more than willing to discuss with me the idea of having a power of attorney/living will, a will and a do not resuscitate clause - all were notarized. I now assist my mom to manage her finances after my step-dad died but this requires a very high level of trust between parent and child. I keep her up-to date on her finances and she checks in with me about her spending. As you wrote, children may need to seek outside help in order to accomplish these tasks with their parents.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      I'm sorry to hear about your stepfather but I'm so glad that they talked to you about their affairs and you were up-to-speed so when you needed to step in, you were able to do so. It does require a high level of trust between child and parent and both parties need to be aware of what's expected of each other. And yes, never be afraid to ask for help because it can get complicated quickly and you want to make sure things are filed properly.
  3. Wednesday, August 20th, 2014
    I find this especially difficult to bring up some of the money issues or oversights parents are making. On one hand you want to point these things out in the hopes of helping. On the other, you know there will be resistance and the potential for conflict or hurt feelings to break out. What do they call this...the "powdered butt syndrome?" Once someone has changed your diaper it's really hard for them to accept advice from you.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      Very true, Brian. It's understandably hard for parents when roles begin to reverse and they start relying on you. And it is a very delicate balance with pointing out areas where your parents need some help because you know they will be sensitive. It's taking it slow and be gently persistent.
  4. Wednesday, August 20th, 2014
    I've had this conversation with my mom for a while now and there was a lot of resistance at first, but she's finally starting to listen to me. We're now working on her budget and we'll take it from there slowly.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      That's great you and your Mom are to point where she's letting you help her get her finances in order. She's got a great son. :)
  5. Wednesday, August 20th, 2014
    This is SUCH a hard conversation to have, but such an important one. I have everything under control with my mom, but my dad is a little more tight lipped about his finances. I have gently reminded him that at the very least, he should provide an easy way to find his information should something happen. It is awful to lose a parent, but the grief is compounded when their estate is very difficult to settle. The more you can discuss while your parent is alive, the better prepared you will be when they are not there or incapacitated.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      It is a hard conversation and so many people refrain from having it because they are afraid of causing upset feelings. There can be some resistance, and Dads to tend to be the tougher nut to crack, but when you can work through that, it really makes a difference. As you said, talking about it now means that you can honor their wishes later.
  6. Wednesday, August 20th, 2014
    We've been doing this since I was 18. My parents sat down and said, "this is where we are at, how much we owe on our house and other obligations." I didn't think it was a big deal, but since then we talk about finances and salaries all the time. If you do it early it isn't a big deal or uncomfortable. The interesting thing now is my grandpa is 94 and going through major health issues and my parents are seeing how hard it is to deal with finance issues with him. It led to more conversations about end of life care, trust, wills, making sure they don't get scammed, and current retirement accounts. Finances are a family affair. Great topic and discussion.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      "Finances are a family affair." - so true, Lance. And I wish more people saw it that way. It's fantastic that your parents have been so upfront with you about their finances. It's true the earlier you talk about these kinds of things, the easier it is for everyone. I'm sorry to hear that your Grandpa isn't doing well. It definitely reinforces the need to have these kinds of conversation when everyone is in good health (or at least relatively so) and able to talk through their finances and final wishes.
  7. Wednesday, August 20th, 2014
    Hi shannon,

    Remember I didn't have a great example of taking care of finances growing up. My parents have most of their affairs in order but we know they are not where they would like to be financially and that is due to the mistakes they made in the past. It can take time to recover from financial mistakes if one isn't careful.

    My sister and I help out with their finances and we're glad they are letting us help them. Now that my dad is close to retiring full time we want to make sure they can enjoy their golden years without any worries.

    Thanks for sharing these tips. I'm going to share it with my family :). Happy Wednesday!
    • Shannon Ryan
      Wednesday, August 20th, 2014
      Hi Corina,

      Yes, it definitely takes time to recover from past money mistakes and your parents are fortunate to have children who want to help out and make sure their retirement years are great ones. Definitely share these tips with them and help them put their affairs in order. It will definitely make things easier for everyone. You have a great day too!
  8. Wednesday, August 20th, 2014
    Great topic today. My sister and I have been trying to work with my parents about these issues. They don't have any debt an are in pretty good shape, but my mom is not proactive with finances at all, and my dad is in poor health. I think it will take a long time to get them to be more open. Here's to hoping we have plenty of time.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      Thanks, Kim. I think that's a common issue for their generation. Many of the women are not using to making financial decisions on their own and it can be a tough transition for them, especially when they are grieving too. It's great that you and your sister are trying to mitigate that from happening.
  9. Wednesday, August 20th, 2014
    Definitely expect some resistance. My folks were in town a few weeks ago, and I had a nice chat with my mom, and she was telling me everything I wanted to hear, but when the same convo came up with my dad, he and her are very far apart on where they want to retire to. I don't necessarily fear for them, but I don't think they realize how drastically their style of life is going to have to change. It's almost like some parents have a psychological block up against taking advice from their children.
    • Shannon Ryan
      Wednesday, August 20th, 2014
      Yes, I do think some parents may have a psychological block on taking advice from their kids. It's such a change for them and one of those signs that they are getting older. :) I'm glad that you are talking to them and keep it up. Most of the time it takes multiple conversations to get things moving in the right direction.
  10. Wednesday, August 20th, 2014
    Taking care of your parents is a great idea. Help them out with all those difficult to talk about subjects, like death and dieing. As always, a first rate post!
    • Shannon Ryan
      Wednesday, August 20th, 2014
      Thanks, Brad! They are not easy topics by any means but something we do need to do. And honestly, it feels good when everyone is one the same page and knows what needs to be done.
  11. Wednesday, August 20th, 2014
    I feel really lucky because as my parents approach retirement, I know that they have put a lot of time into planning their future. On the other hand, I know my MIL is not prepared for retirement or some of the decisions that she will need to make. Having watched my parents carefully plan and prepare for their later years has inspired me to do the same. I want to be prepared and make sure that everything is in order and planned out.
  12. Wednesday, August 20th, 2014
    Some topics are better left untouched. When my mom tried to talk to my grandparents (many years ago) about their finances, they totally flipped out. Thing is, my grandparents were university profs, and the last thing they wanted was their kid (my mom) teaching them what to do.
  13. Thursday, August 21st, 2014
    I am an attorney, and I have helped families come together to for estate planning purposes. I know I've had adult children tell me the first time they've successfully spoke to their parents about succession planning and their parents' finances was during our consultation. I think having an attorney, or other trusted family advisor, to act as a communication facilitator can be tremendously valuable as well...
  14. Thursday, August 21st, 2014
    Difficult topic to bring up with the parents...thanks for the reminder. I need to do this :(
  15. Thursday, August 21st, 2014
    I am seeing a lot of problems arise now that my grandma is not doing well. Her children are having to go through accounts and see what money is where and how much, etc. All of the bills are due, and it something that should have been taken care of before this. It is not a good situation for the family.
  16. Friday, August 22nd, 2014
    I'm pretty lucky in that my father is pretty savvy with the finances and both my parents are very frugal so I don't have much to worry about. They actually initiated the conversation with me telling me that they created a living will and other financial stuff. I can imagine it being hard to discuss finances with parents...my parents can be pretty stubborn and think they are right, so if they weren't on the right track, I'd have a difficult time getting them on it.
  17. Friday, August 22nd, 2014
    I have not sat down and talked to my parents about the future. They don't seem to want to discuss it. As a family, we will have to sit down and eventually have the conversation.
  18. Gabe
    Sunday, August 24th, 2014
    Any advice on parents who are divorced, with debt, student loans, and no life insurance? They are in their 60's, and I am in my 20's. We have a good relationship, so I could talk to them. I believe my mom intends for me and my new wife to take care of her in a few years. My father just got remarried, and his only income is Social Security. I can see that most of the principles of communication apply still, but I want to know what I should be doing financially now. I am the 5th of 6 children, but out of the 6 of us, my wife and I are the only ones with any real savings and income so far.
  19. Saturday, August 30th, 2014
    Talking finances with parents is tough. In most cases they'll be wondering why you are poking your nose in their "business". But I agree with you here, there is a need. As our parents age financial transparency will be all the more important. If for some reason I may have to chip in financially for their care in old age, I would want o know well in advance and plan for it.
Shannon Ryan SHANNON RYAN, CFP®
  • Meet Shannon

    "As a Certified Financial Planner, it is my passion to help individuals and families build a healthy relationship with money. I look forward to helping you raise financially confident kids.” - Shannon Ryan
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