Is it time for a financial intervention with your parents?

Sometimes it’s hard enough just keeping track of your own finances. But as many of us have learned, life gets even more complicated when your parents come to you for assistance with their money matters – or worse, when they don’t ask for help but really should.

Many people are fiercely independent and hate to relinquish control over any aspect of their lives, especially personal financial matters. Some are downright suspicious when anyone, including their own children, tries to intercede.

But don’t give up. Try to become familiar with your parents’ financial, medical and legal records while their health and finances are still in good shape so you’ll be able to spot any warning signs that something’s amiss.

Indicators that your parents might need a hand include:

• Unpaid bills, late payment notices, or utility shut-off warnings
• Calls or letters from creditors or collection agencies
• They’ve had to choose between filling prescriptions and buying food, utilities or other necessities
• Unlikely magazine subscriptions or cheap prizes – signs they may be targets of telemarketing or get-rich-quick schemes
• Seemingly unnecessary home improvements, or conversely, signs that they can’t afford needed repairs
• Uncharacteristically lavish spending on vacations, new cars, etc.
• If your parents initially are reluctant to share their financial and legal information, tell them you’re working on your own financial planning (budgeting, creating a will, retirement savings, etc.) and would like their advice. That will lead naturally to discussions about their own plans. Or bring in an impartial party such as an attorney, financial planner, social worker, or trusted friend to guide the conversation.
• Offer to help your parents organize their finances. Set up and periodically update files containing:
• Details of all major possessions and relevant paperwork (such as property deeds, car registration, jewelry, etc.)
• Outstanding and recurring debts (mortgage, car loan, medical bills, utilities, etc.)
• All income sources, including Social Security, pension, 401(k), IRA, investment accounts, and savings
• Bank accounts, credit cards, safe deposit box contents, and insurance policies, including password, agent and beneficiary information
• Will, trust, power of attorney, health-care proxy, funeral plans and other documents showing how they want their affairs handled
• Contact information for their lawyer, accountant, broker, financial planner, insurance agent and other advisors

A few more tips:

• Help your parents create a detailed budget so they always know how much money is coming in and going out. Free budgeting tools are available at www.mymoney.gov, the National Foundation for Credit Counseling (www.nfcc.org), www.mint.com, and Practical Money Skills for Life, a free personal financial management program run by Visa Inc. (www.practicalmoneyskills.com/budgeting).
• If you’re helping pay or process their bills, request that duplicate account statements be sent to you as well, so you can quickly spot any errant activity.
• Set up automatic bill payment for utilities and other monthly bills to avoid late payment fees. Just make sure the account is always sufficiently funded.
• Many retirees must file quarterly tax returns – a daunting task for anyone. Offer to help with the paperwork or, if they work with an accountant or tax preparer, ask to attend the next meeting.

Don’t be afraid to ask your parents if they need help managing their finances. Chances are, in 30 years you’ll thank your own kids for the offer.