When Your Parents' Financial Health Becomes Your Concern

As life progresses, financial situations universally and constantly transform. Regardless of age or status, an individual's financial health today will not be identical to what it was 10 years ago or 10 years from now. Whether due to a job change, unexpected and life-altering circumstances or retirement, finances and budgeting are always in a state of transience.

While preparing for your own inevitable ride ahead can be difficult enough, family members' financial situations often begin to weigh on loved ones as the years go by.

Helping struggling family members is not cut and dry, nor is the brevity of the situation easy to detect.

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Some Signs Of Familial Financial Distress

June Schroeder, an RN and CFP, provided a list of warning signs family members, particularly those getting on in age, might display if their financial situation is not ideal. Depending on the level of financial transparency within the family, signs can be as broad as general forgetfulness or as specific as bounced checks.

Additional things to watch out for, Schroeder mentioned, include:

• Stacks of mail
• Unpaid bills
• Calls from creditors
• Difficulties in other areas of life such as depression, loss and medical changes

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Helping Without Becoming Tethered

While human instinct may be to swoop in and take care of a struggling loved one's finances, that is not always practical or wise.

Katie Adams, Investopedia contributor, suggests two avenues to take with family members who struggle financially – a hands-on approach and a more indirect approach.

Not all relationships can withstand interfamily loans or cash gifts for a variety of reasons, from pride to mismanagement, so physically taking on loved one's debt is not always an option or long-term solution. In cases such as these, helping family members set a budget or secure professional assistance can be an invaluable charity.

Adams reminds, "As always, the most important step is sitting down with your loved one and asking specifically what help they need to work their way out of their current situation." She continued, "Family members and money aren't always a good mix […] Before you commit to helping, be sure to think through what you can and can't afford to do. Remember, if your own resources are limited, there are meaningful, effective, and creative ways to help your family member(s)."

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How To Have The Talk

Whether a relationship is open or strictly guarded, communication is essential to helping those in need. The act of discussing finances can be just as stressful, if not more so, than the actual assistance family members wish to provide.

Suzann Enzian Knight, long-time finance educator for low- and middle-income families, cautions that while becoming a relative's power of attorney may happen at some point and be the "obvious solution," jumping into the role of "mother to your mother" is not prudent. "Don't take over initially," Knight said, "help [them] make critical decisions, as opposed to telling him or her what to do."

In order to ease into the conversation, often made difficult by years completely lacking in financial transparency, Knight recommends the following tactics:

• 1. Mention News Stories Or The "Someone I Know…" Approach: "Talk about your coworker's father who can't afford his prescription drugs, or a news story about an older person who owes more on a mortgage than her home is worth," Knight suggested. The goal is to get the conversation rolling.
• 2. Bring Up Bargains: Sometimes habits lead to stagnation when it comes to finances. Bargains can be found, but are often overlooked because parents may have used the same phone provider for decades, or always shopped at the same high-end grocers.
• 3. Be Curious: Without seeming nosy, ask questions. Beating around the bush is not a path that typically leads to open communication.
• 4. Reverse Psychology And Humility: Knight illustrated this point by stating, "Ask your father to join you at a financial-education workshop – to help you, not him." Pride is a powerful motivator and can break fragile relationships. Keep in mind the power dynamics within families and always be respectful.

Beyond all else, remember that respect and communication can make or break relationships, particularly when money is involved. Don't wait until the situation is too dire for recovery, talk now and talk open.

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