January 16, 2009
In many families, personal financial details aren't always shared freely, especially between generations. But if you're not familiar with your parents' financial situation, you may be doing them – and yourself – a disservice.
Even with parents currently in good health, it's wise to become familiar with their financial, medical and legal recordkeeping so you'll be able to step in and help out if needed. You may have to walk a fine line between appearing nosey or controlling and not spotting warning signals that something may be amiss.
When you visit your folks, keep an eye out for:
Don't be afraid to initiate conversations about your parents' finances. While it might be awkward at first, you may in fact put their minds at ease by showing that you're looking out for their best interests. A good way to raise the subject is to ask their advice about your own situation. For example, bring up concerns about your own retirement planning then ask if they have adequate savings themselves.
Organize. One of the biggest problems people of all ages have with their finances is getting organized. Offer to help your parents create, and periodically update, files containing:
Budget. Chances are, your parents' medical, insurance, food and other inflation-impacted bills have risen faster than their income – and recent stock market downturns certainly haven't helped. Your parents need to know exactly how much money is coming in every month and how much is going out. If they don't already have a detailed budget, offer to help create one.
For tips on creating a budget, visit Practical Money Skills for Life, Visa Inc.'s free personal financial management site (www.practicalmoneyskills.com/budgeting). It features My Budget Planner, a comprehensive interactive calculator, as well as many other budgeting tools and tips.
Consult an expert. A financial planner can help you and your parents understand the many tax, income and expense implications of retirement. If they don't already have a planner, www.plannersearch.org is a good place to start your search.
Take care of these financial planning details now, so that when your parents need your help, you’ll be able to give them your full attention.
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