How Can I Help My Parent Manage Her Financial Information?
The job of caring for elder relatives often includes helping them with their finances in some fashion, from checking that bills get paid or the tax returns get filed, to taking over the financial management completely. For many elders, being able to take care of their own finances is an important symbol of independence and self-worth and you may meet some degree of resistance when you try to help.If you wait until the elder becomes incapacitated to broach the subject of financial paperwork, the elder won't be of much help, and locating important documents can be a much more difficult process.Here are some strategies to help your elder organize and manage financial information:
Use a filing systemIf your elder has a good system for keeping her bills in order, ask her to show it to you so you are familiar with it. If she doesn't already have one, you can create a computer-based system using a program such as Quicken, or you can create a simple paper filing system. For a paper system, you can use a large, collapsible manila file, label a set of manila folders from A to Z, then place them in the file. When a bill is paid, the statement can be filed in the appropriate folder, such as "E" for electricity, and "T" for telephone. At the end of each month or at the end of the year, it will be much easier to match these statements with your elder's checkbook. Ask her to keep her canceled checks and monthly checking account statements in the filing system. These are necessary to track direct deposits and some income tax deductions, such as charitable contributions or medical expenses.
Do an Annual Review At the end of the year, help your elder make a list of all investments and sources of income: pension funds, stocks, bonds, annuities, rental property, etc. Each of these will generate financial information that must be reported on state and federal income tax forms. If you have a master list that is updated at the end of each year, you'll know what to look for the following year.
Keep Track of DeadlinesSet up a "tickler file" to remind your elder when a tax deadline or other important deadline is approaching. April 15 is the deadline for federal income taxes, but many seniors also must pay quarterly estimated taxes, which are due on April 15, June 15, September 15, and January 15. Ask your elder for a copy of their estimate tax coupons or a duplicate of Declaration of Estimated Tax.
If Your Relative Refuses Your HelpIf the elder refuses your efforts to help, you may want to ask her to sit down with you once a month to review her bills, just so you can become familiar with the routine in case you need to do it for her one day. Many utility companies will allow you to be listed as an emergency contact if the bill has gone so far past due that the service is in danger of being discontinued. Many institutions will allow your relative to request that you receive duplicate statements or that you be allowed to access information about your relative's account.Although helping your elder manage their financial information may be a lot of work, it may be necessary to protect her from costly mistakes or from those people that might take advantage of her. And having a handle on her affairs today will make things a lot easier for you or other family members when she's no longer able to explain things to you or help you find important documents.
Written by Jon Beyrer, CFP, EA, and Vice President of Financial Planning at Blankinship & Foster, LLC, and a member of the Financial Planning Association and National Association of Personal Financial Advisors. Image courtesy of adamr at FreeDigitalPhotos.net
