Managing Bills for an Older Loved One
Posted in Senior Health Care Tips
Staying ahead of bills and other financial obligations is a lifelong chore, but as we age, this task can become a greater burden due to medical events, cognitive changes, and the increasing complexity of budgeting on a fixed income.
The following blog covers straightforward steps you can take now to assist an older loved one manage their finances while still maintaining their independence.
Risks of Inaction
Offering to help an older loved one with their finances can be a difficult conversation for both parties, however doing so can be a critical step in preserving the long-term wellbeing of an older adult.
Failure to pay utility bills can lead to the suspension of critical services in a loved one’s home, resulting in significant health and safety risks, while unpaid credit card bills can result in major financial hardships that are difficult to get out from under without immediate action.
Checking in on your loved one
A challenge cannot be addressed if it goes unnoticed, and many seniors are reluctant to ask for help until their financial situation becomes overwhelming. Many older adults are fully capable of handling their personal finances until a significant life changing event, like the death of a spouse or serious medical event occurs.
When checking in on a loved one, consider watching out for these early warning signs:
- Does your loved one receive calls or voicemails from creditors about past-due balances?
- Do charitable organizations call to request additional donations?
- Have new “friends” appeared in your loved one’s life, asking for loans or favors?
- Is your loved one opening and reviewing their mail?
- Does your loved one receive notifications of overdue payments, or letters from collection agencies?
Cash and Checks
- Does your loved one know how much cash they have on hand? Can they locate their checkbook and is the balance being kept up-to-date?
- Is there a record of past bill payments kept in the home?
- Does your loved one keep their personal and financial documents organized for easy reference?
- Is your loved one making unusual purchases?
- Have you noticed any new, expensive items in their home?
- Are they making major investments without consulting a family member or financial planner?
If you begin to notice any of these warning signs, consider engaging your loved one in a conversation about financial planning.
Personal independence is a psychologically important part of our self-image, and an adult child offering to help their parents with “grown-up” tasks like bill paying can be a shock to many. Rather than making this conversation a confrontation, consider the following approaches:
- Ask your loved one how they provided for their family and managed finances when you were younger. This can put your loved one at ease, as it gives them an opportunity to discuss their successes and be more open to possible solutions for their current challenge.
- Present your loved one with examples of how you have prepared for the future in case something ever happens to you. Share what preparations you have made for your financial future to show that planning for financial and medical contingencies is something everyone should do, regardless of age.
- Ask your loved one what is most important to them as they age. Opening up about personal goals for independence and long-term aging gives you and your loved one targets to aim for, and ensures you are keeping their goals at the forefront of group choices.
If your loved one agrees to accept your help, you can begin working together to organize and prepare their finances for the future with the following steps.
Tip: Consider writing down your action plan and documenting all steps you take to assist your loved one. This may serve to protect you and your loved one if they have been the victim of fraud prior to your involvement or become a victim of fraud after you begin helping.
- Gather your loved one’s personal information and records, focusing on any credit card accounts, bank accounts, and savings/investment accounts. Also log any and all recurring bills (utilities, credit cards, charitable donations, rent, mortgage payments, etc.) and outstanding bills
- Collect statements and documents for all financial accounts.
- Make a schedule of when monthly bills are due.
- Begin making payments according to the schedule set.
- Visit the bank with your loved one and inventory the contents of their safe deposit box.
Arranging auto-payments for recurring bills, like utility service, phone lines, or rent, can help take the burden of bill management off of you and your loved one; however, there is a risk of over drafting or overpaying for services if this is used as a “set-and-forget” solution. Consider the following:
- When linking an account for auto-payment, consider only linking credit card accounts to these bills. This gives you more protection in the event of a faulty payment than directly pulling from a bank account.
- Set a date a few days before auto-payment to review current charges. Doing so gives you time to address any inaccuracies on a billing statement before the payment goes through.
- Monitor the credit card account being used to pay bills and ensure it is being paid off on-time to avoid interest fees.
- Consider starting with a small number of recurring bills at first, as a gradual change will make auto-payments easier to monitor and will avoid overtaxing your loved one’s credit card accounts.
Formal or Informal Assistance
For many families, helping a loved one manage their finances can be done informally with the consent of the older adult. However, access to financial information and the ability to take action without the involvement of an older loved one can be made easier and safer by securing a power of attorney.
A power of attorney agreement gives you, the “agent,” a strict scope of financial tasks you can perform on behalf of your loved one, the “principle” in the event they are unable to perform the task themselves.
The terms of a power of attorney agreement are established with the assistance of an estate planning or elder law attorney with the approval and presence of the principle. By securing this document, you and your loved one can clearly outline who is responsible for what financial tasks, circumvents any disagreements within the family about the older loved one’s financial planning and future, and avoids the lengthy, expensive process of securing guardianship of an older adult in the wake of an emergency or significant, life-changing event.
Choosing to help an older loved one with their ongoing finances can feel like a significant shift in the parent-child relationship, but after a lifetime looking after others, it is often comforting for an older adult to know that they no longer need to carry the burden of financial responsibility alone. Additionally, by removing the ongoing stress of day-to-day financial management from an older loved one, you are helping them focus on what is most important in their life and ensuring their long-term independence.
SelectCare has helped New York families manage the challenges of aging-in-place for 36 years. To learn how SelectCare’s team of home health care experts can help you or a loved one continue to live independently in their long-time homes, consider calling SelectCare today.