How To Talk To Your Parents About Their Finances

Talking about money is hard. Talking to your parents about their financial situation can be even harder.

But despite the awkwardness, the sooner you start having the conversations, the better, according to Cameron Huddleston, a personal finance journalist and author of the recent book, “Mom and Dad, We Need to Talk.”

When Huddleston’s own mother was diagnosed with Alzheimer’s disease when she was 65, Huddleston said it was almost too late.

“I want people to realize that if they had these conversations before an emergency arises … before your parents need help, it’s going to make things so much easier,” she said.

After her mother’s diagnosis, Huddleston moved quickly and became her mother’s power of attorney. If her mother hadn’t named her power of attorney before her memory declined further, she wouldn’t have been considered competent enough to make that decision — which would have led to a legal nightmare, Huddleston said.

“But as I was having to step in and take over her finances, I was having to put together the pieces of the puzzle of her finances without knowing what that final picture was,” she said. “And it was really difficult.”

Money can be a taboo topic, she said, but there are steps you can take to make the conversation easier. Huddleston shared three pieces of advice.

Don’t Make The Conversations Strictly About Money

“As strange as that might sound … start by talking about big picture issues, maybe, ‘Mom and Dad what does retirement look like for you? … Do you think you’re going to stay in this house? If you ever need any sort of care, what type of care would you want?’” she said.

Be gentle in your approach and respect that they might be uncomfortable with the conversation, Huddleston said, so don’t begin by asking too direct of questions like how much money is in their bank account.

“If they do push back I want to encourage you not to give up,” she said. “If one approach doesn’t work, try something else. Don’t give up because these conversations are so important.”

Use A Story

Using a story is a great way to start the conversation naturally, Huddleston said. Maybe you have a colleague whose parent died without a will, or one whose parent died with everything in place and how helpful it was for the family members.

“You can use those examples … ‘Hey, my friend Bob, his father died recently. He didn’t have a will and it created a huge headache for the family,’” she said.

“They were grieving the loss and then they were trying to figure out who got what, and it just became a big nightmare. I want to make sure we avoid ending up in situations like that,” Huddleston continued.

Have Them Make A List Of What Bills They Pay

If an emergency were to arise, and you had to make sure their bills were getting paid, you need to know what bills they have and how they pay them, she said.

“You want to get a general sense of where they stand financially … are they relying solely on Social Security, or do they have other sources of retirement income? Are they still paying a mortgage? Do they have other types of debt?” Huddleston said.

The more information you get the better, she said. Ask your parents to create a list of every account they have, including the usernames and passwords.

“I realize that a lot of parents are going to be reluctant to just hand over that sort of information,” Huddleston said. “They might be uncomfortable telling you, but if they write it down they can put that list someplace safe and tell you how to access it and under what circumstances you can access it.”