Some seniors have a hard time managing their finances as they grow older. This can make it hard for them to function independently, not to mention leave them open to being taken advantage of by someone with unscrupulous intent. Financial literacy declines with age after year 60 at the rate of 1 percent, reports NCBI. If your loved one is past this age, it could well be they need your assistance.
Here, Unified Caring Association covers the signs your loved one may need help with their finances, and the steps you could take to help them out:
5 Signs they can’t Manage their Finances Independently
Here are some easy-to-spot signs your loved one is struggling to manage their finances:
- Developing physical or memory issues: Physical decline and memory problems often correlate to a decline in financial skills.
- Making strange purchases: Has your loved one been building up credit card debt or making unusually large purchases?
- Complaints: Does your loved one keep talking about how the bills keep piling up or how they’re having trouble with making timely payments?
- Unpaid bills and unopened mail: Be on the lookout for unpaid bills or unopened mail lying around their house.
- Being taken advantage of: Has your loved one been taken advantage of by a gold digger or scammer recently?
How you could help them out
First, it’s important to assess your loved one’s state. Has their financial judgment been severely compromised? Or do they just need a helping hand now and again? Depending on the answers, here are some ways you could help out:
- Have an honest conversation: Try to have a good conversation with your loved one. See if they admit to having problems with managing finances. It may be they just need some easy financial tips from you. If they’re reporting deeper problems, try to assess the severity of the issue. Consult with a doctor and move forward accordingly.
- Help them assess their finances: If their judgment isn’t severely compromised, you could help by assessing their finances. Take stock of their financial records and documents, find unpaid bills, tally up expenses, and learn about benefits. See how you can help out directly.
- Teach them how to avoid scams: You could give them the lowdown on scams, walk them through some examples of common ones and teach them about what they should do if approached by a scammer.
- Consider asking your family for help: You can’t and likely don’t need to help your loved one out alone. You can reach out to family and friends and divvy up the financial-assistance chores amongst each other.
- Help them settle their business: If they can’t manage their finances alone anymore and they’re a business owner, it may be best to sell off the business altogether. Or you may need to find someone to run it for them.
- Consider refinancing their home: You could help your loved one refinance their home loan, which would reduce their interest rate, help them pay off the mortgage early, or pay for an emergency expense. If they’re a veteran and just have a small amount of mortgage payment left, a VA IRRRL refinances (Veteran Affairs Interest Rate Reduction Refinance Loan) might be the best option. It would allow for significantly lower rates, lower payments, and a streamlined closing process. Use the VA IRRRL calculator for the exact benefits.
- Get power of attorney: It’s a good idea to get a POA if your loved one is severely incapacitated and will likely be incapable of making major financial decisions in the future. This would allow you to make all their legal and financial decisions on their behalf.
Unless your loved one is experiencing significant difficulties with activities of daily living (ADL), they’ll likely be able to manage their finances with a helping hand from you now and again. If ADLs are a challenge, says Heritage Creek, then they may need a live-in nurse, assisted living, or a stay in a hospital to allow for healing.