Helping Loved Ones Who Can No Longer Manage Their Own Finances
There comes a time in many people’s lives when they can no longer handle their day-to-day affairs, including the financial aspects of their life. Financial demands are difficult to deal with even for healthy adults, so older Americans sometimes struggle due to changes in life circumstances or health issues.
How Can I Tell if There is a Problem?
Several things may signify that your loved one is having trouble keeping up with daily financial demands. For example, take a look around your relatives home. Are there piles of unopened mail and bills scattered around? Is their filing system completely disorganized or nonexistent?
It may be helpful to take a look through bank statements and check stubs to determine whether bills are being paid consistently and on time. If your brief investigation turns up letters from collection agencies and notices of nonpayment, it may be time to step in.
Why Is This Happening?
A significant percentage of older Americans can no longer manage their money. One study suggests that as much is one-third of those over the age of 65 need help managing their finances. This need could arise from a variety of conditions or life circumstances, including:
- Mental or visual impairments
- Physical impairments
- Lack of English skills or familiarity with banking and tax procedures
- Increased vulnerability to a financial abuse and scammers
- Loss of a spouse or other loved one who handled all the finances
- Many people assume that dementia has a role in the inability to manage finances. However, this may not always be the case. Nonetheless, those with dementia often have problems carrying out these daily tasks regularly. Forgetfulness and a lack of understanding can trigger missed bills and financial turmoil.
Taking Action for Your Loved One
Hopefully your loved one will have a power of attorney in place long before he or she actually needs someone to help with finances. The individual who holds is power of attorney can carry out the loved one’s wishes regarding the financial aspects of their life. Without this document, obtaining financial information and dealing with some aspects of your loved one’s money issues could be difficult. Planning ahead and creating this estate planning tool now can address significant problems down the road.
Of course, you or another loved one can step in to help the senior deal with finances. Unfortunately, many people do not have the ability or time to devote to this process. For example, children may live on the other side of the country and unable to manage day-to-day needs effectively.
In these situations and others, it may be helpful to use local services that offer daily money management programs for seniors. These services often act as a financial assistant and can help with pain bills, balancing the checkbook, and preparing budgets. Some will even maintain financial records and negotiate with creditors on your behalf. Tax preparation assistance is also occasionally provided.