Are you in the sandwich generation? Those in the sandwich generation are caring for their own children while also assisting aging parents. This can be a financial stress on you, so it's important that you figure out a plan that helps both your parents and yourself. As with most important financial and personal situations, it’s essential that you and your spouse be in agreement with how to assist your parents with money management.
Analyzing your parents' financial situation
When helping aging parents with their finances, the first step is to understand exactly what their current financial situation is. This discussion is easier if your parents live close to you, but regardless of their residence, talk to them about their finances in person. Understand what bills your parents currently have and whether they are being paid on time, as well as what their savings and revenues are. If everything is in order and your parents aren’t overwhelmed taking care of things on their own, then you probably only need to check on them periodically.
However, if your parents are having financial difficulties, it’s in your family’s best interest to identify the problem and work toward a solution. Determine if the problem is with cash flow, or with the work required to actually pay the bills. These are two very different problems, with very different solutions.
When the problem is lacking the financial means
If your parents do not have the financial means to cover their bills, you’ll have to consider some options, such as selling their home or taking out a reverse mortgage. There is also some financial assistance for seniors available. The National Council on Aging has set up a Web site that offers information on benefits available to seniors. Look into all options before choosing the one that’s best for your family.
When the problem is the work required to pay the bills
Your parents may have the financial means to cover their bills, but could have difficulty with the amount of organization and work required to pay their bills and manage their investments appropriately. In that case, you or another family member may want to consider taking over bill payments. You could set up automatic bill pay for most of the bills, and manually pay the others. For financial advice, consider hiring a personal financial planner.
Regardless of the current situation and solution, you or another family member need to continually assess your parents’ financial standing, as it could change even in a short period of time. Keeping the lines of communication open is the best way to ensure you help manage their situation, and avoid any financial penalties from late payments.