Gently protecting them from financial problems
5 Ways to Prevent Elderly Relatives from Throwing Away Money
by Michelle Gail
5 Ways to Help Your Parents with Their Finances
Taking Over Your Parents' Finances
Helping Elderly Parents Organize Must-Have Financial Paperwork and Information
My elderly 82-year-old aunt is a very active lady with a busy lifestyle. However, she spends little time on money matters. Her lack of attention to her financial record keeping was costing her money.
After living in her detached home for over forty years, my aunt decided that the time was right to downsize. She eventually moved into a two-bedroom apartment. After she settled in, my family realized that she was regularly throwing money down the drain.
Living on her own for so many years, my aunt naturally did everything her way, and with no accounting from anyone.
Here are a few things that we discovered about my aunt's bad money habits and how we prevented a financial disaster before it was too late.
1. Be involved in decision-making.
When my aunt moved into the new apartment, she was notified by the phone company that the telephone line wouldn't be transferred for three weeks. Rather than waiting that long, she rushed to the mall and purchased a phone. She asked for a regular cell phone; the rep sold her a smartphone.
My aunt's eyesight is a bit poor, and she is not the least bit tech-savvy. So it wasn't too surprising that she couldn't figure out how to handle any of the apps or even how to dial a phone number. This smartphone was expensive and so was the monthly fee, so the phone sat unused on a table.
We gently warned her not to make any significant purchases or sign any type of documents without any us of present. Had we been with her, we would have made sure that she got a basic cell phone without any contract. The phone contract was canceled, but there were unnecessary fees associated with the cancellation.
2. Practice better money management.
When monthly bills arrived, my aunt had the tendency to leave them unopened. Of course, previous balances were carried forward and high service charges accrued.
We took charge of the bills. We also set up single and recurring payments online to have better visibility with the bills, and money was saved by avoiding late fees.
3. Help with grocery shopping and clean out the fridge.
Tidying up the kitchen one day, I noticed that my aunt had three opened loaves of bread. She bought one loaf, forgot that she bought it, and went out and purchased more bread. The original bread, now stale, had to be thrown out.
This lack of awareness didn't happen only with bread. The same was true with veggies, fruit, and most perishable items in her fridge.
My mom and I often remind my aunt what food items she has in full supply, so she doesn't buy more of the same. We often take her grocery shopping and provide input on items being purchased.
4. Discourage frequent ATM withdrawals.
My aunt enjoys walking. One of her favorite places to walk is to the ATM. She does this often, withdrawing money several times a week. She likes to have money on hand "just in case."
We encouraged my aunt to withdraw a reasonable amount of cash at one time. Making minimum withdrawals curbs overspending and cuts down on bank fees for each withdrawal.
5. Budget, budget, budget.
My aunt is still stylish at 82. She also has a flair for designer fashions, just as she had as a younger woman. But even with two closets full of clothes, plus a large trunk and several suitcases packed with more clothes, she continues to shop.
Set up a budget that your relative can stick to. Fortunately for us, we have a financial advisor in the family. He spelled out the seriousness of her situation to her and then he put her on a financial diet. He created a flexible budget that allows my aunt to "indulge" a little and still enjoy her golden years. Nonetheless, the budget is tight enough to prevent her from spending out of control.
Michelle Gail blogs about women's issues, news, and trends. She invites you to connect on Twitter @michellemgail.
Take the Next Step:
- Use this tool to maximize your retirement by determining the best age to take your Social Security benefits. Don't leave thousands on the table by taking Social Security at the wrong time.
- Subscribe to After 50 Finances. You've learned how to work smarter, not harder. This weekly newsletter is dedicated to people just like you. Subscribers get a FREE copy of our After 50 Finances Pre-Retirement Checklist, a list of everything you need to do to be ready for retirement.
- Find information geared specifically for Baby Boomers in The Dollar Stretcher section dedicated to your financial issues. If you're over 50 your financial needs are different. And so are your questions.
Share your thoughts about this article with the editor.
Baby Boomer Tools & Resources
- A tool to determine the best time to take Social Security benefits
- Get out of debt before you retire
- Get free answers to financial questions
- Get free answers to legal questions
- Retirement shortfall calculator
- Life expectancy calculator
- IRA required minimum distribution calculator
- More retirement planning calculators
Trending in Baby Boomers
- Investing retirement money that you may never need
- Financial tips when nearing retirement
- Why pay off your mortgage with a reverse mortgage loan?
- 3 ways retirees can tap into their home equity
- A realistic second career for retirees
- Things you should know before buying burial insurance
- Including travel as part of your retirement planning
- How to get an elderly parent to accept help with their finances
- This week's Readers' Tips