It may become necessary for you to step in and help your parents manage their finances at some point in life. Money can be a sensitive thing to talk about. However, you can be a knight and an armour to your parents money-woes.
We all have a positive affliction towards money and parents, but money is a sensitive thing to bring into a conversation. More so, when the people involved in the conversation are your parents who see themselves as the responsible ones in the relationship. But standing at a different juncture of life, it may be necessary for you to step in and help your parents manage their finances. You may need to follow a mild emotional strategy of confronting them in matters of money.
Parenting parents on money matters
Start with evaluating if they actually need your help. Financially independent parents may be resistant to the idea of involving you in their financial matter. If you feel that they see your involvement as an unwarranted interference, then you need to approach this with a mild emotional strategy. You can begin to extend the help by assessing if they actually need your help. Look for the signs like if they miss bill payments, forget and overlook an important aspect of a financial transaction or if they show an inability to understand financial products and avoid conversation revolving around money. That’s your cue to intervene. It may also happen that your parents may be reluctant to take your help owing to pride, then it’ prudent to sweep in the money wisdom through examples. Start telling them the big gain you made or narrate a story about how you took that much coveted European holiday.
Research and Investigate: Become a raw agent of your household
If you are financially literate, then practice talking about risk and returns with your parents early on. If you are going to be responsible for their financial well being, then it is better to talk about it in time. You can begin it by volunteering to help them ease their transactions. You can lend a hand by making it easy for them by doing the work they don’t enjoy like doing taxes or doing the compliances. You can become the star in their financial life by introducing concepts of online banking and systematic transactions to make it easier for them.
Another important aspect is to gather pertinent information related to their investments in various instruments, including equity, debt, insurances and taxes. You should maintain the details in an excel and maintain a file of important information like Aadhaar number, Permanent Account Number, details of bank accounts, insurance policies, investment accounts, property deeds, tax documents, passwords and other important details.
Change Plans according to the age
Align the investments of your parents according to their needs. The need is going to change and vary over a course of time. In the later years growth, stability and liquidity become paramount. Weed out investments that serve no purpose. Get rid of excessively risky investments and instruments detrimental to their portfolio. Same goes for insurance policies. Eliminate those which are not required and add those which are required at this age and later stage in life. A careful planning backed with persuasion is all it takes to introduce financial inclusion in the life of your parents. Do not forget to be gentle about it like the west wind flowing in the early autumn.