Help! My parents are overspending
Chances are your parents taught you the value of a dollar. Is it time to return the favor?
It's been decades since your parents taught you about spending and saving, and now their behavior makes you wonder if they've forgotten everything they taught you. And yet they might see your questioning as an intrusion. What's a perplexed adult child to do?
Financial planner Keith Klein, of Turning Pointe Financial Management in Phoenix, says he's seen it before, and most changes in spending can be traced to one of two things. The happier one is a "bout of euphoria."
That often happens in early retirement, when parents have the time to re-engage, or engage at a deeper level, in an old passion. Examples would be working out more often and hiring a personal trainer, spending more on photography equipment or taking classes and buying equipment related to those.
Klein saw his own father go through such a change in spending. His mother died when she was 48; when his dad began to date, he spent a good deal more on dinner and entertainment. So a positive uptick, Klein said, is generally a result of something good, like retirement, or a negative turned into a positive, such as recovering from divorce or death of a spouse.
Other times, people who've spent their lives being frugal feel like the "someday" they've saved and sacrificed for has finally arrived. Some may be right, Klein said, but others may need to talk with a financial planner about "longevity risk." A splurge isn't a bad thing if the parent has the resources. However, adult children frequently do not have a realistic idea about their parents' finances, Klein said. It's easy to see their resources as unlimited (or to at least hope there's enough) and to want to see them enjoy life or check off one more thing on a bucket list. In truth, some older people are spending more than they can afford and are taking on debt).
When it's cause for concern
A change in spending isn't always celebratory; it can also indicate that something is amiss. It can signal depression, a gambling habit, drinking too much, or it can tip you off that a parent is being scammed. (It might be time for you to take a role in managing their finances.) It could also be a sign of dementia. Klein said in the latter case, there is frequently denial on both sides.
"I had one client who thought her husband was beginning to have issues with dementia ... she thought it had been going on for about six months. She asked friends if they had noticed a change, and they said, yeah, things had seemed different for about the past 12 to 18 months."
So when spending patterns change, Klein recommends asking their friends and neighbors, "Is there something I'm missing?" He said that what adult children want to watch for is something that seems out of character or a big change from the person's usual decision-making process. An example might be a homebody who loves to garden deciding to take a trip around the world.
Trudy Schuett, who chairs the Regional Council on Aging for Western Arizona, said it's important for adult children to find out what's driving a sudden change. If Dad buys a new car when there's no need, or Mom decides to give away a vacation cottage, that may be a sign the adult child needs to visit and spend some time figuring out what's going on. "You may feel you can't tell a parent what to do... but a child does have a responsibility to get the help (the parents) need," and to do that you may have to do a bit of detective work, Schuett said. "This is no time for concern over hurt feelings or worry on the child's part that maybe they're sticking their nose in where they don't belong," she added. "The Area Agency on Aging in the state where the parents or children reside is a good place to start for information on early symptoms of Alzheimer's or several other conditions that can cause radical changes in behavior."
Still, if a parent prefers not to discuss personal finances with you, there's not a lot you can do about it. Klein said his own father would occasionally run an investment idea past his financial-planner son, but that he did not share details of his own financial situation until he was aware that he was near the end of life. Klein said that's not at all uncommon for members of the Greatest Generation. (At the risk of painting with a really broad brush: "The Depression-era people never talked about money. The Greatest Generation were great savers but didn't talk about money. The baby boomers spent it all. And Generation Xers are more open to a dialogue," Klein said.)
Protecting your children
Schuett said one thing middle-aged adult children can do is to keep their own children from facing the same situation. "In your 50s, have a conversation with your children . . . and make sure your wishes are on paper, and that all your children understand."
Decide how comfortable you are sharing personal information with them. Is it OK for your doctors to share information? Would you want to have them to be able to monitor your bank accounts? How about checking your credit scores and credit reports with you? Someone should have power of attorney to make decisions if you are unable to do so. That sort of direction makes a tough situation easier on adult children, Schuett said. "That way, they know what you expect of them."
You can check your parents' credit scores with them by setting up accounts at Credit.com; that will give your parents two scores every month. A big change in the numbers could indicate something is amiss and should be checked further. You can also go over their credit reports with them (here's how to get their credit reports for free), to be sure the information in accurate. These steps can help detect identity theft as well as alert you to changes in spending patterns.
More from Credit.com
- The best way to lend money to friends and family
- How much debt is too much?
- Is it too late to build credit?
Don't think of your parents money as your potential windfall. Their lives are their own and end in the funeral parlor. Hopefully they spend their last dime the day they pass.
God bless the child that's got his own.
Its their money. Stop being greedy and let them do what they want with it.
Stop crying about how someone who worked all their lives won't give to their whiny crybaby greedy liberal children or grandchildren.
libs are never happy when someone has more than them even if its their own parents!!!
I think one of the things you people are missing is what if your parents need care in their advanced age? Hospitals and nursing homes charge a *lo* of money, and frankly, I do think it's your own responsibility to make sure you have money set aside for such an issue. Funerals cost a lot of money, too. My great-grandmother, bless her, she worked while sick with cancer, saved enough money to cover her medical expenses, the funeral expenses, and even bought the grandchildren Christmas gifts before she passed away. While I do think you should have fun and spend your money the way you want, I really hope that you are taking care of your remaining responsibilities and not leaving it for your children. They didn't ask to be brought into the world, they didn't ask for your burdens.
Just call me Blessed! My only 2 children, both hard-working and self-supporting, each encouraged my wife and I - on separate occasions - to spend our money enjoying our retirement and don’t think about leaving anything for them. It almost brings me to tears; especially when I look at some of the lazy, selfish ingrates some of our friends have raised.
Let me begin with I am exceptionally grateful for what my parents provided for me and do not in any way begrudge them all the happiness they deserve in their golden years and I do not expect an inheritance - by all means, ENJOY IT! However, that being said, my father has been irrationally irresponsible with his finances post retirement, living as if everyday is his last and he has no need to plan on having expenses. His moto is that he earned his retirement funds and wants to enjoy them. A boat seemed like a nice way for him to spend his time and would have been ok if it had stopped there but it didn't. Everytime we turn around there is another purchase. he is going through his savings like water and we fear a long happy retirement will not be in his future if he continues down this road. Planning only goes so far if the planning stops when the spending starts.
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