As our parents age, they become more susceptible to ailments and diseases that can impair both their cognitive abilities and motor function. As everyday activities become harder for aging parents, their financial stability can begin to waver. In fact, beginning at age 60, studies have shown that people may begin experiencing a decrease in their financial literacy score by one point per year.1 Whether your parents are displaying signs of impairment or you’re worried they simply can’t keep up with their finances any longer, we have six signs below that could help you determine whether or not it’s time to step in.
Sign #1: Everyday Activities Are Becoming Cumbersome
What we take for granted every day can often become a hassle and a chore for those who are aging. Activities of Daily Living (ADL) are defined as the self-care tasks we do every day, such as going to the bathroom, brushing our teeth, walking from one place to another and preparing meals.2 As you age or experience a cognitive and physical decline, these ADLs can become harder and harder to do on your own.
Take special care to notice how your parents are handling these ADLs. If you start to see a lack of self-care or if they’re experiencing difficulties they hadn’t had before, this could be a sign that something is starting to go wrong. And when basic needs become hard to do, things like money management can get challenging as well.
Sign #2: Credit Card Debt Is Reported
If you are able to, pay close attention to new or unrecognized phone numbers calling your parents’ house often, and try to listen to the answering machine when you can. If a credit card bill isn’t paid, debt collectors will begin calling often and persistently. While your parents may not tell you or even know they’re late on a payment, paying attention to who's calling the house will. If you have access to view their credit score, check it regularly or set up alerts for sudden drops in their score. While it may be nothing alarming, a sharp decline in their credit score could be an alert to missed bills or forgotten payments.
Sign #3: Unusual Spending Habits Form
Think about how your parents saved and spent as you were growing up. Were they fairly frugal? Maybe they paid their credit cards off every month and clipped coupons regularly? Use this assessment as a baseline for monitoring your parent’s spending habits as they age. One tell-tale sign that aging parents are suffering from cognitive impairment is a sudden large or unusual purchase. Big splurges, especially on things that don’t fit into their lifestyle or gifts for others, can be red flags for financial instability. Because as aging parents lose rationale, their money management skills can suffer.
Sign #4: Scammers Are Reaching Them
According to the FBI, these are a few reasons why senior citizens are the most targeted demographic for scammers:
They’re financially stable with a nest egg, likely own their home and typically have good or excellent credit scores.
Growing up between the 1930’s and 1950’s, they were raised to be polite and trusting of others. This makes it hard for them to say “no” to con artists.
Senior citizens may not report the fraud because they’re ashamed, worried their relatives will think they need help or they just don’t know who to report it to.
Con artists count on their victims realizing they’ve been scammed weeks or months after it happens. With elder victims, it can be hard for them to remember what the scammer sounded or looked like, especially when so much time has passed.
They’re especially interested in buying products promising health benefits like improved cognitive function, anti-cancer properties, etc.3
In addition to the reasons above, senior citizens are generally more likely to answer their phones than their children or grandchildren are — especially if they are alone often or live further away from their family and loved ones. In addition to watching out for any “too good to be true” offers your parents may think they’ve stumbled upon, keep an eye on their mail and emails for sweepstakes entries or offers for free vacations. As their judgment begins to lapse, these types of offers can become appealing.
Sign #5: They’re Becoming Housebound
Your aging parents may either be embarrassed or unaware that their mental or physical decline means they’re leaving the house less often. If a parent is becoming housebound, they may not be depositing checks into their account or paying their bills on time. Additionally, more time alone at home could make them susceptible to impulse buying online or through shopping networks they watch on TV. As you visit your parents, keep an eye out for unopened bills, undeposited checks lying around and a larger influx of packages. This could be a sign that they’re leaving the house less often.
Sign #6: Complaints About Money
Being stressed or worried about money isn’t unusual in America. But if your previously financially sound parents begin mentioning money problems, you may want to listen up. While some may outright ask their children for money, others may be too shy or ashamed to do so. Instead, parents may bring up their money issues with you in more of a conversational tone instead of admitting to any financial instability or troubles. If this is something you and your parents haven’t typically discussed in the past, it could be a sign that they’re starting to struggle.
As our parents age, it’s natural to worry and wonder about their health. But looking early on for financial troubles as well could save you and your family from hassle and headaches later down the road. If you’re unsure or becoming suspicious that things may be slipping, it could be time to sit down with your parents and have an honest conversation together about their finances.
Beacon Hill Private Wealth is an independent, fee-only, fiduciary investment advisor providing evidence-based wealth planning solutions that simplify our clients' financial lives. Founder Tom Geoghegan, CFP®, MBA is also a member of the National Association of Personal Financial Advisors (NAPFA).
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