Watching your parents grow older can bring changes for the whole family. Their health, independence and lifestyle may begin to look different, and over time, the way they manage their finances can change too.
You might notice bills being missed, paperwork starting to pile up or spending habits that seem out of character. Perhaps they’re finding online banking difficult to navigate or they’ve become unsure about financial decisions they once managed confidently.
An occasional mistake doesn’t necessarily mean there’s a problem. But if you begin noticing a pattern of changes, it may be a good opportunity to check in and see whether they need some additional support.
There can be many reasons why managing money becomes more challenging as we get older. Changes in health, memory, technology, living arrangements or the loss of a partner who previously looked after the household finances can all play a part.
Recognising the signs early can help families start important conversations, put the right support in place and give everyone greater confidence about the years ahead.
Changes in spending or unfamiliar transactions
If you have an appropriate opportunity to look through your parent’s accounts together, you may notice transactions they don’t recognise or changes in their usual spending patterns.
An unfamiliar transaction could have a perfectly reasonable explanation, but it can also be worth investigating, particularly if there are multiple transactions or your parent doesn’t remember making them.
Changes in spending can also be something to look out for. Someone who has traditionally been careful with their money may begin making unusual purchases, withdrawing larger amounts of cash or giving money away unexpectedly.
Rather than questioning their decisions, approach the conversation with curiosity and support. Offering to look through their accounts together can provide another set of eyes and help identify anything that may need further investigation.
Bills or paperwork starting to pile up
Managing bills, insurance, banking, superannuation and other financial paperwork can become overwhelming, particularly if circumstances or health needs have changed.
You might notice unopened mail accumulating, bills being paid late or important paperwork becoming difficult to locate.
There may be some simple ways to make things easier. Setting up appropriate direct debits, consolidating paperwork and creating a clear system for important financial documents can reduce some of the day-to-day administration.
It may also be a good opportunity to make sure key information is organised and accessible should your parent need assistance managing their affairs in the future.
Knowing who their accountant, financial adviser and solicitor are, where important documents are kept and what arrangements they already have in place can make a significant difference if circumstances change unexpectedly.
Becoming more vulnerable to scams
Scams are becoming increasingly sophisticated and can affect people of all ages.
However, older Australians can be particularly attractive targets for scammers because they may have accumulated savings, investments or other assets over their lifetime.
Some warning signs might include payments to unfamiliar people or organisations, unexpected requests to purchase gift cards or cryptocurrency, or a new relationship involving requests for financial assistance.
Common approaches can include:
- Text messages pretending to be from a bank, delivery company or other familiar organisation
- Phone calls from someone claiming to represent a government agency or technical support service
- Investment opportunities promising unusually high or guaranteed returns
- Messages from someone pretending to be a family member who urgently needs money
- Online relationships where requests for financial assistance begin to emerge.
It’s important to remember that being caught by a scam isn’t necessarily a reflection of someone’s financial knowledge. Scammers can be extremely convincing and often deliberately create a sense of urgency, trust or fear.
Encourage your parents to pause if something doesn’t feel right and independently verify who they’re dealing with using contact details they know are legitimate.
Even a quick conversation with someone they trust before transferring money or providing personal information can provide an important second opinion.
Changes to important legal or financial arrangements
As circumstances change, it’s normal for people to review their will, Enduring Power of Attorney, beneficiaries and other financial or legal arrangements.
What may warrant closer attention is a significant or unexpected change that seems out of character, particularly where another person is applying pressure or stands to benefit substantially from the decision.
If you have concerns, approaching the situation sensitively is important. Your parent should continue to have independence and control over their own financial decisions for as long as they have the capacity to make them.
Independent professional advice can also provide reassurance that their wishes are understood and appropriate safeguards are in place.
Depending on the changes being considered, this could involve speaking with their solicitor, accountant or financial adviser.
Starting the conversation before it’s needed
Talking to your parents about money can feel uncomfortable, particularly when they have independently managed their finances for decades.
But you don’t necessarily need to wait until there’s a problem.
Having conversations earlier about where important documents are kept, who their trusted advisers are, what plans they have in place and who they would like involved if they ever need help can make things much easier later.
It can also be an opportunity to look at the bigger picture.
Are their retirement savings and income continuing to support the lifestyle they want? Are their investments still appropriate for their circumstances? Is their superannuation structured appropriately? Have their estate planning arrangements been reviewed recently? And are they financially prepared if their health or care needs change?
If aged care becomes part of the conversation, there can be additional financial considerations to work through. Seeking aged care financial advice can help your family understand the costs of care, government entitlements, the impact on income and assets, and decisions around the family home.
Thinking about these things before care is urgently needed can give your parents and family more time to understand the options and make considered decisions together.
Helping your parents plan ahead with confidence
Supporting your parents financially doesn’t have to mean taking control of their money.
Often, it’s about helping them stay informed, organised and confident in the decisions they’re making, while making sure the right people and plans are in place should they need additional support later.
At LBW Business + Wealth Advisors, our financial advisers work with individuals and families through retirement and different stages of later-life planning.
Our Geelong-based Wealth team can help review existing financial arrangements, retirement income, superannuation and investments, while providing aged care financial advice to help families understand the financial considerations that can arise as care needs change.
This may include understanding aged care costs, considering the impact on assets and income, assessing government and Age Pension implications, and working through options for the family home. Where appropriate, we can also work alongside your family’s accountant, solicitor and other professional advisers.
Every family’s circumstances are different, so the aim is to provide clear advice that considers both immediate needs and the longer-term financial position.
Frequently Asked Questions
How can I help my ageing parents manage their finances?
Start with an open and respectful conversation about whether there are any areas where they would like some support. This could be as simple as helping organise bills and important documents or sitting down together to understand what financial and legal arrangements they already have in place.
If their finances are more complex, it may also be helpful to involve their accountant, solicitor or financial adviser. The goal should be to support your parents while respecting their independence and involvement in their own financial decisions.
When should I talk to my parents about their finances?
Ideally, before there is an immediate need.
Having these conversations while your parents are confidently managing their own affairs gives everyone more time to understand their wishes, organise important information and make considered decisions about the future.
It can also create an opportunity to review their retirement plans and make sure their current financial arrangements continue to reflect their needs and goals.
When should we seek aged care financial advice?
You don’t necessarily need to wait until care is urgently needed. Seeking aged care financial advice earlier can give your parents and family more time to understand the financial implications of changing care needs and consider the available options.
Depending on your parents’ circumstances, this may include reviewing retirement income, superannuation and investments, understanding aged care costs and government entitlements, and considering the impact on assets and the family home.
LBW’s Geelong-based Wealth team can work with your parents and, where appropriate, other members of the family to provide clear, considered advice based on their individual circumstances.
