Older adults are often vulnerable to financial abuse and scams. Memory difficulties and dementia can also make managing finances more challenging with age. Getting finances organized for older adults can make it easier to track the funds to prevent financial problems or for a trusted loved one to help manage money. Explore steps to help with organizing finances for older adults.
To get organized, you need all account and balance information for each financial account and record. Gather documents for all types of finances, including:
If you have access to the bank statements, you can look back several months to see the payments that came out of the account. This can help you track down all the financial information you need.
You'll also want to document all the account numbers and login information. This gives you easy access to the accounts, either online or by calling the company. Keeping this information in a safe place prevents it from being compromised while also keeping it easily accessible.
If you don't already have a written budget, use the financial statements to create one. Calculate the total amount coming in each month, as well as when that money is received. List all monthly expenses, including the amount and the due date. If you receive income more than once per month, decide which bills will be paid each time. The remaining money can go toward discretionary spending. Monitor your spending each month to make sure you're sticking with the budget. You might have to make some adjustments or get more strict with your spending habits.
You also need an organizational system for all your financial documents. A filing cabinet works well for general financial documents. Create separate file folders for each type of document and account to keep things organized. As you receive new documents, add them to the files. Some people prefer to use binders for their financial statements. You might also need a safe deposit box for important documents and assets.
Financial apps and software make it easier to track your money. Budgeting apps help you track your expenses and payments with easy access from anywhere. This cuts down on paperwork because the records are digital. You can often connect your credit cards and bank accounts with the apps to automatically import data to keep accurate financial records.
Financial professionals can help you get your finances under control and make financial decisions for your future. A financial planner can look at your finances, help you organize them and help you with investments. You might also need an attorney to help you protect your finances in the future with a durable power of attorney, will or trust. Elder law attorneys can advise you on common financial issues that arise as you age, and they can help you create legal solutions to protect yourself.
As you get older, your financial situation might change often. Consider the changes that might be coming and consider how they'll affect your finances. For example, if you're planning to move to an assisted living community soon, your housing expenses will change and you might have to budget for moving expenses. If you're eligible for Social Security soon, you might have an increase in your income.
It's common for older adults to reach a point where they can't handle their finances on their own. Knowing when the time is right can help avoid financial losses. Some signs include:
It's never easy to discuss taking over a loved one's finances, but it might be necessary if your family member can't handle their finances on their own. You can start by helping them organize their finances. If you feel like they need more support, discuss your concerns while keeping in mind that giving up their financial control can be emotional.
Offer options for helping without taking over their finances completely. You might help set up a budget and automatic payments for recurring bills, for example. Having your name added to major accounts can also give you access to information while still allowing the person to have control of their finances.
Your older loved one might need even more financial support. There are legal options that can give you more authority over their finances. A durable power of attorney can give you control over decisions related to property and finances if your loved one is incapacitated and can't handle their finances. There is also a separate durable power of attorney for health care, which lets you make decisions about the person's medical care if they can't make those decisions on their own.