It is one of the scariest money conversations you can have. Here's how to start it.
It isn't easy, but it is often necessary.
Hi there, my friend.
Talking about money with your aging parents is not fun. Even when it goes perfectly, it is hard on so many levels. It often just feels like an unnatural turn, like you’re parenting your parents. Weird, right?
Here’s the thing, though…
It may be difficult.
It may be emotional.
It may be complicated.
It may be downright terrifying.
But it is important.
Whether your parents are swimming in cash or drowning in bills, it is vital for you to have at least a basic understanding of their financial situation. The unfortunate reality is that you can’t make a meaningful plan for your own future without taking your parents’ finances into account, at least to some degree. That’s because data shows that about half of Americans financially support their parents or expect to do so someday.
My friend Beth Pinsker — columnist at Marketwatch and author of “My Mother’s Money: A Guide To Financial Caregiving” — talked about this in a post here a few months ago. The post is a must-read, as is her book, for anyone who thinks they’ll end up as a financial caregiver.
My wife and I began the awkward process of talking to our parents about money many years ago, and it has proven to be one of the best things we’ve done. We’ve lost three of our four parents in the last five-plus years, and having an understanding of their financial situation didn’t just make their final years easier — it made managing their finances far easier after they passed.
How do you start?
As Beth did, I could talk for hours and write volumes about the process of managing my parents’ money. In my book, “Ask Questions, Save Money, Make More: How To Take Control Of Your Financial Life,” I devote an entire chapter just to starting the conversation with them. The chapter even includes tips on how to speak to your siblings about the need for this chat long before you ever talk to Mom or Dad, as well as what to say if your parents tell you that their finances are none of your business. (It happens, believe me.)
In the post, I wanted to share some indirect ways to get a conversation started about money with your parents. Much like that first conversation with a romantic partner, that first conversation shouldn’t be about swapping passwords, disclosing balances and building spreadsheets. It is primarily about getting a sense, even just broadly, of their views about their finances.
Keep it relaxed. Keep it conversational. You might even be able to make it a little fun.
For example, you could start with some party game questions:
“What’s your idea of a perfect retirement?”
“If you could live anywhere, where would you choose?”
“What’s the best or worst piece of money advice that you’ve ever gotten?”
“If you could do one job for the rest of your life, what would it be?”
These types of questions can lead to some entertaining conversations that can also be quite revealing without the speaker realizing it. They can give you some insight into what your parents are thinking about their golden years without asking them directly. From there, you can try to ask some follow-up questions that further clarify things without coming off as an interrogation or you can either store that knowledge away for a bigger conversation on another day.
You could also take a more serious, though still indirect, approach. For example:
You could leverage your own experience: “An article I read said that most people don’t have enough money saved for retirement, which is scary. I’m nervous about that for myself. How are you feeling about your own savings?”
You could also leverage someone else’s experience: “A coworker told me that her parents had to sell their home because they burned through their retirement so quickly. How do you feel about your savings?”
No matter your approach, remember that your initial conversation doesn’t have to result in anything or lead anywhere. It is just a tiny but important first step in what will — eventually, hopefully — be an ongoing conversation about money that will ultimately make everyone’s life easier.
Ever talked to your parents about their money?
It isn’t easy, but it is necessary. Vote in the poll below and then share your own personal experience in the comments below.
Until next time!
Matt