Talking to Your Parents About Finances with Terri Bennett and Kadri Augustin
Many clients at The Gym discuss familial finances and include them in their long-term plans.
Terri experienced this right away when she started working at The Gym. She has many clients whose parents expect them to step up as caretakers.
This became something Terri started asking about when talking to clients. Just like having a house fund, they may also set up a “mom” fund.
As a culture, we have a difficult time talking about this issue. As our parents age, we not only start to realize they are getting older, but we start realizing our own mortality.
There was an increase in clients buying gift memberships to The Gym, during the last holiday season. While facing the topic of parents and finances is scary, it can be empowering. A financial plan is empowering.
Having a gift membership and giving someone this experience is a dignified way of starting the conversation with our parents. Some of the other ways may feel uncomfortable and judgmental.
Kadri’s parents asked him to create a plan for them. He started it with his dad, because his mom was overseas. His dad gave him access to his accounts and Kadri was able to see what was going on in their bank accounts and retirement accounts. He had them open a high-yield savings account and he created a budget for them.
About five years ago, Terri found out her mom had cancer. Terri’s sister is a visiting home nurse, and Terri was very grateful for her knowledge. Her mom was not in the strongest financial position at the time, so they were thrust into the situation and they needed to make some changes.
In addition, Terri and her sister’s lives were about to change, because their mom needed more care. They all had to be open and vulnerable about their situations and hopes for their futures. They also had to decide what financial goal were going to slow down and determine and set boundaries.
When it comes to budgeting, Terri is a fan of not creating too much work for herself. Her preference is tracking expenses daily on a piece of paper when she gets home. If she doesn’t track every day, it doesn’t have the same power to help her adjust her future actions.
If it takes less than 10 seconds, it is hard for her not to track her expenses. 90% of her spending habits occur between Friday and Monday.
Kadri practices no-spend days regularly. He records his fixed expenses and he has a clear sense of what should be leftover. He checks his Mint account once a week, and his strategy is mostly to not spend money.
By tracking expenses, and watching what she spent, Terri was able to come up with $1,000 a month to help out with her mom. Her mom was incapable of living independently and she moved in with Terri’s sister. Her sister took on the housing responsibilities and Terri took on the responsibility of traveling back and forth.
They divided up the duties that felt fair to both of them. It was able to happen without resentment because they talked frankly about the situation.
Kadri helped his parents set up a plan for their future and he also set up a Will and did estate planning for himself.
It is so much easier to set everything up and plan for things before something happens than to do deal with it, along with all of the emotions and family members, after a death.
Broach the topic with your parents, when everything is going fine. Create a non-judgmental space to talk about finances, responsibility, and willingness, before anything is wrong. There will be apprehension going into it, but the takeaway will be that you did something empowering