It can be hard to overstate how important our parents our in our lives. They are the guiding sail through some of life’s biggest obstacles; they are there for us when we fall, and proud of us when we pick ourselves back up again. When it’s time for us to start our own families, they are there to provide love and support all over again.
But there comes a time when that love and support needs repaying. Old age comes for us all, and, while it can be tough watching our parents come to struggle with the trappings of growing old, it can also be an opportunity to genuinely help – to return the love.
This is particularly important when it comes to the ugly world of finance. Financial planning is difficult at the best of times, but can be particularly confusing to elderly parents with little experience of new-fangled things like app-based banking and cyber scams. With this in mind, here is a simple way of approaching the management of your parents’ finances, to keep them safe and secure in their later life.
The guiding principle behind any financial plan should always be a budget. With a comprehensive budget, you can examine your parents’ existing income and investments, and chart a course for their future that doesn’t endanger their savings or quality of life.
This is an especially important step in the current economic climate, with rampant inflation impacting the real-terms value of savings significantly. As such, finding the right way to protect that value is crucial to ensure your parents remain financially comfortable.
A key way to do this is through the identification of opportunities for further investment, or for access to money in the short term. This is something you should manage directly, as your parents may not fully grasp the opportunities laid out before them – and may make an unwise financial decision without your oversight.
One such decision might relate to accessing money. If there are cashflow concerns, you may want to seek ways for them to access money they’ve already invested; you could help them with an equity release mortgage to release funds from the value of their house, which would only be repaid on the sale of their home after a move to long-term care.
Safety from Fraud
One of the major reasons you should seek to have final say over their financial decisions is the prevalence of fraud. Fraudsters and cyber-criminals are not sophisticated thieves with hi-tech means of entry into savings accounts and funds; rather, they prey on the vulnerable by offering fraudulent products, or gaining their personal information fraudulently.
As a younger, more internet-conscious person, you are in a stronger position to recognise a scam for what it is. In this way, you can protect your parents’ money from misappropriation.