How to Help Your Financially Struggling Parents

Despite the best plans, your parents may find themselves with significant money challenges. Of course, you want to help them out, but how can you help your financially struggling parents without hurting your financial health? Below are five steps you can take to help your parents financially.

1. Protect Your Finances

Whatever help you provide your parents will be short-lived if you end up hurting your finances. Begin by examining your money situation.

  • How much flexibility do you have in your budget?
  • Have you met your emergency and retirement savings goals?
  • Can you help your parents and still meet your debt obligations?

If you have siblings, call a family meeting to determine who can contribute and how much.

2. Talk To Your Parents

Before jumping in to help your parents, you need a clear picture of their financial situation.

  • How much flexibility do you have in your budget?
  • Have you met your emergency and retirement savings goals?
  • Can you help your parents and still meet your debt obligations?

Your parents may be reluctant to open up their financial life or be embarrassed that they are struggling financially. Let them know that, unlike previous generations, many seniors are financially struggling today.

You’ll want to set the mood for a warm and loving conversation, broken into small bites if necessary. Be careful not to be judgmental when asking for the information you need. Instead, be sympathetic and empathetic to your parents.

Identify why they are struggling—were they hit with emergency expenses, medical bills, or forgotten to pay their bills?

Once you have a clear picture of their financial situation, you’ll know where to begin.

3. Be Sure They Have Health Insurance

If your parents are over the age of 65, they’re entitled to Medicare. If they’re not enrolled, help them fill out the paperwork to get set up as soon as possible. Medical expenses will only worsen the situation, so you want to set up a shield against this as quickly as possible.

Most likely, basic Medicare will not be enough to protect them from all the medical expenses they may experience. So, you’ll want to look into supplemental programs such as Medicare Advantage, which covers prescription drugs and hospital visits.

4. Look Into Co-Housing

If they don’t own their home, one way to help your financially struggling parents is to consider a co-housing arrangement. Assuming you own your home, you could add a parents’ suite or convert under-utilized space within your home. Your parents may not want to move in with you, so talk about it as a short-term solution until they get back on their feet.

5. Take On the Job of Paying Their Bills

You might want to take over the job of paying your parents’ bills rather than giving them the cash to cover them. Alternatively, set up their bills for automatic pay. Finally, if they’ve fallen behind with their bill payment, reach out to the creditors. Explain the situation and see if you can negotiate new terms or some forgiveness on the outstanding debt.

Bottom Line

It’s not an easy task to help your financially struggling parents. There are many considerations and potential pitfalls.

  • Be realistic about what you can do without hurting your financial health.
  • If you decide to supplement your parents’ income or pay their bills, you’ll want first to streamline your monthly budget. Then, look for ways to save money, so you have more room in your cash flow without dipping into your savings accounts.
  • It might be a good idea to include a financial planner in your conversations or consult with professionals to help you determine the best medical insurance plans for them.
  • Ultimately, you might learn that your parents just need to update their financial management skills. You can use this as an opportunity to grow closer together.