There’s a great Friends episode where Joey’s Dad is having an affair and his Mom knows about it. Joey gets really upset and thinks his Dad should end the affair and be reconciled to his wife. He confronts his Dad, and a while later his Mom comes over to yell at Joey for confronting him. Befuddled, Joey asks why. His Mom explains that she knew about it the whole time, but at least her husband had been treating her nicer because he felt guilty.
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This strange situation leads Joey to end up saying to his friends, “It’s just parents, after a certain point, you gotta let go. Even if you know better, you’ve gotta let them make their own mistakes.”
This quick line, aside from being an obvious play on words of what parents end up saying about their kids, is a critical piece of advice for children that are trying to help their parents with making wise financial decisions. Whether your parents gave you a great financial example or you thankfully fell far away from the disastrous family financial tree, they will eventually need help as they age.
This change will occur gradually, but you’ll start to pick up on it. And the emotional roller coaster you’ll be on in trying to help them make the best decision will not be easy.
How do you handle it without ruining your relationship with your family?
No one likes to talk about money, and no one likes unwanted advice. Simply talking to your parents about their finances can open up an emotional can of worms.
The key is to avoid being confrontational or telling them they are wrong. Even if they are wrong, you can catch more flies with honey than vinegar. (There are times when you need to push; we’ll talk about that in a moment.)
As they age, start to drop hints about an article you read that applies to their situation. Or ask them for advice on what you should do with your finances with a similar issue. Get the conversation going and slowly try to get them talking about what they plan to do. You never know, they may have a solid financial plan that just hasn’t been shared with you.
One of the easiest ways to help them is to work together on setting up a family financial plan without you. Getting unbiased advice from a Certified Financial Planner can soften the blow of the advice. You might bring it up with how you’re planning to go to an advisor to assess your situation and estate planning, maybe you could get a deal if they came as well?
Anyway you can convince them to get legitimate, professional, and unbiased advice is a step in the right direction. This can help keep everyone calm and your emotions in check. (Just make sure to not freak out if the advisor gives advice that you don’t 100% agree with. Remember, this was your idea.)
Trying to push your parents toward every little financial issue — in essence, micromanaging their finances for them — is likely to end up with an emotional blow up, hurt feelings, and family members not talking to each other for a while. You don’t want that.
There are going to be things that frustrate you. Little things, but still important in your eyes. Maybe your parents haven’t asked for a discount on their TV service in 6 years and are paying $50 per month too much. Or maybe they want to travel more than you think they can afford to.
But, there are some things that you need to push on. They are worth the emotional risk of fighting with your parents because of the long-term financial impact on their situation. These items include your parents having a will, power of attorney, and healthcare power of attorney so someone can make a decision in their place if necessary. I would also argue that also includes their being an overview of their finances with a professional, but expect resistance along the way. If you can at least sit down with someone for a few hours to map out what they should do with their portfolio in the long run, how much money they can afford to withdraw each year, and what insurance options they need you can keep running with the plan in the following years. Flying financially blind is difficult, and if your parents really mismanage their finances it will end up on your shoulders to either clean up the mess or assist them while they are still alive.
Talking with your family about their money is a sensitive subject, but hopefully these tips will get you thinking on ways you can begin to help. Remember, they helped you when you were growing up, and I’m sure at some point they too said “Sometimes you just have to let them make their own decisions and learn from their mistakes.”