Hello friends, Andy here! We've got an excellent guest post today from Kim Curtis of Wealth Legacy Institute. As many of us have aging parents, the last thing we want for them is to struggle financially. Kim provides us with some excellent advice on how to help our parents thrive in their later years. Enjoy!

If “my parents are struggling financially” hits home with you, you’re not alone. No one wants to burden their kids with the stress of money problems—even their adult children—but it gets harder to hide as time goes on. For some, the signs may go all the way back to childhood.

I grew up in a rural farming community in upstate New York. It was the sort of town where everyone knew each other, and secrets were hard to keep. When my parents divorced in my early teens, my mother had to support three daughters with no college degree and a resume featuring fifteen years of being a stay-at-home mom. She took a job at our local high school’s cafeteria, but it didn’t quite pay enough to make ends meet.

Any child who has grasped their family’s financial struggles has a vivid and visceral memory attached to the idea. For me, it was the government-subsidized school lunches my mom applied for to help support us. I had to give a red ticket to the cafeteria cashier, and I’d do everything I could to hide it. I’d wait until the line was empty, avoid my friends, or hide the ticket under my plate. That red ticket was a sign that my family was poor, and the idea of revealing it filled me with dread.

For better or worse, those experiences shaped my relationship with money. I struggled with student debt after college, and it took years for me to break the cycle of guilt and shame I associated with financial instability. The grace of a good friend helped me start the process, and slowly, the fear and anxiety surrounding money evaporated.

It was another decade before I started working in financial services, but my early struggles taught me an important lesson. You don’t need an advanced degree in finance or an alphabet of professional certifications to have a healthy financial mindset. You simply need the willingness and courage to confront your fears, desires, and fantasies around money.

How to Help Parents Who Are Struggling Financially

Seeing your parents struggle financially is hard at any age. As an adult, though, you’re in a position to help. Whether you’ve built a career, raised a family, or done both, you’ve collected valuable life experiences. And those experiences can provide a fresh perspective and practical advice for your parents.

The role reversal of a parent receiving help rather than being a caregiver can be tough to navigate. But with grace, honesty, and the effort to make changes it can also strengthen your family bonds.

Here are eight strategies to help your parents through their financial struggles.

Normalize Open and Honest Dialogue

The most important step in helping your parents through financial struggles is communicating. Figuring out how to have “the money talk” as they age can be difficult. Even under ideal circumstances, sharing financial information creates a feeling of vulnerability. But when you add struggles or debt, it’s hard to discuss openly.

To foster honest conversation, focus on how you can help. Don’t dwell unnecessarily on past mistakes or delve too deeply into what has led to your parents’ struggles. Judgment, criticism, and condescension are the last things they need.

Instead, discuss their present situation as a springboard for building a better future. Don’t shy away from hard questions, but ask them for the sake of identifying problems and solutions. Offer suggestions and ideas, but be sure not to give orders or make demands. The goal is to offer assistance constructively, not boss your parents around.

Help Construct a Budget

The idea of not spending more than you can afford seems obvious. But it’s easy to forget about a purchase, lose track of bills, or go out for dinner without worrying about the cost.

Creating a budget is integral to getting a handle on your parents’ finances. Tally up all of their essential costs like food, then determine what’s left over each month. From there, help them allocate how they can spend their money:

• If they don’t have an emergency savings fund to cover 3-6 months of living, allocating some money each month to build one up is vital.
• Do they have any major expenditures such as surgery or home repairs coming up to consider?
• If there’s money remaining for discretionary spending, how do they want to use it?

Once a budget is in place, help them stick to it by reviewing it every month and evaluating whether it needs any changes.

Consolidate and Simplify Accounts

Many seniors have money spread across a variety of accounts. Checking, savings, 401(k)s, IRAs, pensions, and investment accounts are all common. It’s possible they even have a retirement account from an old employer that they haven’t looked at in years.

Helping your parents streamline accounts is a good way to get a better handle on their income and assets:

• If they have several retirement accounts, combine them into an account with the lowest fees. Don’t ignore the tax consequences of cashing out various account types, though.
• Move any cash savings into a high-yield savings account with a competitive interest rate.
• Review open credit cards and help them focus on using a card with the lowest interest rate. If any unused cards have yearly fees, consider canceling them. 

Investigate Government Benefits

Everyone is familiar with Social Security, the federally run retirement benefits program. What many people don’t realize is that there are many other government programs with a wide array of benefits. Depending on your parents’ age, income, health, and background, they could be eligible for any of the following:

• Medicare
• Medicaid 
• Supplemental Security Income
• Social Security Disability Insurance
• Veteran's Benefits

Additionally, most states also offer a variety of programs to make sure seniors can meet their basic needs, such as:

• Subsidized utility bills including power, water, and telephone
• Property tax reductions or exemptions
• State-run health insurance programs to supplement Medicare

Examine Insurance Plans

While many of these strategies look to cut costs directly, examining insurance is about total expenditure. Medical care costs more than ever, and it’s critical to ensure your insurance matches your needs.

Go over your parents’ health insurance and evaluate whether it’s the right fit. Would a plan with a higher monthly premium but better coverage make sense? Would Medigap coverage in addition to Medicare end up saving money? Are they eligible for Medicaid or a state-run prescription drug plan?

It’s also a good time to review other types of insurance like automobile, life, and homeowner’s and make sure all of their plans are adequate, appropriate, and up-to-date.

Consider a Housing Change

The average American spends almost 35% of their income on housing, which is the single biggest expense for most. As such, it’s a good idea to look at reducing housing costs to help save money.

For some, this could mean downsizing your home. Perhaps your parents have stayed in the family house once all of the kids moved out and find themselves with unused space. Whether they own or rent, moving to a smaller home can save on mortgage or rent costs, as well as associated costs like energy and water usage.

If your parents live in a city with a high cost of living, relocating entirely might make sense. Uprooting and moving to another city or state is a difficult process, but it can lead to huge savings.

Evaluate Food Options

Eating out can be fun, but the costs add up quickly. If your parents like to cook, helping them rein in their spending on food can even be fun. They can look at it as a chance to find fulfillment in the kitchen, and have weekly family dinners to foster quality time.

If they’re unable to shop and/or cook for themselves, look at meal delivery services. Meals on Wheels has a nationwide network of local branches, but there are similar services that might be a better fit for your parents.

Establish Limits

As much as you want to support and assist your parents, you also need to set boundaries. Most of us already have a full plate between our families and careers, and adding parental obligations can feel overwhelming. Keeping sandwich generation stress in check is critical to your well-being.

One of the most important aspects of the process is setting realistic expectations. You can offer help, but your parents will need to do their part, whether it’s sticking to a budget, following through with subsidy and aid applications, or keeping you updated on the situation. If they don’t follow through, you need to establish early on that you can’t do everything for them.

You also need to decide how much tangible assistance you can provide without risking your own family’s finances. Cosigning on a loan or contributing to bills might be helpful, but doing so can create huge problems for you later if they default.

Final Thoughts on My Parents Are Struggling Financially

Helping parents who are struggling financially is a delicate process. You want to help guide them on a path to financial stability, but you also want to respect their autonomy and not overextend yourself.

Like most things in life, this will be a journey and a learning process. There are myriad ways to reduce costs and save money, but the support of loved ones as they tackle financial struggles is invaluable.

Approach the process with love, respect, and patience, and you’ll help your parents back onto a path of financial stability for a brighter future. To get started, consider using a tool like Monarch Money to help you manage money together. When you work from the same page, you can conquer virtually any hurdle.

Are your parents struggling financially? In what ways are you trying to help them in their later years?

Please let us know in the comments below.