Budgeting for Seniors: Read This Before Trying to Help Your Loved One with Their Finances


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Handling finances can be a hassle no matter what your age. Keeping track of bills, preparing taxes, and balancing checkbooks isn’t anyone’s idea of a good time (unless maybe you’re an accountant!). But as we grow older, these tasks become even more difficult.
First of all, there are certain physical limitations that make dealing with paperwork difficult. Poor eyesight can prevent the elderly from seeing numbers and figures – or seeing them correctly. Arthritis can make it difficult to hold pens, seal envelopes, and file forms.
Second, for seniors with mental limitations such as Alzheimer’s, or even those who are just mildly confused, keeping track of finances can be an insurmountable task. In addition, banking rules frequently change, tax codes are updated every year, and insurance billing policies can be switched at a moment’s notice. No wonder seniors have such a tough time managing their money!

But there are things you can do to make things easier, especially when it comes to budgeting for seniors.

Budgeting for seniors: the do’s

Do set a budget. If your senior is like most, they’re on a fixed income. This may be a combination of savings, Social Security, and any pension or retirement funds they have. But wherever their money is coming from, earning more is generally not an option, unless they are in good health and can still work. This is why creating a budget for them is so important.
Budget for big and small. Instead of having your loved one write checks every month and hoping things balance out, set a budget for individual items, which then add up to the overall budget. These can be things like housing, utilities, food, and other necessities. If there are funds left over, offer the senior the option of putting them into a “mad money” budget, which can include fun items or gifts for loved ones.
Budget for the present – and the future. Every budget needs to include some room for emergencies, and this is probably even truer for seniors. As they grow older, medical emergencies can become more frequent, complicated, and expensive. And, unfortunately, during the very late stages of our lives, they become the norm more often than the exception. Make sure you’re prepared to have the budget you set today grow larger in the future, or consider investing in additional protection for your loved one, like long-term care insurance.

Budgeting for seniors: the don’ts

Don’t let the senior fall for scams. Many seniors are kindhearted, often mailing checks to charities that solicit them by mail. However, often these “charities” are no more than scams. If your senior does wish to donate, ask that they speak with you first, and you’ll find a legitimate charity worthy of their generosity.
Don’t forget to include your senior in the budgeting process. It’s easy to forget that you’re handling the senior’s finances and not your own. And indeed, it can be time-consuming to work with the senior, and not simply tell them “this is how it’s going to be.” But it’s the senior’s money and life, so if they are mentally capable, they should have a great deal of input in the process. You may not agree with every decision they make, but as long as you inform them of the possible consequences, they have a right to self-determination when it comes to finances.
Don’t make things too complicated. Your senior may not need fancy spreadsheets, bloated computer programs, or complex ways of keeping track of money. If you want to use these things yourself to do their finances, by all means, go ahead. But to avoid overwhelming your senior, make sure the heavy lifting is done by the time things reach their desk.

Budgeting for seniors is an investment in their future

Many seniors balk at the idea of setting a budget, and who can blame them? It’s not exactly the most glamorous pastime. But by stressing the importance of solid money management, you can make your loved one see the positive impact a budget can have. Review the budget together every few months, or as needed, and money will be one less thing for you both to stress about!
If you are unsure of how to best help an aging loved one, the trained and compassionate staff at the Institute on Aging is here to help you make that decision and gain the best in at-home senior care. Contact us to find out more.

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