Does mom have enough money to maintain her current lifestyle? Tough question to ask, but one that may be necessary.

Can mom and dad continue to maintain their life style, stay in the same house? Has poor investments eroded their nest egg? After gaining their trust and they realize that you, their smartest and brightest child, are not after their money after all, now you need to ask them the tough questions. How much do they have and how are they spending it?

Are they having money problems? If dad should die would mom be all right? Help them do a net worth statement. Where are their assets and who owns the assets? Is the house jointly owned by both parents?

How much is in their IRAs. Could they take more money out of the IRAs to improve their current life style or to pay off debt? Could they downsize? Would they consider selling their home and use any extra money from the sale to help with the day-to-day living expenses.

Help them create a budget. Write down all of the income; Social Security (which by the way you want to be sure is direct deposited), pensions, retirement plan withdrawals.  Then help them figure out where they are spending their money each month. The basics first, mortgage, rent, taxes, insurance, food, electricity, phone bill, heating fuel.

Play detective here and find out where the money goes. Are they eating out frequently? Using the shopping channels as entertainment? Making donations to charities that solicit by mail? Giving money to your brother to cover his gambling debts? Are they using their credit cards to supplement their income? Can they afford the house they have lived in for the last 30 years?

How much debt do they have? According to the Federal Reserves latest numbers 32% of retirees (age 65-74) have mortgages on their primary residences!

Average household debt for those over age 65 and older rose 164%. There is increased credit card debt among our seniors and bankruptcy filings have tripled in the past 10 years. Mom & dad could be up to their ears in debt.

Often times just seeing their finances written down is enough to get someone to change their spending habits. If indeed they are in debt what resources do they have to reverse this situation? What are they willing to do to change the situation? Can you help them or get them some help? Do they need to meet with Consumer Credit Counseling?

Helping your aging parents is a process. You can’t decide to spend a weekend with your parents and get them organized and straighten out their finances. This is an ongoing process. First they need to trust you and then allow you to help them. Role reversal is very difficult. They want to be your parents; they want to be in control. Think about how you would feel if your kids ganged up on you some weekend and told you how to live your life!

Check my website www.deelee.net for worksheets you might find useful. Download and print out the Cash Flow worksheet to help with the budgeting process.