If you have an elderly family member with health problems, you owe them the best health care possible, and also the best financial care.
Keeping their financial matters in order usually means managing their bank and investment accounts. With the holidays already upon us – a time when seniors tend to spend more money – the timing has never been better to take a look at your elderly parents’ bank account.
Another good reason to keep on top of their finances? Fraud. The Better Business Bureau reports that about 20% of American senior citizens - approximately 7.3 million people - “have been taken advantage of financially in terms of an inappropriate investment, unreasonably high fees for financial services, or outright fraud.”
“Having a serious conversation with your elderly parents about how they are managing their money is not easy, but it is extremely important in order to help protect them from unscrupulous crooks,” said Kim States, Better Business Bureau president. “It’s extremely important to keep the lines of communication open so that you can identify suspicious spending habits, as well as educate your elder family members on recognizing the red flags of common cons.”
The role of family financial caregiver should include the following:
- Get access to key documents for checking accounts, certificates of deposit, and credit cards. Your parents or grandparents are used to telling you what to do, not the other way around, so asking for their bank documents could be a touchy issue. But a good, open conversation about your willingness to help (and the potential to save money on things like fees and overcharges should crack the ice. Another good tip: make sure to emphasize that you need the information in the case of an emergency. That scenario should bolster your case.
- Strive for balance. When you get access to a senior family member’s bank account, keep on balance only what’s needed to pay bills, and put any excess money into a CD or savings account. That can help put your elderly family member on a budget (most people spend money from their checking account – not from other bank accounts) and leave more of a financial cushion in their savings accounts.
- Look for any unusual withdrawals. Is money leaving your parent’s checking account, and it’s not clear where it’s going? This is especially important for regular monthly withdrawals, which could be going to unscrupulous businesses or charities that have duped your parent into paying for something they don’t need.
- Resist overdraft protection. Don’t let your parents or grandparents opt in to overdraft protection. Such protection allows purchases that lead to negative balances, but can lead to hefty fees and penalties.
- Long story short: Getting access to your senior family member’s bank account isn’t easy, but it is necessary. In a tough economy, scammers are everywhere. So it may be up to you to block their access to your elderly loved ones.
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