Really worried about my parents finances

hanna_mary105

Hello,

I'm looking for some advice about how to talk to my parents about money. I'm in my mid 30s, and my parents are in their late 60s. I always thought they must be good with money as my siblings and I had a comfortable upbringing, but recently it's come to light that actually they're clueless and I'm finding it difficult to talk to them about how to sort out their situation. The trouble is they're burying their heads in the sand. Any advice on the emotional side would be appreciated, as for the money side I'm going to suggest they see a financial advisor for good advice.

Here's the background....
They own their own home, but it's very dilapidated and they have no interest in fixing the problems (e.g leaky windows) because it involves getting builders round and they think it'll be disruptive. They inherited some money about 18 months ago, and went on some big holidays. At the time I tried to ask them whether they had a good plan to make best use of the money (e.g. invest it, or at least get good interest on it) but they said they weren't interested in playing the stockmarket. More recently, I noticed some shifts in their habits, e.g. shopping at a cheaper supermarket but I thought they were getting on the frugal bandwagon!

It's since come to light that they have very little in the bank and almost no income. The money they inherited was just sitting in a low interest current account, and they've spent over 70% of it on paying off a credit card and holidays. They've just spent the rest of it on buying a property for cash, which sounds like a bit of a whim to me. They initially wanted to move in, then said they were going to let it out, and now are going back to the idea of moving in. It would be a big change for them (in another town with no parking or garden) so I don't see the move happening. But equally, they are clueless about landlord's regulations and tax implications etc. The only income they have is my dad's state pension - neither of them have ever paid into a workplace pension. My mum was ill for several years but never claimed benefits etc for 'moral reasons' apparently.

My dad recently had a health scare and admitted that he doesn't have a will. I've managed to get him to agree to get a will sorted out, and also mentioned about power of attorney but he dismissed the idea saying 'if I lose my marbles just shoot me'. I also brought up that my mum should get a will done too, but she said 'don't worry, once he's gone I plan to stick around to spend his money!'. Basically whenever I speak to them about money they make a joke of it, and I can imagine them stuck in their crumbling house while starting to fall behind with bills.

Where do I even start trying to make them take this seriously?

justme111

They done a good job in bringing you up money savvy. They do what they can now. Their money savvy days are gone. It hurts seeing our parents decline.
Once you accept it as inevitable it will be easier to deal with. Imagine that they revert in some aspects to being childlike and your attitude to them will adjust accordingly.

Serendipitious

Well, they already own their own home, so that's good.

And due to the inheritance, they now have no debt (assuming the credit card they paid off was their only one) also they've enjoyed their holidays which they probably couldn't have afforded before, and they've invested in another property.

And your dad is prepared to make a will.

So it's not a bad starting place.

Hopefully POA might be mentioned by the solicitor during the will-making. And maybe your mum will come round to the idea of making a will at some point.

As for the new property, the fact of no parking and no garden is not such a big issue once they stop driving and being able to do their own gardening. They're still relatively young, but the time will come when they can't do these things, so maybe they think the new place is more practical for their later years?

I'd say just help and advise where you can whilst still respecting their choices. And listen to their reasons, everyone has reasons for doing everything and you'll be able to help more if you can understand where they are coming from.

I'm early 60s, by the way, these are just my thoughts on it.

hanna_mary105

Thanks for the reply, that's helped me see things in a different light!

I think the state of the house, plus the recent health scare and my mum's ill health has got me a bit worried.

Pollycat

Well, they actually own 2 houses - mortgage free.
So they are in a much better position than a lot of people approaching their 70s.

I think they need to consider what they are planning to do with the houses.
move and sell the original property as it is
move and renovate the original property with the intention of either selling or renting - they may not have the funds to do this
rent out the 2nd property and use the income to do up their original property
sell the 2nd property and use the money to do up the original property

I think they need proper advice on the benefits and pitalls of the options.

hanna_mary105 wrote: »

I'm in my mid 30s, and my parents are in their late 60s.

The only income they have is my dad's state pension - neither of them have ever paid into a workplace pension.

Doesn't your Mum get state pension?

justme111

That is precisely the point op was making - they do not seem to cope with dealing with it. Human psychology is vulnerable and people often do not manage.Doing renovations and running btl is a daunting task . I have a friend who is of similar age who after buying a second house got disappointed in how much work it would require. The house stayed unoccupied for a year while he was living on a breadline. So listing what needs to be done is of little help if people do not manage to do it. They probably would not want op to run their affairs so it is a difficult situation.
I agree that there is a bright side to it - at least they have those houses mortgage free.

wapow

Why don't you propose to them of renting the 2nd home and show them some fancy power slides of the money they can make and how they can benefit from it by going on holiday again etc etc. Maybe words is not the way forward and visualisation will sink in. Add some music to it and show them the dream!


Try something different!

z1a

Can't help wondering whose interest you have in mind here, theirs or yours?

annandale

Your mum should make a will. If your dad dies first and she dies intestate it will cause problems. Not just about spending your dad's money if he dies

wapow

I bit my tongue....But glad someone said it

z1a wrote: »

Can't help wondering whose interest you have in mind here, theirs or yours?

wapow

Pollycat wrote: »

Doesn't your Mum get state pension?

Maybe was cash in hand not reg to tax.
Didn't do job seekers cos moral or maybe shame or maybe would be put back on job and didn't want the hassle
Possibly of a culture thing