10 Tips on Financial Planning

Just as it is important to be concerned about the health and safety of the aging members of your family, it is equally as important to be concerned about their finances. Making a financial plan that anticipates serious situations along the way will protect and enhance their future. Here are 10 tips to help you create a financial plan.

1. With their help, make a list of all your parent's assets, including savings, real estate, and investments. Also list his debts, including loans, mortgages, and credit card payments.
   
   
2. Discuss his goals and priorities. Does he want to put aside money for children and grandchildren? Does he want to spend on enjoyment such as travel or a retirement home?
   
   
3. Calculate his income from social security, pensions, retirement accounts, and investments. Figure his monthly expenses, including rent or mortgage payments, food, utilities, home maintenance, property taxes, clothing, all insurance premiums, medical bills and prescriptions, auto maintenance, and entertainment.
   
   
4. Determine how much of his income goes toward their monthly expenses and how long this income will last. Then calculate whether assets need to be cashed in or sold so that your parent will fare financially.
   
   
5. Make sure your parent's insurance is adequate and that he is not paying for policies that are redundant.
   
   
6. With his help, create automatic payments from your parent's bank accounts for mortgage payments, insurance premiums, and all bills including credit cards so that payments are current and policies don't lapse.
   
   
7. Create automatic deposits for Social Security and pension checks so that all monies are sure to be deposited in the proper accounts.
   
   
8. If your parent does not have an accountant, seek free help on tax issues from various volunteer programs offered by the IRS: Tax Counseling for the Elderly, and Volunteer Income Tax Assistance. Call your local IRS office or IRS information: 1-800-829-1040.
   
   
9. If you think you need professional help, consult a financial adviser. Get several recommendations from other professionals in the field and meet with all of them to determine which one is best suited to handle your parents' affairs. Remember, you or your parent must have final approval on any plan.
   
   
10. Help your parent follow through on all the cost-cutting, money-saving measures you agree will make his future more secure. Every six months to a year review his financial situation that may be affected by his health or income.