Your parents have always been your heroes but the time comes when you’ve got to be there for them. To make sure they’re comfortable in their twilight years, you’d do just about anything. Then why not help them out with their finances?
New technology and remembering due dates could be a hassle for them. Here’s how you can help them out.
Managing Bank Accounts and Passwords
In the first step towards managing their finance, it is very important to know your parents’ bank account numbers and passwords. Keep a list of credits and debits in these accounts for at least one month. This will also help you keep track of the income and expenditure. Income will be in the form of pensions or interest from fixed deposits.
Knowing a password these day is an all access pass to the bank account. If your parent is not able to recollect the bank account password, try to create a new one with the consent of your parent. If your parents are Alzheimer’s or dementia patients, they may not be in a position to give you the requisite details, so try to step in before the situation worsens.
Dealing with ITRs and CAs
Don’t wait for the dreaded notice from the IT department. Filing ITR on time is important. Just go through the earlier ITRs to get a fair idea of the statements filed before the authorities concerned. You should find out the quantum of investment, amount of passive income, details of pension, etc. It’s better to take the initiative and make sure the papers are filed before the deadline.
It will also be beneficial to build a relationship with your parents’ CA. The accounting expert will also help in financial planning and sorting out financial issues. It will be easier to take care of any pending issues while working with your parents’ CA.
Investment Plan in Place
Without a proper investment plan, everything can go awry. The pensions, passive income such as rent from building, interest from bank accounts and other savings should be parked in safe zones.
While chalking out an investment plan for the aged, make sure that the risk is less and the returns are comparatively higher. The liquidity factor should also be taken into consideration. Fixed deposits, pension plans and special schemes for senior citizens are good options.
Payment of bills is another on-time must. Find out how your parents are paying their bills, such as electricity, water and telephone. If they are paying online, make sure that you activate an automatic online payment system whereby the bills are paid on time. Also, find out if there are any unwanted bills that could be weeded out. Check for any bills, like newspaper bills, that seem inflated. This could help save some money.
This could be a touchy subject to handle. The parents should decide who their legal heirs are and can take over their assets and liabilities. A clear cut picture on this front will save money and effort in the future. Estate planning mainly involves creating a will and power of attorney. It also includes documenting distribution of assets among legal heirs. The service of a lawyer can make things smoother.
Know the Ground Reality
Parents may be reluctant to disclose everything to you, especially matters relating to finance. So, start with trying to get information on whether they have enough money to take care of themselves or if they need any kind of financial assistance and be careful about how you approach the subject. They may not want you to find out if things aren’t working out for them.
It is always better to give ear to your parents’ views while taking decision on their financial matters. Give them their space and make them at ease while discussing money issues. Always keep your parents in the loop when important decisions are taken. And that should be the mantra.
In case you’ve jumped in at a time when their finances need some sorting out, read 7 Handy Tips to De-clutter Your Money Life
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