One of the most difficult — but necessary — talks you may have in your lifetime is speaking with your parents about finances. Often, emotions rise to the surface, making the situation stressful. But the truth for many is that there comes a time at which you may have to help manage your parents’ financial affairs. And with the right approach, “the talk” could help ease everyone’s concerns and leave your parents confident in their well-being. In this article, we’ll cover 10 things you need to know about how to talk to your parents about money and the future.

How to talk to your parents about their money

There are two main things to consider when talking to your parents about their finances: the personal and the practical. Both are important to help your parents make sound financial decisions.

The personal

Many people avoid having the “money talk” with their parents, and that’s no surprise. It’s a delicate topic. Perhaps you or a family member have tried to approach your parents about it (maybe more than once) only to be met with resistance. That’s not uncommon. Look at it from your parent’s point of view: Who enjoys being told they’re not competent enough to do something? Especially if they’ve been doing it successfully for decades?

But you may be noticing that to your parents, finances are no longer a top priority. And you’re inclined to want to help them steer clear of trouble — especially while they’re in good health and mentally competent.

A gentle approach might yield the best outcome, and here are some ideas to help you frame the talk with your parents about their financial matters:

  • Talk with your siblings first and make sure everyone’s on the same page. Then make an appointment with your parents. Coordinate efforts and approach things as a team. If your parents resist discussing money matters with you – maybe they feel like it’s none of your business — explain how one day, it probably will be your business. And without knowing their financial wishes, you might not be able to help them — and you feel you owe it to them to make sure their wishes are kept in mind.
  • When discussing money matters with your parents, talk with them, not at them. Be proactive on their behalf and ask about what they want. Tell them it’s not about money, it’s about supporting their lifestyle and desires for the future. And knowing those desires will let you assist them when they need it. Those efforts could include ensuring their comfortable retirement and making sure their financial situation remains positive. Make sure that you convey that you are having this talk because it is in their best interest for everyone to be prepared.
  • Avoid being condescending. Be inclusive — you’re a team. Keep everyone in the loop. Don’t point out past mistakes or judge outstanding debt. Just move forward with a new plan and address the past without focusing on why it happened. If there’s still reluctance, suggest finding a financial planner or other outside professional who’s an objective financial advisor.
  • Explain that, in order to help, you’ll need insight into their financial lives. Ask how they pay their bills. Offer to lighten the load by setting up online banking with automatic bill payments. Talk about your own financial planning experience. Maybe how you track expenses, cut costs, and avoid late fees by using auto-pay options.
  • Ask them about worst-case scenarios. Don’t beat around the bush — older adults have seen their fair share of life’s twists and turns. Ask them what they think would happen to their financial accounts if they had an accident and were hospitalized. Or needed a nursing home. Or, if one parent handles all the finances, ask the other what would happen if their in-house “financial expert” passed away. Being prepared and having a plan means their wants and needs can be met, even in the under the worst circumstances.

All these ideas get the ball rolling on detailed conversations and build a mutual understanding of your parents’ finances. Keep it positive, foster good relationships, and don’t give up.

The practical

You’ve started the conversation, and that’s great. Let’s look at some practical things you’ll need to corral during your financial roundup. Collect all the related records, documents and financial information and store it safely.

What will you need to help your parents with their finances?

  • Discuss the will. If they don’t have one, explain how your state’s probate law may distribute assets between heirs. If the estate must pass through probate, it may take months and might be an expensive court process costing thousands. If they have a will but are reluctant to share it, that’s fine. Make sure they have an original version on-hand (no photocopies) and that it’s stored in a fireproof safe or container you can access. If they have an estate plan, the same applies: Store it with the other estate planning documents and important legal documents.
  • Is there a durable power of attorney (POA) document? A POA allows another person to make decisions (such as legal or financial decisions) for an individual if they can no longer do so on their own. If your parents have a POA, ask where it is (add it to the safe) and who is to be appointed. If they don’t have a POA, offer to have one created by an attorney. It’s virtually indispensable when handling finances for incapacitated parents. You won’t be able to sign anything on your parents’ behalf without a POA.
  • Find out if they have an advance directive for medical care, or a health care proxy, to guide medical decisions. If not, have one created. Gather all insurance policies, including medical, disability, and life insurance. See if their health care policy covers long-term care, or if there’s a separate long-term-care insurance policy.
  • For bank accounts, IRAs, CDs, and insurance policies: Get account numbers and statements. Record beneficiaries and their contact information. It helps if your parents will add you as a co-signer on their accounts.
  • Credit cards and consumer loans: Get accounts, statements, outstanding balances, and APRs.
  • Organize and store all documents on reverse mortgages, rental agreements, vehicle titles, land or property deeds, stock certificates.
  • Make sure you have access to their online login information, so that you can manage accounts when the time comes.

Be patient, and prepare for success

If your parents refuse to participate, be patient. Continue researching the topic and visit and talk more with them. Mention changes in tax laws, Social Security, stock markets, and how those might affect their financial future. Listen for aging-related complaints; use that to offer help. Ask them to list situations in which they would want your help. Don’t give up, it can take a while. But you can do it, and others in the know can help.

For more information, check out Best Egg’s financial resources page and articles in Best Egg’s blog.