"The Talk"—everyone remembers it.
Maybe your parents sat you down and excruciatingly explained every gory detail. Or maybe, if you were lucky enough, they left a copy of It’s Not the Stork on the end of your bed and let you figure out the rest. It was awkward for both of you. But like it or not, communicating with your family about certain topics is important.
Take money, for example. At some point, the tables will turn, and it will be time for you to have "The Talk" with your parents when it comes to their finances. It can be a delicate conversation to have—especially as they get older. But before you go feeling all uncomfortable, consider this article: "When Family Gathers—Lay the Groundwork for Open Communication." Written by Kathy Murphy, President of Personal Investing at Fidelity Investments, it explains the importance of having these kinds of conversations, and offers suggestions on how and when to have them.
Let's start by talking numbers. According to Fidelity's Intra-Family Generational Finance Study,* 95% of adult children and their parents agreed that it's important to have open and honest conversations about wills, estate planning, or healthcare. That said, only 34% agreed on the best time to have those conversations. The lack of clarity around when to talk about money with family members is disconcerting, but Kathy offers some helpful guidelines.
Questions to consider
Part of the awkwardness in talking to your parents about their financial situation is not knowing where to start or which questions you should be asking. Here are some conversation starters:
- What are your goals?
- What are your plans for retirement?
- How are you planning to fund your healthcare?
- Who will handle your affairs in an emergency?
- Do you have a will?
The right time to have "The Talk"
Kathy suggests starting the conversation at family gatherings or holidays—a time when family is together. You can assign yourself—or a sibling—as point person, and open up the dialog to discuss everything from investment strategies to tracking down paperwork. And don't just make it a one-time conversation—open it up to an ongoing dialog, and commit to checking in regularly.
Preparing for the unexpected
Having the conversation could help you get a better handle on your parents' affairs, just in case something unexpected happens. Knowing their financial situation will help both you and your parents feel more prepared, and help you better understand what your role will be in the process.
THE BOTTOM LINE:
Think about having "the financial talk" with your parents at some point. With Kathy's suggestions in mind, the conversation could be a lot less awkward—and potentially more rewarding—for all of you.
Take the next step
Give us a call for free tips on having the financial talk with your parents.