It’s hard to see family struggle. Especially when that family is our parents and the struggle is crippling debt that’s affecting their golden years. It’s a precarious spot to be in, one that many adult children never envision.
But in exchange for all those years of care and support, you’re well positioned to return the favor by helping them get out of debt.
Even if you’re not in the financial position to pull your parents out of the hole, you can be a positive influence in their journey to financial freedom. Let’s discuss a few ways how below.
Debt can trigger a lot of emotions, such as denial, fear, anger, stress and depression. Combine any of these emotions with the vulnerability of financial hardship in old age and the potential for serious mental and physical health effects run high. But debt can also eventually bring sweet relief.
You can make a huge impact on your parents’ journey right away by consoling them and communicating that you’ll be there to help them through the process each step of the way.
Help Organise Their Financials
Assuming your parents are on the same page with wanting to find a solution to their debt, have them assemble all their recent credit card statements so you can jot down creditor information, the balances they owe, minimum payment amounts, interest rates and due dates. With this information neatly laid out alongside your parents’ monthly income, you can determine your parents’ risk level and what type of solution needs to be taken.
Break Down Their Options
The internet gives us a wealth of knowledge on nearly any question we could have. After better understanding the situation your parents face, explore solutions like credit counselling, debt consolidation, debt settlement and even bankruptcy. For credit counselling, debt consolidation and debt settlement companies, make sure you’re being thorough and asking them detailed questions. You should also visit their website to see how forthcoming they are about their process and any possible consequences. You can get an idea of what I mean on the Freedom Debt Relief reviews page, which tackles questions like “Is Freedom Debt Relief a Scam,” and “How does debt relief affect my credit?”
Encourage Better Spending
It might feel awkward to tell your parents what to do, so don’t. However, you should try to encourage them to spend their money more wisely. If they’re in (consumer) debt at this stage in life, a bad spending habit or two have likely contributed. Instead of coming at them with a judgemental stance, try to relate by sharing a spending area you struggle to corral. Then as a group, figure out how much money is being lost to the spending habit(s) each year. Again, frame the exercise more as a productive investigation versus an accusatory “let’s get to the bottom of this.” Your parents trust you, the last thing you want is to alienate them and adversely affect their progress.
If your parents are on a fixed retirement income, establishing a reasonable budget is even more critical since debt repayment needs to be handled as aggressively as a financial situation allows.
Assist with Tech
Technology has allowed personal financial management to be a much more hands-off process. If your parents are open to implementing technology in their financial lives, help them integrate their accounts online and tie it back to a budgeting tool like Mint. This will help them see where their money is going each month without having to meticulously track every purchase (assuming they don’t still use cash for everything). You’ll probably have to take charge at first to get them in the habit of logging into the app and categorising their expenses, but they’ll get the hang of it soon enough.
Your parents tried to give you every opportunity possible while you were growing up, all without the expectation of anything besides love. You can show them how much you care by acting as their rock during this tough time. By showing patience, sympathy, and unwavering assistance, they’ll beat debt with full hearts knowing it wouldn’t have been possible without their baby leading the way.