Managing money in 2016 is complex, and managing money for someone else is an added layer of pressure to do it well. If managing your parents’ money is a priority for you as 2016 begins, you know that pressure intimately. Here are three ways to ensure that you can keep everything balanced in the new year.
Make a Plan
Outline your priorities. These are completely personal to you, so give yourself time to meet and discuss this with any financial professionals with whom you work, other family members, and your parents. Are you looking to simply maintain current wealth? Are you interested in investment opportunities? Are you unsure of which you want and need more information?
Match each priority with a series of direct, clear actions. Make a physical or electronic list of each step and when and where it will take place. This keeps you accountable and moving throughout the process. It will also show you how far you need to go to achieve a given goal.
Unsure of what steps to take? Stop and research before getting discouraged or taking a wild guess. Financial experts are everywhere, and solid financial advice can be found anywhere from your local bank branch to the Internet to television shows geared toward making people more financially literate. Forbes.com has free archives on financial information. Mint.com is also a free resource that contains financial help and information. Khan Academy features instructional videos and materials that cover all kinds of information, but check out their economic and financial instruction for the basics. Everything is free online.
Keep Things Organized
Keep as much information in one place as possible. If you are tech savvy, link your priorities and schedule with your smartphone or tablet. Keep electronic (and not confidential) documents easily accessible through Google Drive or Microsoft Outlook.
When it comes to managing money that is not your own…
By remaining physically and electronically organized, you limit the possibility for confusion, miscommunication, and missteps. You cannot lose a document if it is always kept in the same spot, or if it is available via your smartphone—the best organizers among us know this fact very well. When it comes to managing money that is not your own, this becomes doubly important, because some information may not be easily re-accessed if misplaced.
Once you get a few things checked off your list, sit down with the team you have (hopefully) assembled and make sure that everyone is on the same page and that priorities remain the same. Set a monthly or bi-monthly meeting/conference call/e-mail chain that checks in on how investments are going, or how accounts are balanced. Being accountable to others will help you stay on track, and being responsible and flexible as new needs arise is vital. Take the following for example:
Susan manages money for her mother, Marie, who has accumulated some wealth, but wishes not to touch the majority of it. Marie lives in a modest home with her sister in Raleigh, North Carolina. Because of her financial goals, Marie keeps a very tight budget. However, a sudden health crisis with their brother Samuel means that Marie will be making some expensive trips back and forth to San Diego, California. The budget does not allot for these trips, but Marie must, obviously, visit her brother and his family while he is in the hospital. Susan sets up a conference call with her mother’s accountant, primary care doctor (who would be managing Marie’s health care needs and dispensing prescription information), and Susan’s younger sister Karen to re-plan their mother’s finances for the next month or so. Each party explains their concerns surrounding the travel, and they come up with a plan that allows Marie to get back on track saving money next month, once Samuel is home from surgery.
Making a plan and keeping all interested parties informed may seem like a logistical hassle, but scheduling and planning will only make your life easier in the long run.
Lo, A. (May 10, 2013). Finance Theory 1. MIT OpenCourseWare. YouTube. Available at https://www.youtube.com/watch?v=HdHlfiOAJyE&list=PLmSGbCS0swswHGaytV6QQkyA9tGR7i0tV. Retrieved 1/11/2016.
Redaphilpott, A. (January 24, 2014). Managing Your Parents’ Money. YouTube.. Available at https://www.youtube.com/results?search_query=managing+your+parents+money. Retrieved 1-11-2016.