Managing Mom’s Money

28 January 2013 · 20 comments

My mother is sixty-four. She’s struggled with mental illness for over a decade. About eighteen months ago, my family came to the tough conclusion that Mom needs constant care. Though she’s still relatively young, we found help for her at a nearby assisted-living facility.

Mom is doing better now that she has round-the-clock professional care. In the meantime, her three boys have been watching the homefront. We each have our own responsibilities.

Every month, for instance, I pay Mom’s bills. You’d be surprised at how much it costs to keep a house, even when nobody’s living in it. It costs $250 every month for electricity, maintenance, and more. Plus, it costs $4118 per month for the assisted-living facility and there are a host of medical expenses (even after health insurance).

It’s not the big expenses that worry me, though — it’s the little things that have a tendency to slip through the cracks.

When I took over Mom’s finances eighteen months ago, I found a number of odd recurring charges, both to her credit cards and her checking account. When I began calling the phone numbers listed on the statements, I discovered that most of these charges were different types of credit and life insurance.

I was able to cancel a couple of these charges by phone, but most required more effort and more detective work. In other words, they needed more time. Because time is scarce in my life, I put off the problem until the next month. And the next. And the next. Eventually, a year slipped by, during which time I continued to diligently pay these miscellaneous fees.

Finally, last Tuesday I took action. I spent an entire morning calling around in an attempt to cancel these charges. I didn’t have much luck.

While companies make it easy to obtain services, it’s much more difficult to quit. I’m certain they didn’t ask Mom for any sort of ID verification when she signed up, but in order for me to cancel, it’s not enough that I know her name, address, birthday, and Social Security number. It’s not enough that I have Power of Attorney. In order for me to cancel, they need me to sign forms, to fax copies of the Power of Attorney, or to have my mother herself grant approval. So, my work isn’t finished yet.

I also discovered that Mom has six different life insurance policies through two different companies. “I wonder why she has so many policies,” I said to my brother. “She doesn’t even need one — nobody relies on her income, so there’s no need for her to have it.”

“You have to be careful,” my brother said. He’s been getting Mom’s mail. “I’ve noticed that sometimes these places send what look like bills, but if you send in payment, you’re actually signing up for yet another insurance policy. It almost fooled me once. There’s no way Mom would have caught it. No wonder she has six different life insurance policies.”

Together, these life insurance policies are costing Mom nearly $1500 per year. And for what? We’re not sure. We can’t find any sort of documentation, so we don’t know what her coverage is.

After spending a few hours digging into her accounts, I was able to track down about $2500 of wasted annual expenses. No, that’s not a fortune, but it’s enough to pay half of one month’s rent at her assisted-living facility.

Mom doesn’t have a lot in savings. She only has about $25,000 total to her name. Because she’s the president and majority owner of the family business, she receives an income every month, which — coincidentally — comes to about $4000 after taxes. That’s enough to pay for her room and board.

The bottom line is that Mom isn’t even treading water financially. She’s losing a little bit every month. Her meager savings are being eroded by a variety of unnecessary small recurring expenses.

My experience has made me much more aware of the difficulties older people face when it comes to money. My mother believed she was doing the right thing when she signed up for an $8/month credit protection service through her credit card, but it never occurred to her that the $96/year was largely wasted. If she’d asked me, or if I’d talked with her, I could have explained that there are other, free ways to monitor her credit.

If you have aging parents, take the time to talk with them about money. Ask if they need help with their finances, if there are any questions you can answer. Volunteer to go through their credit card and bank account statements, searching for unusual charges and suspicious activity. Pull their credit reports to be sure everything’s as it should be.

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