Unsure how to handle parents' money now that assets are gone. Any suggestions?
I spent down all of my parents money (wasn't much) so they could both qualify for Medicaid. Mom received it YAY!, and still working on dad's. However, now their only money is their SS checks. I'm not the best at managing money (I'm 21 and also very broke) and my mom isn't either. She goes to Walmart every day or has her home health worker go, and spends too much eating out. I'm afraid she'll overdraft or not leave me with enough to pay bills. I could become her rep payee, but I don't think I'll be able to keep the record keeping that SSA requires. I tried to contact the local payee organizations but they are full and not accepting. I could, with my parents' permission, change their SS deposits to an income manager account at Edward Jones that would monitor and predict spending, I could put all their bills on autopay, and give my parents a weekly allowance using the Walmart debit card. I'd like to do that the most rather than become rep payee. How do you manage finances without becoming a rep payee, conservator, etc? My parents are very compliant, and will let me do just about anything if it means their money is okay. And no there's no family that want to help.
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I use a budget app called YNAB. It costs about $5 a month but I find it very helpful.
Unfortunately, my experience with Edward Jones is that EJ has a rather complex fee schedule for withdrawing money (and I am limited as to how much money I can take out of my Mutual Fund in a 12 months time span) and so you most likely will have a fee for every time they do some activity as an income manager. Is that where your parents SS is being direct deposited? Do your parents have an account with a bank also? Or will the autopay billing service be coming from EJ?
You might want to check with a local bank and see if their fees are less than those of EJ for the same services.
Putting all of your parents bills on autopay and then giving your parents a weekly allowance using the Walmart debit card shows that you have the ability to manage money.
Also, coming to this website forum took a lot of guts and not many people your age would have the courage that you have to ask for help. Please come to this forum and ask questions whenever you need to. You can also "VENT" your feelings to us. We may not always say what you want to hear, but what we say, we say with love and caring for you and your parents. God Bless!
managing money to me is not so hard.
its the SPENDING that messes people up. when you are on low income, there isn't room for impulse spending.
make sure you and your parents know they only have a certain amount each month for non-necessary items
make sure the home health worker knows they have a strict budget
just edit to add. not sure if they are living in their own home? or renting? if in their own home they also need to budget in money for repairs.
Since your parents are compliant, and since the income as I understand it is limited to SS checks, I'd make this as simple as possible. Go with your parents to their bank (and I can suggest a good major bank if it helps) and set up either a joint checking account for both of them, or one for each. Explain to the banker that you need to be a co-signer, with rights of survivorship. That enables you to access their account(s) if either of them pass or are unavailable, such as hospitalization, and you need funds. You could then continue to manage their accounts until they're drained, which apparently would happen quickly if SS is d/c/ed after death and is their sole source of income.
The ideal arrangement would be to keep a small amount in a savings account, not b/c of the interest, but b/c the bank might have an overdraft program that would automatically apply the funds from the savings account.to address the overdraft. If I remember correctly, there's then no overdraft fee. I thought of this b/c you wrote that your mother spends freely.
I wouldn't even consider Edward Jones or that level of company for payment of bills. If there were thousands of dollars in assets, that might be appropriate. But in this case, "keep it simple" is the best philosophy.
Since you're apparently new at this, it might help to create a spreadsheet, or list, of all the bills. I include the creditor, date bill was received, date it's due, amount due, and when I paid it. I did this b/c I knew all my bills by heart, but sometimes I forget which ones my father had, so the spreadsheet (or just a list) helps me monitor to keep a "handle" on the situation."
The receipt date helps if a bill isn't received, which has happened.
If you pay online, you can just a chart or something simple like a basic spreadsheet just to keep track of the payments and ensure that everything's ok.
Do your parents use credit cards? If not, and if you do want one (especially for emergencies), get one with a good cash back reward program. I accumulated my father's points and just redeemed them for about a $700 credit off his last bill.
Are there other financial issues on which you'd like suggestions?
I'd been preparing my parents' taxes for years, and sometimes had some complicated issues from investments, so I made a checklist of everything that had occurred and possibly occurred that was tax related. I use it as a checklist now instead of using the prior year's tax returns as a guide.
It was especially helpful when there was a complicated share split on one investment, and I knew it was something I wouldn't remember after wading through it.
I also listed every possible medical expense category, especially helpful since there might be an out of pocket expense for something like compression stockings one year, then some salve or something similar another year. They weren't repetitive items so I might otherwise have missed them.
It looks as if you are asking all the right questions, and as a result you will become money-savvy throughout your life, even after your parents are gone.
My only concern is finding a card with a high enough credit limit - at least 3,000. But after the bankruptcy (from old debt and Medical debt) I'm doing for them, I heard credit scores actually go up a bit. So we'll see!
You are on the path to becoming a very money savvy woman, which will benefit you for your entire life. Keep up the good work!
I am sorry if that is confusing, I tried to keep it simple. My concern is that if aj is not mindful of when the billing cycle is, she can get bit thinking she has paid in full, but there was a balance on the statement from one month to the next, creating unexpected interest. Credit card companies have multiple tactics to increase their income, as consumers we need to be aware and educated how the billing cycles work to protect ourselves.
Does this help Jacob? If not let me know. Thx
I get SS, but it arrives in one of my bank accounts late in the month. (I guess the 3rd used to be the "traditional" date for SS; I had nothing to do to with selecting the due date on this account). I think of SS as gravy on top of other sources of income although SS is handy because it's completely liquid.
You are correct that credit card companies can be shrewd as to how they work the system for maximum income. I understand that if one has interest and makes only small payments, the company will credit the payment toward the interest but not the principal because they want to maximize the principal to justify charging the most interest each month. In any case, I think (and hope!) aj will become a very astute manager of money.
A couple decades ago I wanted to charge the purchase of a used car to my credit card, but the dealer didn't want to allow it (I guess they didn't want to lose money to the credit card company), so I had to pay by check. I wanted to get the airline points!
Thanks again, Bob Jacobson
I'm glad I clarified what I was saying, it is to easy to misunderstand cc debt and have it snowball, especially when there is such limited funds and a bankruptcy that can cause HIGH interest rates.
Hope all have a lovely evening.
You are young.
You are the one to do this.
Apply yourself on your parents behalf, and before you know it, you will become better at handling money!