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How To Talk To Your Parents About Money

Parents are our leaders in life—our teachers. That’s one reason why it can be uncomfortable to talk to them about money. We don’t want it to come across like we think they don’t know what they’re doing. After all, they’re the ones who are “supposed” to know more about money and life.

But the sooner you talk to your parents about their future, the better. It’s so much easier to do it while they’re still mentally alert and in good health than when they’re in the middle of a crisis and you’re trying to piece everything together yourself.

Here are some tips for talking with Mom and Dad about their financial future:

1. Prepare for the conversation. 

You want to get this stuff out in the open as soon as possible—but do a little preparation on the front end. Make a list of what you want to talk about, like their:

  • Will and estate plan
  • Overall debt situation
  • Investments for retirement
  • Term life insurance
  • Plan for assisted living
  • Long-term care insurance
  • Awareness of identity theft schemes

Once your list is ready, schedule a time to sit down and discuss it with your parents. Choose a time when they’re likely to be calm and there’s no family drama going on.  When you suggest the meeting, be up-front and let them know the goal of this meeting is to talk about their future and make sure everyone is on the same page.

2. Be clear, humble and kind.

Money can feel like a taboo subject, especially for adult children to bring up to their parents. Your parents might assume you think they don’t know what they’re doing—and that’s not the vibe you want to put off! If the conversation feels uncomfortable before it really even begins, here’s what you can do:

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First, keep your tone open and heartfelt. The last thing you want is for them to feel judged for their financial decisions, or to think you’re just trying to figure out how much you’ll get for your inheritance. One thing I do at the start of any awkward conversation is call it out: “This is going to be kind of awkward, but I think it’s important.”

Second, listen more than you speak. Make the conversation about what they want by asking questions like, “What do you picture your life looking like in one, two or ten years? What kind of legacy do you want to leave?” The point is to show them you care about being able to carry out their wishes. 

3. Ask about their current plans. 

They may have plans for some of this already, and if they do, that’s great! The goal here is to get everyone on the same page and make sure all the bases are covered. Here are some essentials to cover and how to navigate those conversations:

Will and Estate Plan

No one wants to talk about death. Since it’s such a touchy subject, keep the focus of the conversation on just getting an estate plan done—not on what they’re leaving to whom. Tell Mom and Dad they can leave whatever they want to whoever they want and you don’t care how that shakes out in the will—you just want to make sure they have one.

Make sure they know that having a will means the surviving spouse will be taken care of no matter what happens. When you frame the conversation this way, it has a different feel.

 

Paying Off Debt

Your parents might believe it’s too late for them to start saving for retirement or paying off debt. That’s a dangerous mindset because it guarantees they’ll stay broke. If your parents’ financial situation has beaten them down, get them to start beating back.

So, focus on good news instead of bad. One way to start the conversation is to talk about how much better things are for you (and your family) since you started getting out of debt and making a budget. Maybe it’s your communication level, your sense of freedom, or your reduced stress. Your parents will love to hear about it! Who wouldn’t want to hear that their son or daughter is doing well?

And when parents hear good financial news, their ears perk up. If they decide they want to change the way they handle money to achieve similar results, it becomes their choice, not just “taking the kid’s advice.” It may take some time, but keep encouraging them.

Moving Into Assisted Living

This one is probably the hardest. No one wants to be told it’s time to leave the house they’ve lived in for so long and go to assisted living or a nursing home. They probably see that as the start of the final act—and they aren’t ready to bow out yet.

Your parents are adults, and it won’t go well for you if you treat them like kids. Don’t tell them they “have” to do this, because that will only cause friction and pushback.

It’s a better idea to sell them on it. If they’re having trouble getting around the house, then find a good facility with an active community (preferably one with people they know, if that’s possible) and talk about how great the place is. Show them how it’ll do all the hard work for them, so they can really enjoy a carefree life. You may even offer to adopt their family pet so they know he or she will be in good hands. 

One issue I see a lot is when parents don’t want to use their life savings on their own care. They’ve worked for it their whole lives and wanted to leave it to the kids. Whatever you do, don’t tell them that’s a bad reason to not move into a home or facility. Instead, tell them you appreciate the thought, but it’s their money, not yours. You’ll be fine (especially if you’ve started your Baby Steps) and you care more about their well-being than their wealth.

Long-Term Care Insurance

If your parents are older than 60, talk about long-term care insurance with them. Long-term care insurance is basically insurance used for a nursing home or assisted living.

You see, the cost of long-term care without insurance is a huge financial burden. On average, Americans spend $140,000 out of pocket on long-term care—out of pocket!1 

Most health and disability insurances won’t cover long-term care—which is why it’s so important for your parents to get long-term care insurance. The average annual cost is about $1,700–4,200 for men and $2,700–7,225 for women.2 That’s way more affordable than having to pay that $140,000 out-of-pocket cost!

If you’re helping your parents figure out if long-term care insurance is right for them, check out our comprehensive guide here.

4. Ask for their advice.

No matter how old you are, I always recommend talking to someone a little bit further along in life than you are to get their take. Who better to do this with than your own parents? Here are some conversation starters:

  • What’s the one thing you did with your money that you’re most proud of?
  • If you could do anything differently with your money, what would it be?
  • What’s the biggest financial risk you took, and did it pay off?
  • What should I make sure to teach my kids about money?
  • What do you wish for me and my finances?

Asking these kinds of questions will allow them to pull up old memories, speak into your life, and get a sense of the legacy they’re leaving. Honestly, nothing is more valuable than that.

Money topics are never just about money. These subjects will always be touchy and emotional, so expect that when you talk about them. And if you want to dig in to the way money has played out in your and your family’s story, learn about each other’s money tendencies, and so much more, check out my latest bestselling book—Know Yourself, Know Your Money.

Rachel Cruze

About the author

Rachel Cruze

Rachel Cruze is a two-time #1 national bestselling author, financial expert and host of The Rachel Cruze Show. She has appeared on Good Morning America, Today and Live With Kelly & Ryan, among others. Since 2010, Rachel has served at Ramsey Solutions, where she teaches people how to avoid debt, save money, budget and win with money at any stage in life. Learn More.

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