How to Talk to Your Parents About Money

Financial contributor Mellody Hobson helps bridge the generation money gap.

ByABC News via GMA logo
July 14, 2009, 2:48 PM

July 14, 2009 — -- Discussing finances with your aging parents can be difficult. But delaying conversations about estate planning and retirement costs could end up costing your family.

"GMA" financial contributor Mellody Hobson offers tips on beginning this all-important conversation. Check out her advice below.

When you first approach your parents, make sure you do it in a warm, loving way where you talk about your own thoughts about the future.

Do not be direct or confrontational, but show that you are concerned. If you find an opportunity to open a dialogue with them, then take it.

For example, if you recently opened a retirement account, then use that opportunity to talk to your parents about their retirement savings. Offer to help them in any way possible.

The most important step in this whole process is opening up this communication line. Do not get frustrated if it takes you several rounds of communications to get your parents' trust on their financial issues

It is important to have this conversation as soon possible. You do not want an emergency to dictate your plans.

Now that your parents have accepted your help, it's time to get organized. Find out where they keep all of their financial and legal documents.

These documents include wills, durable power of attorney, medical power attorney, insurance policies, bank accounts, and so on. The AARP's Web site has excellent forms that can help you organize your parents' documents, and they have other resources that may come in handy in the process.