There might come a time when your parents need help managing their finances. In fact, that time might be now. Health issues, cognitive decline, loss of a spouse or even aging could be impacting their ability to stay on top of money matters. As a result, you need to get involved. But where do you start?
A good way to dip your toes into your parents’ financial affairs is to monitor their accounts. They might be more open to having a second set of eyes on their finances than, say, letting you handle transactions for them. Plus, it will provide plenty of benefits for your parents and for you if you do have to get more involved.
Why you should monitor your parents’ accounts
Monitoring aging parents’ financial accounts offers several benefits. For starters, it will help you piece together their financial picture so that you have the information you need if you have to manage money matters for them. You’ll know how much money is coming in and going out each month, what sort of bills are being paid, whether there is debt and if there are any financial issues that need to be addressed.
Being a second set of eyes on your parents’ accounts also will allow you to spot small money mistakes before they become big problems. More importantly, it will help you catch unusual transactions and signs of fraud. Then, you can intervene quickly to limit the damage.
Ways to monitor your parents’ accounts
There are a variety of ways to monitor your parents’ financial accounts. The method you choose will depend largely on what sort of access your parents grant you and which feels more comfortable or convenient for you.
Review paper statements
This is the least convenient and least efficient way to review activity on your parents’ financial accounts. But it might be your only option if your parents haven’t granted you online access to their accounts or haven’t given you legal access to their accounts as a joint account owner or as their power of attorney. If you live nearby, you can go through their mail daily or ask them to hang onto any financial statements they receive so that you can review them.
Get online access
Your parents might be willing to share their account login credentials with you. Technically, though, you need to be a joint account owner, your parents’ power of attorney, or their court-appointed conservator or guardian to legally access those accounts.
If you are a joint account owner, you should be able to create login credentials to view accounts online. Otherwise, you will need to provide copies of the power of attorney document or court documents to your parents’ financial institutions to alert them to your status as your parents’ agent. Then, you can monitor their accounts online. (You might need to ask the financial institutions for assistance creating login credentials if your parents can’t or won’t share theirs with you.)
Set up account alerts
Your parents’ financial institutions likely offer the option to sign up to receive notifications about activity on their accounts. You could set up these alerts if you have access to accounts online, or you could ask your parents to set up alerts and add your contact information to receive them.
Receiving alerts will keep you informed about activity in your parents’ accounts so that you can respond if there is a problem, such as an overdrawn account or an unusual transaction. However, you shouldn't rely solely on alerts as a way of monitoring their accounts. Financial institutions typically don’t offer a broad array of alerts, and it’s up to you or your parents to set the parameters for alerts. So a variety of transactions could slip under the radar if you’re not regularly checking their accounts online.
Use a credit monitoring service
Help your parents get free copies of their credit reports at Annualcreditreport.com to see all credit card accounts, lines of credit, loans and mortgages in their names as well as the status, amounts owed and payment history of all accounts. Keep an eye out for any accounts they don’t recognize, which could be a sign that their identity has been stolen and used to open accounts in their names.
Checking your parents' credit reports can help you spot potential fraud, but a lot can happen between checks. That's why it’s a good idea to sign your parents up for a credit monitoring service, which will constantly monitor their credit reports and send alerts of any changes—such as new accounts that are opened. If the accounts are fraudulent, you and your parents can act quickly to report the fraud and close the accounts.
Sign up for all-in-one monitoring
The easiest way to monitor all of your parents’ financial accounts, credit reports and identity is to use an all-in-one service such as Carefull. If you have your parents’ login credentials, you can link their bank, credit card investment accounts to the Carefull digital platform to get 24/7 monitoring. Or, your parents can sign up and add you as a trusted contact to give you view-only access to accounts that are being monitored.
Carefull’s AI technology determines what is normal for your parents and alerts you to changes in transactional behavior, including signs of fraud and money mistakes common to older adults. It includes credit monitoring to spot changes in their credit reports and identity monitoring to detect illegal use of their personal information. Plus, they’ll get up to $1 million in identity theft insurance coverage if they become victims of identity theft.
Try Carefull for free for 30 days to monitor your parents’ finances and help protect them from fraud and money mistakes.
[ Keep Reading: Checklist for Managing Your Elderly Parents’ Finances ]