How to Talk to Your Parents About Their Reckless Spending

Supported by GEICO.

Confronting your parents about their questionable financial habits probably isn’t anyone’s idea of a good time. It’s a lot to wrap your head around, especially if—like the overwhelming majority of people with aging parents—you’ve never had a single conversation with them about their money, finances, retirement, or savings. 

Out of 1,001 Americans polled, a whopping 73% haven’t had an in-depth financial talk with their Boomer parents, according to a 2019 survey by GOBankingRates. Nearly one-fifth of respondents said they don’t think they should ever discuss their parents’ finances because it’s none of their business. (They’re wrong. It is helpful and sometimes necessary to help avoid impending financial calamity.)

Others may simply wait to have these conversations until there’s a compelling reason, such as an emergency or a crisis. However, “if you wait until a crisis to have these conversations, it can be too late,” says Cameron Huddleston, a family finance expert and author of Mom and Dad, We Need To Talk: How to Have Essential Conversations With Your Parents About Their Finances.

If it strikes you as funny or odd that such a book exists, it might be. After all, the wealth gap between Boomers and the generations that have followed has been well documented. Millennials control less than 5% of US wealth, and Boomers control over half. (Gen X finds themselves between the two at 25%.) So it may seem absurd to be worried about any Boomer’s bank account. Unless, of course, that Boomer is your parent. Because the fact is, they also may be in trouble financially, especially if you know they spend with abandon. A recent report by Insured Retirement Institute said that a majority of Boomers are totally unprepared for retirement. In fact, 45% of Boomers have no retirement savings at all! 

Having the talk won’t be easy. But Huddleston encourages us to push through any feelings of awkwardness and have these hard conversations sooner rather than later. So take a deep breath. Here’s how to talk to your parents about their worrying financial habits. 

Don’t blindside your parents with a heavy convo out of nowhere. And definitely don’t ambush them at a holiday meal or in mixed company. “People think ‘Oh, we're all here together. Pass the turkey. So, mom and dad tell us about your will. What will our inheritance be?,’” Huddleston says. 

“That's not the time to have the conversation,” she continues. There may be other relatives in attendance who don’t need to be privy to this information. Not to mention, “if someone's had too much to drink, that conversation is going to go downhill pretty quickly.”

You are, after all, talking about “two massive taboos: money and mortality,” says Erin Lowry, author of Broke Millennial Talks Money. When asking your parents about their financial issues, “you're also talking about, like, ‘Hey, there's going to come a day where you might not be able to take care of yourself or you might not be able to work,’” she says. “It’s not exactly a cheerful conversation.”

So find a moment when you’re relaxed, like out to lunch or at a cafe, one on one (or one on two, as it were). Pick your spot wisely and with care.

As tempting as it may be to hold their unhinged financial decisions as evidence they need your help, that’s not the move. “You don't want to start out by criticizing the way they are spending their money,” Huddleston says. “That's just going to put them on the defensive and then they're going to shut down.” 

The truth is if your parents aren’t in cognitive decline, they have every right to spend their money as they see fit, Huddleston says. “That doesn't mean, as their child, you can't have a conversation with them about their spending,” she continues. You’ll need to strike that balance.

If a parent is reluctant to have a conversation about their finances with you, consider who they might listen to instead. Perhaps there’s a religious leader, family friend or in-law they’ll trust. 

Andrea Woroch, a consumer finance expert, suggests introducing your parents to a financial advisor a friend has had success with. If you’re in a position to help, maybe you can even arrange a consultation. 

You can also loop in your siblings, if you have any and if you’re on good terms. Ask if they’re worried about your parents’ financial habits too. “It's important for all of you to get on the same page about mom and dad's care,” Huddleston agrees.

Lowry suggests asking an open-ended question: “What does retirement look like to you?” This way, she says, you’re not asking directly about their money situation. Instead, you can look for the context clues in their answers. 

“If your parents said something like, ‘I can't afford to,’ or ‘I'm not going to retire,’ eventually the conversation does need to be had,” Lowry says.

Overarching questions like this can even be couched as though you’re asking for advice on retirement for yourself. That way, “they still get to be the parent, but you're getting information…so that's an easy way to go about it,” Huddleston says. 

A good way to offer sound financial advice to parents who may need it is to tout your own successes. Let your parents know if you’ve saved money by negotiating with service providers, or tightened your belt in areas that didn’t make you feel deprived. You can even mention it in passing, says Huddleston: “I recently paid off all my credit cards and it has lifted such a weight off my shoulders,” or something similar. Then you can send them a link to an article that helped you take control of your spending. 

Woroch recommends keeping the vibe as positive and open as possible. You want to avoid making your parents feel put on the spot or ashamed. 

Huddleston agrees. “It's so important to remember that you need to be speaking with your parents out of love and respect,” she says. “Even if you know more about financial matters than your parents do, even if they're making mistakes again, you don't want to talk to them in a condescending way.”

Your parents have the right to spend their money the way they want to, “but you certainly have the right to let them know if you're concerned and you're worried that you're going to have to help support them,” Huddleston says. 

“You're going to want to be treated with respect and dignity as you age,” Lowry said. “Afford your parents that same thing. And just try to avoid strong-arming or getting into big fights. And if you feel yourself getting really angry, walk away and come back to this later.” 

Hopefully by approaching your parents with reverence and love, you can come together and start talking about the future in a way that’s beneficial to you and them.

This article is supported by GEICO.