Awkward money conversations you should have with your parents

Talking about money and finances with your parents is generally stressful since you cannot pass it off as a ''casual conversation''. Money conversations are generally perceived as ''taboo'', ''sensitive'' and awkward to initiate. But they should be encouraged considering the mental relief and peace one feels after concluding such conversations.

I have seen many families generally avoid talking about money with their children or worse, having ''the ugly money talk'' usually after a tragedy strikes. Unfortunately, that does not end well, as people are shocked when such delayed conversations occur. 

So it's best to have money conversations when you are fit and healthy and in a condition where even if you get any shocks, you can do something about it. The goal of having these conversations is for everyone to be on the same page and to utilise the resources that are available and be proactive. 

1. Investments for retirement: Try to understand your parents' investments and why they invested in specific assets. Though you might have a different opinion and may not see your parent's asset as ''an asset'', you have to respect it. As parents grow old and expect to realise the capital gains or passive incomes from these assets, see if their needs are being satisfied.

If they aren't being met and you are capable enough to take care of it for them, figure out a plan to make this possible. Check for stocks and other kinds of investments and have them put them down together on paper in one place. Arrange for meetings with finance managers and understand how your parents would like to deal with these assets. 

2. Costs and current liabilities: Though your parents may be paying monthly installments to repay the car or home loan, EMIs are ultimately a financial liability because cash is always flowing out of your pockets (unless you can juice some tax benefits out of it). Try and understand the current and upcoming liabilities that your parents have and what is expected going forward. Understand what they want their future to look like and what loans or financial arrangements you might have to make to financially support them in their future plans. Try to figure out what expectations they have of you. You might want to understand if they want to shift to a different place for retirement and if that will affect their finances or yours.  

3. The overall debt situation: You can ask questions that help you and your parents to acknowledge, improvise and work out a better way to get out of a debt situation if there is any. Understand things like: 

• How much debt do your parents have on them? What's the mortgage amount that is yet to be paid?
• Does someone owe them money? What does it look like?    
• If your parents pass away, who will pay for it and how will this be managed?
• Are all the necessary loan/ mortgage documents in one place? Have they taken any liabilities or given loans that are undocumented or need translation? How would they wish for it to be dealt with? 
• Is there anyone the kids can talk to about debt other than their parents? 

4. Insurance policies: The least you can do is to check with your parents about their life and health insurance policies - the value, the maturity period, how many beneficiaries are present, what's the process like etc. Ask them to share their real-life experiences that they have witnessed and see what you can do to make it better for them because healthcare costs for elders can get out of hand and can be an unexpected shock. 

5. Savings: Check your parent's outlook on savings and get a hang of what their savings look like. 

• Have they saved up in cash? Where is it and how much do they normally save at any given point of time?
• Are there any secret saving spots? (like under the rug or a hidden wall maybe)
• What kind of bank accounts are active and how well stocked are they? (Remember Harry Potter's parent's vault at Gringots bank?)

Coz at the end of the day, you don't want anyone to be in a situation where they say: 

6. Inheritance and will: Depending on your own family arrangement and staying preferences, you will have to account for and understand their preferences for staying over the years. For eg: They might want to stay with you when you are getting married and might want you to stay separately when you have kids. This is when you have to plan your own finances so that everyone's choices are respected.

Also, if you are getting an inheritance or expecting it and know that you might have to split it with your siblings, get everyone on the same page by asking for more clarity. See if you can plan a way to use inheritance money to cover your debt payments. 

Though these conversations will seem slightly yucky or you might feel like running out of your room, I assure you, the conversations only get better with time.