Podcast Summary: Helping Mom Manage Her Finances Jill on Money with Jill Schlesinger | Episode Released April 2, 2025

Introduction

In the April 2, 2025 episode of Jill on Money with Jill Schlesinger, host Jill Schlesinger, CFP®, delves into the challenges of managing an elderly parent's finances. The episode titled "Helping Mom Manage Her Finances" features a heartfelt conversation with Rose from Indiana, who seeks guidance on optimizing her 80-year-old mother's financial situation following the recent passing of her father.

Listener's Situation: Rose's Quest to Stabilize Her Mother's Finances

Rose initiates the discussion by outlining her mother's financial landscape:

• Income Streams:

  • Social Security: $900/month
  • Pension (Survivor Benefit): $1,500/month
  • Total Monthly Income: $2,400

• Expenses:

  • Mortgage: Remaining balance of $29,000 at a low interest rate of 2.75%
  • Overall Spending: Approximately $2,400/month, aligning with her income

• Assets:

  • Total Savings: $120,000, primarily invested in Certificates of Deposit (CDs) and a high-yield savings account earning 4%
  • Additional Funds: Proceeds from a recent farm sale and a small life insurance policy from Rose's late father

Rose expresses her concern about her mother's ongoing mortgage debt and her desire to either pay it off or invest the remaining funds more effectively.

Discussion and Expert Advice

Jill Schlesinger engages Rose in a comprehensive analysis of her mother's financial options. Key points from their discussion include:

1. Evaluating the Mortgage Payoff vs. Investment:

   • Jill's Suggestion: Given the mortgage's low interest rate of 2.75%, it may be more financially advantageous to invest the $29,000 rather than paying off the debt.
   • Notable Quote:

     "Mom, you have very little tax due on the money that we create. Shouldn't we earn a little bit more than we're paying in interest for the next five years?" (08:36)

2. Implementing a CD Ladder Strategy:

   • Explanation: Jill recommends creating a CD ladder by splitting the investment into various term lengths (e.g., three, four, five, and six years). This approach maximizes returns while maintaining liquidity.
   • Benefits:
     • Higher Returns: Potential earnings of around 4%, exceeding the mortgage interest.
     • Flexibility: Funds become available at staggered intervals, allowing for reallocation based on future needs.

3. Maintaining Liquidity for Emergencies:

   • Importance: Keeping funds liquid ensures that her mother can handle unexpected expenses, such as home repairs or medical emergencies, without the need to incur additional debt.
   • Jill's Emphasis:

     "Having access to those liquid funds is important... if something bad happened to her, like she couldn't live in her house, then what would happen?" (10:03)

4. Preserving Dignity and Autonomy:

   • Approach: Jill advises Rose to present the financial options respectfully, allowing her mother to make informed decisions without feeling pressured.
   • Strategy:
     • Present the Rationale: Explain the financial benefits of investing over paying off the mortgage.
     • Respect Her Wishes: If her mother remains adamant about paying off the mortgage, support her decision to ensure her peace of mind.

5. Future Planning:

   • Contingency Measures: Discuss potential scenarios, such as the need for home care or relocation, and ensure that funds are allocated appropriately to address these possibilities.

Conclusion and Takeaways

Jill Schlesinger concludes the episode by commending Rose for her proactive approach in assisting her mother. She reinforces the importance of balancing financial prudence with emotional sensitivity, especially when dealing with aging parents. The key takeaways from the episode include:

• Maximizing Returns: Consider investing surplus funds in higher-yield instruments rather than exclusively paying down low-interest debt.
• Liquidity is Crucial: Maintain accessible funds to address unforeseen expenses, ensuring financial stability and autonomy.
• Communication is Key: Engage in open, respectful dialogues with elderly parents about their financial preferences and needs.
• Strategic Planning: Utilize strategies like CD ladders to optimize returns while keeping funds available as needed.

Notable Quotes:

• "So maybe, you know, you're bumming out. You lost your job. You're a federal worker. You've lost your job because of just plain old downsizing. And it's time for a great money reset." – Jill Schlesinger (02:45)
• "We want her to have access to the money as long as possible... protecting her and maintaining her dignity." – Jill Schlesinger (10:06)

Final Thoughts

For listeners navigating similar financial responsibilities with aging parents, this episode offers valuable insights into managing assets, optimizing investments, and maintaining open communication. Jill Schlesinger's expertise provides actionable advice to ensure that both financial stability and personal relationships are thoughtfully balanced.

For more financial advice and to share your own financial challenges, visit jillonmoney.com and click the "Contact Us" button.