Welcome to agespace money, the podcast that gives you insight, ideas and perspectives on elderly care and finance.
This podcast is presented to you by Annabel James, Founder of agespace, which is an online community for anyone looking after, or supporting, an elderly parent; and Jason Butler, financial wellbeing expert and author of “Money Moments: Simple Steps to Financial Wellbeing”.
This episode discusses the topic of financial organisation.
You’re not alone if you feel daunted by the prospect of financial organisation. When I go around the country doing my financial wellbeing talks, I say to people, “Do you know what you’ve got, where it is, and where you’re going?”. A lot of people feel mentally ‘under the cosh’, as they are disorganised.
Even in this digital age, it’s easy to be disorganised; and you can still have a big pile of papers, as we get lots of stuff coming through the post-box.
If you think about older people, whilst some might be using the internet, they could be less internet savvy, or they’ve got a bigger back catalogueof stuff.
I said to my father-in-law, who is nearly 88, “bring all your stuff over; I want to do an audit”. What I didn’t realise was, it was seven huge ring-pool finders. He had stuff going back 22 years.
I didn’t know why he was keeping all of this stuff, and he said, “Oh, there are probably a few bits there that you can get rid of”.
I gave him back 12 sections in one file; the rest of it could be shredded, and he said, “I feel so much better, I feel really organised”.
Annabel: So what was in those seven folders, and what did you do to reduce down to 12 sections in one file?
Jason: Basically, he didn’t have a master list – this is a list of all the types of important documents you might need.
How do we go about organising our papers and creating a master list?
STEP 1: Get a big piece of A3 paper, and turn it into four sections:
- Bank Accounts;
- Legal stuff;
- Anything else, that doesn’t fit into the above categories.
STEP 2: Take a pencil, and map and mark documents against the master list.
STEP 3: Go through the paperwork, and start working out the piles, corresponding to your master list.
STEP 4:Once you have your papers catalogued in piles, work out what you need to keep or shred.
STEP 5: After that, fill in your A3 sheet of paper, to work out where everything is.
STEP 6: Finally, sit down with the person you are doing this for, and ask, “Is there anything missing, is there anything you haven’t told me about that you think should be on here”?
When I asked my father-in-law, it turned out that he had two accounts on one of his ISAs, and there was another one with £16,000 in it, which, if I hadn’t asked him, I would not have known.
The process of doing this with my father-in-law was very cathartic:
- He went away with a slimmed-down version of his paperwork;
- I had a clearer idea of what he had;
- He felt supported that I knew where everything was.
Once I got clear idea of what he had, I realised that he was getting 0.25% on a cash ISA; and with the same company, we got that increased to 1%.
- Getting organised has an emotional wellbeing element of feeling control.
- Secondly, from a practical point of view, you can work out what they’ve got, and what the resources are.
- Thirdly, this is the basis on which you can make changes, e.g. merging accounts, or closing things down.
TIP: Until you get yourselffinancially organised, which means knowing what documents and data you’ve got; what dates matter; you can’t move forward – it’s a bit like planning a garden which hasn’t been touched for years – until you’ve got your garden clear and tidy, you can’t think about changing it.
The first stage in good planning, whether doing this for yourself, or for an older person you’re supporting, is putting some time aside – I liken it to training for a marathon; you don’t have to do it all in one sitting!
TIP: Just commit to doing a little bit each week, and before you know it, you’ll be tidy, and, most importantly:
- You won’t be leaving mess for anyone else;
- If you’re looking after someone’s affairs, you’ll know where everything is, and will be able to make timely interventions when needed.
Annabel: My father has a folder that sits in a drawer, along with the will, as he is quite organised. He has everything in there, but this also includes things like people they’ve got an account with or regular payments to different companies. Is that different?
Jason: It’s not just knowing what you’ve got and where it is; It’s about making it clear to someone else the things that they need to know. For example, I have the “Survival Guide” for my wife. I’ve actually gone one step further and have a locum in place who is a financial adviser friend of mine, and he would actually step in and deal with the bits I would have dealt with; and there is a manual for him, which says where everything is; what to do with this; how I did this; what my thoughts are on this; where I have shares etc.
The vast majority of people, like my father-in-law, never throw anything away, but don’t quite know what they need to keep. Let’s say there was a difficult situation, and he became seriously ill or passed away, how difficult is that going to be to organise and try and work out what he’s got, if either he can’t tell me, or he’s not here?
Getting organised means it’s one less drama when you’re needed.
And, if you’re a person who is getting older, it’s one less worry for you when you know that someone who cares about you knows where everything is.
How do we raise this topic with the person we are caring for?
Jason: Some people are very private, and some older generations may not want other people to know what they’ve got, but you can raise the issue and have a dialogue with family in a way that isn’t disrespectful, ‘dictatorial’ or prying. Some people still might not want to get organised, and that’s ok, but if you are that 40,50,60 year old person who’s thinking about, looking after or overseeing someone who’s older, then you owe it to yourself to at least ask them to get organised.
TIP: But, here’s the take-away from this– if you are responsible for someone else, you’ve got to get organised yourself. So, one way to raise this issue with someone is to say, “I’ve had a lovely clear out, I’ve tidied up all my paperwork, I know where all my financial assets are, I’ve got all my documents organised. I’m sure you’ve got it all organised?”, and this is a nice way to lead into it.
How do we go about getting organised? Do we get someone to help us?
Jason: If you don’t want to do it yourself, and if you’ve got the money to hire someone else to do it, thenI strongly recommend that, certainly for the initial tidy-up, you hire someone to do this. You can find people with credentials and recommendations online, who can come in, almost like a personal PA, and go through your paperwork, tidy things up and catalogue it all.
You could also find someone in the family, who is just out of university, or in-between jobs, and has good organisational skills, and ask them to help you to get organised, for not a lot of money – this could be £20-£30 for a couple of hours work.
There is always someone out there who is very organised, who will do this, and love it.
Do they have to have knowledge of finances?
Annabel: So, what’s brilliant is that you don’t need someone who is good at finances; they just need to have good organisational skills.
Jason: Exactly. Anything they’re not sure about, they should retain; It’s quite clear what’s rubbish and what isn’t, and anything they are unsure about, they can out in an ‘unsure’ pile.
TIP:They don’t even have to throw anything out, just catalogue it for you and put it in piles for someone else with more expertise to review.
TIP:If you do take financial advice, they are going to need to know what you’ve got; and the easier you can make it for them to know what you’ve got, the cheaper it’s going to be to take the advice.
They don’t want to be wading through years worth of papers. In fact, organising your papers could save you money, as firms will charge you for this. I once had to charge a client £6,000 to sort through a tea chest which represented 42 years of his financial life. He said this was the best money he had ever spent, as it was a weight off his mind; just giving it to us was one problem out of the way, and when we gave him back a small file, and everything else was catalogued, digitalised or scanned, he was really happy.
TIP: Now, you don’t need to spend £6,000, but spend a little bit of time to get someone in to help you, just £30-£100 could be the best money you ever spent.
What about digital solutions?
Jason: There are more and more digital vaults; some are provided by financial advice firms, as part of their package, but you can also use Google Docs, Google Drive and iCloud.
But, you don’t need to make this complicated. You can upload scans. I don’t keep any copies of dividend vouchers and anything like that:
- If it comes in as a PDF, I just save it to my designated folder, add it into the spreadsheet;
- If it comes in as paper, I scan it, shred it and upload it, unless it’s something I have to keep, like a will, or a lasting power of attorney, then I keep these in a heatproof and fire-proof box.
Annabel: See, you have a spreadsheet, so you’re already one step ahead of most of us!
Jason:Remember, you start with an A3 sheet of paper; you don’t have to use electronics.
TIP: Even if you do keep digital record, I would always recommend having an old-fashioned print-out to keep with your papers, together with your ‘what to do when I’m not here’ instructions.
Jason: Don’t say, “I should get my paperwork organised”, say, “I could get my paperwork organised”, and you’ll get it done.
SUMMARY OF TOP TIPS:
- Create a master list split into four sections, and organise your papers into piles: Bank Accounts; Investments; Legal;and anything else.
- Start small, and commit to doing a little bit each week.
- If you’re looking after someone, get yourself organised first; this will help you to raise the subject with them.
- If you can’t or don’t want to do this yourself, hire a Personal PA to help you, or ask a friend or family member with good organisational skills.
- You don’t even have to throw anything away; just create an ‘unsure’ pile for someone with more expertise to review.
- Organising your papers before you seek financial advice could save you a lot of money.Spend a little bit of time and money to get yourself to a better place with your paperwork, before consulting an expert.
- Even if you do keep digital records, keep a print-out master list with your papers, together with your ‘what to do when I’m not here’ instructions.
If you’ve enjoyed this episode, and it’s been useful, please do rate and review us, so that more people can find us. You can listen and subscribe to agespace money on iTunes, or wherever you get your podcasts, and find lots more information about some of the issues we’ve talked about, and all the things we do, at agespace.org.uk. There are more additions of the agespace money podcast about funding care; equity release; legal powers of attorney; and making wills.