Here’s a step-by-step guide to help you get started and create an organized process moving forward.

1. Understand the Scope of Your Responsibility

The first step is to clarify what financial responsibilities you’re taking on. Are you managing day-to-day expenses, overseeing investments or paying bills? Once you have the full picture of what needs to be done, you can begin to prioritize tasks and ensure nothing falls through the cracks.

If your loved one is still able to communicate and participate in decisions, work together to understand their wishes. Make sure they have set up advance directives so that full financial authority can be transferred in the event they lose mental capacity.

If your loved one is not able to communicate with you about finances, as will likely be the case if they are in the later stages of dementia, ensure you have legal authority to manage their finances through a power of attorney or similar document. Without this, it may be difficult to access accounts and make decisions on their behalf.

2. Gather Financial Information

Once you understand the scope of your responsibilities, the next step is to gather all relevant financial information. Start by making a list of everything you need, such as:

• Bank accounts and account numbers
• Investment accounts
• Social Security information
• Pension details
• Debts and loans
• Monthly bills (utilities, insurance, mortgage etc.)
• Credit card statements
• Tax returns and documents
• Insurance policies (health, life, home, auto)

Create a checklist to ensure you’ve covered all the key areas, and note which payments are made digitally. For these, keep a record of any passwords or login information for online banking and bill payment systems.

3. Establish a Financial Plan

Once you’ve gathered the necessary information, you can begin to create a financial plan for your loved one. Here are some key elements to consider:

• Income and Expenses: Review all sources of income, such as Social Security, pensions or investments. Then, make a list of recurring monthly expenses, such as utility bills and monthly medication fees. This will give you a snapshot of their financial health and help you determine if adjustments need to be made to their budget.
• Debts: Make a list of all outstanding debts, and keep track of payment due dates. Setting up recurring payments online can help you avoid paying late and incurring fees.
• Savings and Investments: Review any savings or investment accounts to ensure they’re being managed properly. Your loved one may already have a financial advisor to help you better understand their portfolio. If not, you may want to consider hiring one yourself.
• Budgeting: If your loved one is on a fixed income, creating a budget is crucial. You’ll want to ensure that this budget covers their current expenses, with room for medical costs, unexpected expenses and emergencies.

4. Get Legal and Financial Help if Needed

Managing finances can be complex, especially if your loved one has significant assets, investments or debts. You don’t have to navigate this process alone. Consider seeking the help of professional attorneys, financial advisors or tax professionals to support your efforts.

5. Stay Organized

If you’re going to be helping your loved one in the long-term, staying organized is essential to keeping on track. Set up a system that works for you, whether it’s digital or paper-based, and make sure you’re tracking your loved one’s finances separately from your own, so that important documents aren’t being mixed together and complicating your records.

 Here are a few tips for staying on top of things:

• Keep records of all financial transactions, including receipts, account statements and important emails. Consult this guide from Bank of America for how long certain financial documents should be kept before shredding.
• Schedule regular reviews of finances, so you can adjust the budget or financial plan as needed.
• Request your loved one’s credit report to make sure of accuracy. If you are acting as Power of Attorney, submit proof that you have financial authority to obtain this information.
• Set reminders of important payment or review dates to make sure you don’t incur fees.

Having a clear system in place will make it easier to manage your loved one’s finances and prevent confusion or missed payments down the road.

6. Communicate with Family

It’s important to keep family members in the loop, especially if you’re managing finances on behalf of a parent or spouse. Be transparent about your process and the location of certain records in case someone needs to take over for you in the event of an emergency.