She is basically running out of money to pay her rent where she lives alone in the downstairs of a house. She WILL NOT live with anyone...and I don't think any of us would have the patience to deal with her not wanting to live with us.. She has always been very independent with more energy than any of us! She will not go to a nursing home or assisted living. Pretty stubborn. Where do we go from here?? Are there any other options?

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Most importantly, does SHE realize she's running out of money?
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Perhaps you could help her find subsidized housing? When you have the talk with her that Margaret suggested, see if you can determine the difference between what she has coming in and what she needs to make it each month. That might make the problem more manageable. Is she on medicaid? That might help her with her expenses. The area on aging might be able to give some advice to you. Give them a call and see what questions they ask. You can pass this information to MIL and see if it is something she wants to follow up on. So good that she is doing so well. She sounds like a wonderful person.
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How wonderful that she is basically in good health! It sounds as if she is cognitively intact and able to make decisions, so I ask (gently) why is this your problem? Does she handle her own money, pay her own bills, do her own banking?
I understand that you must have a reason for your worry, but if she is responsible for paying her bills, are you able to sit with her and discuss your concerns? Can you have a pen and paper handy and sketch out a budget? Sometimes seeing it in black and white can help make it real.
Also, is she receiving all the SS and other possible income available for her? Maybe food stamps would help stretch the budget.
I have found that approaching the person with the intention of changing her mind is often difficult, but if you approach her with the "let's see how we can make your future the way you want it" attitude she may be more open to talking.
Best of luck,
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