Taking care of a loved one as a caregiver can be expensive. It is important to make sure all finances are sorted—for both you and your loved one. You’ll have less emotional energy to give your loved one if you’re financially stressed or worried about money on their behalf.
The first step is to take a look at your budget and the budget of your loved one. Planning budgets for both of you can help take some of this stress away. It can also help prepare you for the future and any financial surprises.
Start with your finances first. It helps to think in both the short term and the long term. As you get started, consider the following:
- Look for little ways to cut expenses and put away whatever you can into savings or your own retirement plan. Which expenses are fixed (rent, mortgage, car payment), and which vary from month to month? Of those that vary, which can you lower or eliminate?
- Try to keep balances on credit cards low.
- Consider your work situation. You may be working part-time or full-time. Perhaps you’re debating cutting down on hours to take care of your loved one. Before doing so, consider any changes to your benefits as well as the overall financial impact of making less money.
- Try not to cut into savings and emergency funds to take care of your loved one. Work to replenish these accounts for yourself.
- Maintain your 401k as best you can. If you cut into your account to pay for caregiving expenses, try to rebuild these funds.
Now, it’s time to do a budget for your loved one. As you look to create a full picture of their finances, consider the following:
- Keep track of all income sources, including social security and pension payments.
- Note down any taxes your loved one pays on property.
- Note your loved one’s recurring household expenses. These might include rent or mortgage, electricity, and car or transportation. With services like internet and cable TV, look to see if your loved one can change plans to save money.
- Note your loved one’s current medical expenses, plus any expenses they may incur in the future. This category might include health insurance, medical needs (like long-term care), and prescriptions.
- Aim to help your loved one put away money in savings. Even if the amount is small, having a fund to deal with emergencies can help your loved one handle unexpected situations.
There are programs to help seniors pay for some expenses. In the U.S., the National Council on Aging offers benefitscheckup.org, a service that matches benefits programs to senior citizens with limited income and resources. If you’re a Cleo member, your Cleo Guide to locate similar programs in your area.
Budgeting can help you take a good, hard look at spending and saving habits. Though it can take a bit of time, the effort you put into creating budgets for yourself and your loved one now will save you energy and headache in the long run.