What to Expect with Caregiving and Finances

Last Updated: January 2021
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Finances are tricky. We get it. Caregiving and finances is an even more complicated topic. After all, you have your own financial situation, the finances of your family member and the way that those two areas interact.

You’re not the only one with a stake in what happens either. Other family members may have strong opinions about what you should be doing and where money should be going.

Then there’s the senior themselves.

To begin talking about caregiving and finances, let’s break the topic down into two areas – your finances and those of your family member.

Your Finances

First things first, caregiving tends to be expensive. Even if your loved one is paying their own way, there are often extra bills and unexpected costs, including:

• The need for home alterations (your home or theirs) to make the environment safer, like grab bars, ramps, or increased space for a wheelchair.
• Adaptive aids to help with independence, such as long handled tools to extend range of movement, clothing that is easy to get into and out of, walkers, walking sticks, toilet seat raisers, and much more.
• Copays for health needs and medication.
• Transportation. You may need more gas for your car if you are driving your family member around, or may need to pay for alternative transportation, like Uber.
• If your family member lives on their own, you might be regularly driving to them and perhaps bringing things that they need. While the costs here might seem low, they can add up.

Caregivers often find that their ability to earn money decreases too. Some find that they are much more stressed and have less free time, which might make overtime difficult or impossible.

You might even need to cut down your hours at work, pass on a promotion, or give up working entirely (depending on your situation). Indeed, caregivers often find that their careers suffer.

This isn’t too surprising, as employers often aren’t that flexible. Many won’t realize all of the challenges that caregivers face either.

What You Can Do

The first step is simple.

You need to sit down and have a serious look at your own finances. Be realistic. Think about your current expenses and how these may change in the future.

What happens if…

• Your loved one’s health gets worse?
• They can no longer drive?
• They need to move in with you?
• Your income decreases or you lose your job?

Once you’ve looked into your current finances and any potential changes, it’s time to start planning. A financial planner could be helpful here, as they may know some ins and outs of the field that you don’t.

You can also look for ways to improve your income and decrease costs.

Improving your income might involve picking up extra work, finding a side hustle, or even getting paid as a caregiver.

Decreasing costs involves techniques that you’re probably already familiar with, like budgeting, creating a spending plan and sticking to it, saving money, and looking for discounts.

The Finances of Your Family Member

Many financial challenges remain similar regardless of a person’s age. However, there are also some senior-specific areas that need to be talked about too.

For one thing, many seniors are on a fixed income. This is often lower than the income they had during their life, which can be difficult to adjust to. Because of this, seniors can easily end up living outside of their means.

Health challenges often increase with age too. This can increase costs, even if insurance does pay for many of the seniors medical expenses.

Additionally, cognitive ability can sometimes change with aging, especially for seniors with conditions like dementia. This can limit their ability to make wise financial decisions. 

What The Senior Can Do

Senior financial advice is similar to advice for other age groups. There are various approaches and programs that can help seniors with managing money, including:

• Cutting down expenses
• Avoiding scams

In some cases, seniors may even be able to find part-time employment, especially if they are still mentally and physically fit. 

Having a budget and being aware of good financial practices can be hugely helpful for improving a senior’s financial situation.

What You Can Do

It’s natural to worry about your aging parent’s finances. Perhaps they’re spending too much money or not meeting all of their needs.

Talking to your family member about finances comes with challenges, but it’s an important process for making sure your family member is doing well.

The process helps you to get a clear picture of the senior’s financial situation and the implications for the future. Even if they’re confident about their finances, there may be some factors that they’ve overlooked. 

When you do so, remember to be gentle and respectful. No one wants to be told how to spend their money. If you come on too strong, your family member may be resistant.

Consider talking to a financial advisor too. They may be able to help you figure out solutions. Talk to people in the senior care industry as well. They’ll be able to highlight the options that are available, along with their implications.  

Caregiving and Finances

There’s one more area to talk about with caregiving and finances – the way your finances intersect with the finances of your loved one. This is particularly true if your family member lives with you.

This is another reason why talking about finances is so important. You need to be sure that everyone is on the same page.

You may need to get some things down in writing too or perhaps even talk to a lawyer. This is particularly true if you are helping your family member to manage their finances. Having things written down reduces the risk of confusion and suspicion down the road.

There’s one other thing to mention too.

While you can give your family member advice, guidance, and suggestions about their money, they’re still an adult in their own right.

You don’t get to choose how they spend their money – even if they’re making poor decisions. After all, many of us make poor decisions with money from time-to-time (or even often). We might not save enough or focus on wants before needs.

Seniors haven’t lost the right to make those mistakes for themselves.

So, even though you care and worry about your family member, it’s important to learn when to be involved and when it’s time to step back.