According to an AARP study, three-quarters of family caregivers’ respondents reported spending an average of $7,242 annually on caregiving-related out-of-pocket expenses. The nation’s 48 million unpaid family caregivers not only commit their time and effort to the well-being of their loved ones, but most of them spend their own money on caregiving expenses
Helping with a loved one’s living costs, such as rent, mortgage, assisted living, home modifications, etc.-accounted for more than half of all costs incurred by the caregivers surveyed. Healthcare expenses also add up quickly. One-fifth of the caregivers’ expense, more than $1,200 per year, was for direct payments to health care providers, hospitals, therapists, medical equipment and devices, home care, and adult daycare.
Learn some tips, based on a comprehensive ARRP planning guide, on ways to improve the management of your finances while caring for someone else:
- Get your own financial house in order when it comes to managing your loved one’s care at home.
• Inventory all the costs of your loved one’s life at home, including mortgage/rent, utilities, and transportation.
• Add up any expenses you routinely cover, from groceries to help with property taxes, homeowners and car insurance, or gas.
• Make sure you and your loved one have a safe to store important documents, such as wills, marriage certificates and life insurance policies.
- Make a management plan for your money and your loved one’s money.
• Budgets should be active documents that you use to track overall cash flow and spot any gaps that could make you dip into savings or go into debt.
• Financial planning as a caregiver means making three budgets:
1) your overall income and expenses;
2) your caregiving income and expenses; 3) your loved one’s income and expenses.
• As you create these budgets, be sure to list every expense, not just major bills; calculate all income from all sources; and document exact expenses where possible
- Talk with your loved one and make a plan for all the aspects of their health, including illness, end-of-life care and death.
• No one can store every detail of a loved one’s health care in their heads. Write down health insurance numbers, co-pays, prescriptions and accommodations needed to access care. Then make a copy and put this information in a safe place.
• Create a “team roster” for routine, emergency and backup care. Include contact information for health, hospital, pharmacy, vision and dental care — and then add others who can help, such as family members, faith leaders and neighbors.
Sources:
AARP
https://www.aarp.org/content/dam/aarp/caregiving/pdf/2021/financial-tips.pdf
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