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How can I manage the financial aspects of caregiving?

By Amy Goyer

A checklist of 8 key steps

Whether you’re managing your loved ones’ money for them or contributing to the costs of their care (or both), dealing with finances is stressful for most people. Many have not planned adequately for the costs of care, and it can be difficult to make ends meet. As the level of care needed increases, the costs go up. Here are some key steps to take, as well as tips and resources, as you navigate the financial challenges of caregiving.

1. Get a handle on your loved ones’ wishes and finances.

  • Discuss their wishes for their care and living situation.
  • Summarize income, including Social Security, pension, and investment income. Make sure they are signed up for direct deposit.
  • List all living, professional, insurance, property, and other expenses. Set up autopay for their regular payments.
  • Understand savings and investments – can money for care be accessed if needed?
  • Value all assets, including properties, investments, stocks, bonds, IRAs, and bank accounts.
  • Calculate total debt – what is the best way to pay off debt and still have money for care?
  • Find out if there is any evidence of your loved ones experiencing scams or fraud.

2. Ensure that all legal documents are in place.

  • Power of attorney for finances.
  • Additional documents or special powers of attorney for specific banks, investment companies, Veterans Affairs (requires a fiduciary agent they appoint), Social Security (requires a representative payee), etc.
  • Estate planning – will, living trust.

3. Estimate the cost of care and create a budget.

  • Based on their wishes for now and in the future, get an idea of the average costs of various levels of care. Learn more about the various types of living situations and levels of care in our article, How can I find the best housing and care for my loved ones?
  • Learn about the costs associated with hiring paid caregivers (either through an agency or directly) and don’t forget to include taxes in your estimate.  Remember that Medicare does not pay for ongoing caregivers or home health aides; Medicaid may do so in some states if your loved ones qualify.
  • Use a long-term care cost calculator to get average costs and refine your estimates by contacting nearby independent living communities, group homes, assisted living facilities, and skilled nursing facilities to ask about costs.
  • Create a budget that includes their income and all regular and intermittent, fixed, and variable expenses, as well as the cost of care. Is there enough to cover the cost of their care, adhering to their wishes for where they want to live and the care they need to receive?

4. Find out about free or reduced-cost services.

  • Contact the area agency on aging to ask about eligibility requirements and any services that are free or offered on a sliding fee scale.
  • Recruit volunteers to help where appropriate – including friends, neighbors, and volunteer organizations.
  • If you are caring for a veteran, contact the VA Caregiver Support Program and ask about eligibility for services, such as home health aides, medication, medical equipment, home modifications, and more. Also explore cash benefits, such as Veterans Aid and Attendance.
  • Use a medication coupon program or an app like GoodRx, WellRx, or RxSaver to find the best prices, and find out if drug manufacturers have programs to help with drugs not fully covered by insurance.
  • Find out if your loved ones have health conditions that qualify them for assistance through one of the HealthWell Foundation’s disease funds.

5. Maximize their income and resources.

  • Find out if they have a long-term care insurance policy that can be activated.
  • Apply for any benefits they may be eligible for, including food, utilities health, and veterans’ benefits. Get them screened for Medicaid eligibility, as well as for Medicare Part D Extra Help (for prescriptions).
  • Talk with a financial advisor to determine if a reverse mortgage, home equity loan, or home equity line of credit are viable options.
  • Consider a house-sharing arrangement to bring in rent money.

6. Learn how to manage someone else’s money.

  • Act only in your loved ones’ best interests.
  • Carry out the basics: make deposits, ensure bill pay, make savings and investment decisions, handle insurance and benefits claims, manage tax preparation, and prevent fraud and scams.
  • In addition to the steps listed above, keep good records and be sure to communicate clearly and regularly with your loved ones and other pertinent family members about your loved ones’ financial status.
  • Keep your loved ones’ money, property, and assets separate from yours.
  • Consider a bill management service from an accountant, a geriatric care manager, an aging life care expert, or an organization like Silver Bills, Everyday Money Management, Plumb Bill Pay, or Care is There. Make sure the service includes account managers who communicate regularly and keep an eye out for fraud and mistakes. Examine their security measures and customer reviews.

7. Get help.

  • Contact your loved ones’ financial planner, accountant, financial counselor, or other financial advisor and work with them to understand the entire financial picture and plan for the future.
  • Take a money management or financial education class to hone your financial skills. Try contacting a local university or the cooperative extension office to ask about free courses.

8. Protect your own financial security.

  • As a caregiver, your finances are vulnerable too. Consult with a financial advisor and make a conscious effort to protect your own financial security now and in the future.
  • Find out if you can be paid to care for your loved ones – from their own private funds, long-term care insurance, Medicaid, or Veterans Affairs.

Resources

Amy Goyer is a nationally known caregiving expert and author of Juggling Life, Work, and Caregiving. A passionate champion for caregivers, she has also been one her entire adult life, caring for her grandparents, parents, sister, and others. Connect with Amy on Facebook, Twitter, and LinkedIn.