If you’re one of the estimated 34 million Americans who provide care for an older family member or friend, you probably know that caregiving can involve an investment of money as well as love. This investment was confirmed by a recent survey of 1,000 family caregivers conducted by the nonprofit National Alliance for Caregiving and Evercare, a national health-care coordinator.
In the course of compiling Family Caregivers—What They Spend, What They Sacrifice, researchers documented how much caregivers spend:
- Out-of-pocket expenses for average caregivers exceed $5,000 annually, or an estimated 10 percent of their average income.
- Long-distance caregivers have much higher annual expenses than those caregivers who live with or nearby their loved one.
- The most costly expenditures for caregivers are medical care co-pays and pharmaceuticals; household goods, food, and meals; and travel and transportation costs.
Striking the Right Balance
Most caregivers make these expenditures gladly, doing what they can - and more - to make their loved ones’ lives easier and more comfortable. At the same time, it doesn’t make sense if your own financial needs get stuck in second place. It’s not selfish to save for retirement, pay off credit cards, or schedule routine health care. It is simply prudent.
Nonetheless, many caregivers undermine their own financial security. Researchers found that 38 percent of the caregivers in the survey had reduced or stopped saving for their own future, while 23 percent had cut back on medical and dental care. Seventeen percent had taken out loans or increased their level of credit card debt. Many had quit their jobs, reducing Social Security payments and their retirement income.
Researchers also found that these caregivers jeopardized their own health. The larger their out-of-pocket expenses for caregiving, the more likely caregivers were to report trouble sleeping, depression or other signs of poor health. In other words, the more money caregivers spent, the more difficulty they had gaining the emotional and physical resources they needed to be good caregivers.
Budgets Provide Discipline
As a caregiver, your best course of action is to seek the financial middle ground, finding a way to care for yourself as well as your loved one. This is not always easy, but developing a household budget is an important first step.
A budget will help you use your existing income more efficiently. It will also help you become more conscious of those small financial decisions that can lead to a deficit over time. And, if you find that careful budgeting doesn’t relieve the financial pressure, you will have the facts and figures you need to make the case to siblings and friends for their support as well as to pursue government programs that may provide some assistance.
The bottom line: in times like these, your ability to care for your loved one depends on your ability to take a balanced, disciplined approach to your own financial management.
Ask your local Sunrise Senior Living community for information on Flexible Financial Options that may assist your family, such as the potential tax benefits of senior care. Our calculator also allows you to compare potential savings seniors and their families can see when moving in to a senior living community.