Caregiving for a loved one introduces many changes into you and your family’s life. The addition of a dependent, whether it’s the first one or you have many others, puts a strain on all areas of your life. Your social life stalls, your career can feel impossible, time for yourself is minimized, if existent, and, perhaps more all consuming than anything else, caring for someone else can put a lot of stress on your finances.
Most of the time family members step in as a caregiver because the option to arrange live-in care is not available. Live-in caregivers are expensive, as outlined by A Place for Mom, and so quite often the natural step is to appoint yourself as the person responsible for your loved one’s every need.
If you are already overwhelmed by the added financial pressure of caring for someone else then you are in the right place. Even better if you are not yet in this position but see it becoming a not too distant reality. The sooner you make changes to your financial lifestyle, the better off you’ll be in the long term. However, the second best time is now, so if you feel a little behind, try not to get discouraged. It’s never too late to turn things around.
First off, let’s talk about exactly what a budget is and why it’s important. A budget is taking a look at your expected revenue for each month or the year. If you have a consistent job then you can write down the amount your paychecks are each month. If you freelance or have a variable income, then do the best, and lowest, predictions you can. If you make $1200-$3000 each month then plan for the lowest amount. It’s easy to figure out what to do with extra money, but it’s a lot harder to navigate around money that doesn’t exist.
Once you’ve determined your income, from there you should input and plan your expenses. There are a few different kinds of expenses to think about here:
- Fixed. This type of expense is the same each time, and is usually going to happen on a recurring basis. Fixed expenses might include your rent, internet bill, lease payments.
- Variable. Variable expenses can change with use, need or time. For example, you might know that you will need to buy gas for your car, but the exact amount might vary each month.
A good way to get started on a budget, especially if you’ve never tried making one before, is to write down as much as you can about your finances. Start with your known income and any fixed, recurring expenses. Then add in anything that might be variable, but are still expenses you know you are going to have each month. These types of expenses might include groceries, toiletries, and entertainment, such as takeout or a movie night. Use receipts, your bank statement, credit card and other bills to help you paint a picture of what your general expenses look like. Once you have collected as much of your spending habits as possible it’s time to get down to business. Try not to let judgement get in the way of this process. You might feel ashamed about some of the items you spend money on, but look at you taking this important step to better your habits and develop a healthier relationship with money! This step is just to help you better analyze your habits so that you can figure out how to save money for what is truly important.
Prioritize
Once you have laid out your expenses, it’s time to start prioritizing what you can and can not live without. Of course basic needs such as rent or a mortgage, utilities and your phone bill are essentials, as are groceries.
Now that you have also taken on the role of caregiver, some bills will likely increase, such as grocery and utility bills. There might also be healthcare costs associated with your loved one’s care that also have to be added into your budget plan. Of course, the hope is that your loved one is able to contribute in some way to their care, but in some situations that support might be minimal or non-existent.
It may take a little bit of time to discover all the extra expenses that come with the loved one you’re caring for, so keep track of everything you can. Some common expenses that come up when caring for older adults include:
- Health expenses. Your loved one might require meditation, mobility devices, renovations to the home, etc…
- Transportation costs. You’ll want to calculate the cost of gas, bus tickets or taxis that are needed to get your loved one to appointments. This will obviously be variable, but some appointments might happen at regular intervals so the associated costs can be reasonably predicted.
- Additional care. While you might be the primary caregiver, you might be in a situation where additional care, like a physical therapist, comes in to do exercises with your loved one. Or you might have someone come to assist with medication or bathing. These expenses should also be calculated into your budget.
Now that you have made a list of all the expenses you need, it’s time to tend to the more enjoyable items, and write down all of your wants. These are expenses that you technically could live without, but that you feel like you want to keep due to their positive impacts on your quality of life. This might look like a subscription to a streaming service, or grabbing a coffee every morning.
It’s helpful to see everything laid out before, because not only does it make you look at what you spend your money on, but it can also help you realize what’s truly important to you in life. For some people going out to dinner once a week is something very important, but you might prefer to skip dinner and instead enjoy a coffee and a donut a couple of times a week. Once you actually take the time to sit down and look at what you need and want and compare it against the money that is actually available to you, you might discover that some things don’t matter quite as much as you thought they did.
Trim Where You Can
Before you despair at the thought of never being able to afford to go out with your friends ever again, take a look at your expenses and see if there is anywhere that you can trim your expenses while still getting to enjoy the same type of life you were previously.
Call your cell phone provider and see if there’s any way to adjust your plan. Maybe you never use up your data or the amount of texts allocated to you. You might also look at changing over to a family plan or even switching to a different provider with a better offer.
If you have debt you might look into whether or not you can lower your interest rate, or can consolidate if you have several amounts owing.
Maybe ask other family members if they want to split a streaming service, or take turns hosting weekly dinners instead of going out to eat. And sometimes it’s the small things that really add out. Maybe you still go out to eat but only get a main, and skip the drink and appetizer.
People can sometimes be resistant to anything that changes their lifestyle, but managing your finances today can help you better grow your wealth so that you can be comfortable in the future.
Set Reasonable Goals
The best goals to set are the ones we are going to be able to achieve. Sure, you might want to put a thousand dollars into savings each month and only spend $100 on groceries, but that probably isn’t realistic for most people (and if it is, please tell us where you live and what grocery store you shop at!). Instead, once you’re looked through your expenses and categorized them into needs and wants, write down realistic parameters for how you are going to budget.
A popular method is what is known as the 50-30-20 budget, laid out in detail on Investopedia. This is a budget that suggests you separate your after tax income into 50% needs, 30% wants and 20% goes into savings. While this budget isn’t going to be the right fit for everyone, it gives you a good guideline of how you might want to manage your finances. If you’re spending 60% of your money on things you want, and aren’t putting any money into savings, then you could easily run into trouble down the road.
A reasonable goal is something that is not only realistic, but also something that can still allow you to live a comfortable life. Let’s go back to coffee. Maybe you absolutely love fancy coffees, but you realized that your budget simply doesn’t allow it, so you start making coffee at home. Well, just because getting daily fancy coffees is unaffordable, doesn’t mean that investing in a few fancy syrups or creamers is! Getting a hazelnut creamer and some chocolate sauce will yes, be a little bit more money at the grocery store, but will allow you to have enjoyable coffees for several weeks, or even months, at a much lower cost.
Or maybe you love going to the gym, but the monthly gym rate has gotten out of hand. Instead, maybe you can find a better deal at the community recreation center. They often have very affordable memberships that include a range of classes and access to a swimming pool! You might even find that you can build community at local events that are often advertised on the message boards there.
Don’t just get rid of everything you love and expect yourself to be able to stick with it, because that’s just not realistic. Instead, if something is really important to you, find a way to either cut down on other costs, or adjust the cost you love to make it a little bit more manageable for you. It’s hard to be a good caregiver if you’re not able to engage with the things you love, so make sure you’re budgeting with that in mind. NerdWallet has some other great tips on budgeting, with a focus on the 50-30-20 approach.
Seek Out Community Supports
Sometimes we don’t get help unless we ask for it, and fortunately, there are often a lot of people out there who are willing to give it. A great first step is reaching out to a seniors’ center to ask if there are any community resources that are available to you or your loved one. This might look like a shuttle service that can help cut down on transportation costs, or fitness classes for older adults that are offered for little or no cost.
You might also look into any discounts or coupons that are available to local stores to help with grocery costs, or even discounts to entertainment such as half priced tickets to movies on Tuesdays, or a local diner that has 5 dollar appies on weekdays. If there’s a place you frequently patronize it might even be worth just giving them a call to ask if they offer any support to caregivers and the older adults they care for. Worst case you’ll get a no and move on.
The saying “it takes a village” has a lot of value, so don’t feel like you have to go through this alone. By reaching out to your community you can better stay on top of your finances as a caregiver, and find others who are going through the same challenges that you are.
Finally, it’s important to also do your research on what government support might be available to your loved one. If they are dealing with any kind of cognitive impairment, or if they are struggling with an illness that developed suddenly, then they might not have had enough time to research what kind of assistance they qualify for, and you don’t want to be missing out on extra financial support just because you didn’t know about it! Senior Services of America lays out some benefits and savings that may be available to the older adult you care for, but they emphasize the importance of also checking within your specific state, as they may be additional benefits that are only available to residents of certain locations.
It can be a challenge to adjust to a brand new budget, so have patience for yourself. It can be helpful to keep track of your expenses with an app on your phone, or by collecting your receipts and going through them each week. Don’t be too disappointed if you make mistakes in the beginning, but don’t shy away from them. It’s easy for people who are struggling with their finances to try to ignore them. However, burying your head in the sand has never led to a positive outcome. Engage with your finances regularly, and soon you will find yourself calmer and in more control. Who knows, before long you might be back to buying those fancy hazelnut coffees in person.
